Terming the food bill as credit negative for thr UPA government, the agency gave Baa3 rating on India, which is a notch above the junk grade status.
The bill, a pet project of the chairperson of the ruling coalition, Sonia Gandhi, seeks to provide subsidised foodgrain to 75 per cent of the rural population and 50 per cent of the urban population. While the ruling party has lauded it as a welfare measure, economic experts have stressed that it would adversely impact the government's finances in particular and the economy in general.
Experts have been particularly critical of the bill, saying it has been pushed at a time when the economy is slowing down and the currency is tumbling fast. The measure is credit negative for it will raise the spending on fodd subsidies to about 1.2 pr cent of the GDP per year from an estimated 0.8 pr cent currently, said Moody's.