Moody Analytics says India is developing, but beneath it potential as politics weighs heavily on the economy and it called the national government as the “single major drag” in business activity.

The outlook of India is still below accomplishing and the rundown management has pulled the growth of economy to below potential, as said by Glenn Levine, the senior economist of Moody’s Analytics.

He said the Indian Government is the single major factor weighing on the attitude. It is not possible in all economies, to detach the economic from the political viewpoint and that is mainly the case in a country like India.

The report further cited that the there is a wide based flaw in the financial system, as all segments are in danger.

The report says that softer worldwide situation, weak depositor and business assurance, rigid monetary circumstances, government paralyses are all weighing on demand. All the segments have slowed down with particular limitation in mining & manufacturing, together with a perturbing reduction in private assets.

The growth of GDP has slowed down 6.1% annually in 2011’s first quarter. It is the slowest speed ever since 2008 and it is increasing around six percent during 2012’s the first half. Nevertheless a stable activity upturn is probable to raise the GDP growth’s second half to 6.5%.

This place the growth in 2012 considerably beneath India’s potential of about 7.5%.