New Delhi, Aug 18 (IANS): Moody's Investors Service on Friday maintained its stable outlook on India, while affirming its Baa3 rating. 

Though at the same time, it has taken a cautious stand on political issues, citing Manipur's example. It said that curtailment of civil society and political dissent, compounded by rising sectarian tensions, support a weaker assessment of political risk and the quality of institutions.

It went on to add that though elevated political polarisation is unlikely to lead to a material destabilisation of government, the rising domestic political tensions suggest an ongoing risk of populist policies -- including at the regional and local government levels -- amid the prevalence of social risks such as poverty and income inequality.

At the same time, the periodic flaring of border tensions with neighbouring countries was an outlier among sovereigns assessed as having a lower overall susceptibility to political risk, Moody's said.

Manipur has been engulfed in ethnic violence since the past three months, which has resulted in death of more than 150 people and displacement of more than 50,000 people.