The Narendra Modi government has to deliver the promised reforms for the country to reach its growth potential, Moody's Analytics said.

Moody's Analytics on Friday cautioned Prime Minister Narendra Modi that the country may lose domestic and global credibility if he doesn't rein in the members of the ruling BJP.The research firm, whose parent runs global rating agency Moody's, said controversial comments from various party members amid the raging beef controversy is not helping the government."While PM Modi has largely distanced himself from the nationalist gibes, the belligerent provocation of various Indian minorities has raised ethnic tensions," said Moody's Analytics.The ruling BJP does not have a majority in the Rajya Sabha, where crucial reforms bills have been met with an obstructionist opposition, it noted."Along with a possible increase in violence, the government will face stiffer opposition in the upper house as debate turns away from economic policy. PM Modi must keep his members in check or risk losing domestic and global credibility," it said in a report titled 'India Outlook: Searching for Potential'.According to Moody's Analytics, the government has to deliver the promised reforms for the country to reach its growth potential.It projected that India's GDP growth for September quarter at 7.3 per cent, while for the full fiscal it would be 7.6 per cent."Key economic reforms could deliver greater potential GDP, as they would improve India's productive capacity. These include the land acquisition bill, a national goods and service tax, and revamped labour laws. They are unlikely to pass through Parliament in 2015, but there is an even chance of success in 2016," Moody's said.As regards interest rates, it said low rates will buttress the economy in the short-term but reforms are needed to reach long-term potential growth.The Reserve Bank has cut the benchmark repo rate by 1.25 per cent this year.Moody's said positive signs are emerging with the State Bank of India, the nation's largest bank, cutting its base lending rate earlier this month."Capacity utilisation has been low across industries this year. The capital expenditure pipeline is running dry. However, interest rate cuts should encourage investment, as will the softer inflation profile," it added.