NEW DELHI: Prime Minister Narendra Modi must keep his party’s motor mouths in check or risk losing credibility domestically and globally, Moody’s Analytics has warned in a rare and blunt intervention by an international commentator on a hot-button political topic.The research and analysis arm of Moody’s Corporation, said crucial reforms have run into obstructionist opposition, but noted that the government too hadn’t helped itself. It added that the outcome of the ongoing Bihar elections could prove pivotal for the prime minister and the government. “The government also hasn't helped itself, with controversial comments from various BJP members.While Modi has largely distanced himself from the nationalist gibes, the belligerent provocation of various Indian minorities has raised ethnic tensions,” said Faraz Syed, associate economist at Moody’s Analytics in the report that was released on Friday.“Modi must keep his members in check or risk losing domestic and global credibility,” the report said, adding there are indications already that investors have been less optimistic about India's economic prospects.The report said it saw India’s potential growth rate at 9%-10%, but questioned if the country can deliver on the promised reforms to achieve this potential. The BJP does not have a majority in the upper house and has been forced by a belligerent opposition to water down or drop crucial reform legislations in recent months. The report, which comes at a time elections in Bihar are underway, noted that the outcome of these polls would have an impact on the country’s economic trajectory. “The BJP is not the incumbent (in Bihar), so a win here would help secure an upper house majority... Overall, it is unclear whether India can deliver the promised reforms and hit its growth potential. Undoubtedly, numerous political outcomes will dictate the extent of success,” it said.The BJP faces a tough battle in Bihar and a loss in the crucial battleground state will deal a setback to its plans to secure a majority in the upper house and also embolden the opposition to challenge its authority at the national level. Already, the government is under attack from opposition parties and assorted intellectuals such as authors, scientists and film makers for fostering a climate of intolerance in the country. Many distinguished people returning their awards and recognition citing growing environment of intolerance in the country. Moody’s listed land acquisition bill, a national goods and service tax, and revamped labour laws as key reforms that need to be undertaken.“They are unlikely to pass through Parliament in 2015, but there is an even chance of success in 2016,” the report said. It said while low rates could buttress the economy in the short run, reforms were needed to reach long-term potential growth. It projected India's GDP growth for the September quarter at 7.3% and forecast it rising to 7.6% for the full fiscal year.Noting that euphoria behind the new government had propelled the stock market initially, the report said consistent failure to deliver key economic reforms has faded the optimism. Net financial flows in to equity markets were around $16 billion in 2014, but they are unlikely to reach those highs this year, it said. The same can be said about financial flows into India's debt market, it added. The ratings agency has a positive outlook on India’s Baa3 rating.The Moody’s report said capacity utilisation has been low across industries this year and the capital expenditure pipeline too was running dry. However, interest rate cuts should encourage investment, as will the softer inflation profile. It forecast the RBI keeping rates on hold for the remainder of 2015, with a small chance of another cut early next year.On the impending US rate hike, the report said the rupee would likely come out relatively unscathed thanks to the RBI's bulging foreign exchange reserves stockpile.” But the slowdown in global growth will prove a major headwind for Indian exporters, the report said, adding that the fall in exports from 2015 is expected to continue in 2016.“The newfound stability in India's current account balance could come under renewed stress if global growth slows more. So far, lower oil prices have buttressed the trade balance. But a rebound in prices if oil supply rebalances could see the trade balance deteriorate,” it cautioned.