NITI Aayog has welcomed Moody’s upgrade of India’s credit rating with is Vice Chairman Rajiv Kumar calling it a reflection of the country’s growth story. The economist also expressed hope that other global agencies such as S&P and Fitch would follow suit.
The US-based agency’s move is based on India’s stable outlook and improved growth prospects driven by Modi government’s economic and institutional reforms.
“Moody’s upgrading India’s Ratings is a reflection of India growth story and sound economic principles for a #NewIndia. Hoping others will follow,” Kumar said in a tweet.
The rating upgrade comes within weeks of the World Bank handing a 30-place jump to India on its ease of doing business ranking to place it at 100th rank.
Chief Economic Advisor Arvind Subramanian too said the rating upgrade was “long overdue” and is a recognition of reforms like GST, bank recapitalisation plan, bankruptcy code and macro-stability.
“The government is going to do what it has to do on the domestic front — employment growth, economic growth, reviving investment,” he said.
Former Economic Affairs Secretary Shaktikanta Das said in a tweet: “Moody’s upgrade India’s credit rating after 13 years. A clear recognition of economic & institutional reforms; well paced shift towards formalisation of the economy; improvement in business climate; positive growth outlook.”
In 2015, the rating outlook was changed to ‘positive’ from ‘stable’. The ‘Baa3′ rating was the lowest investment grade – just a notch above ‘junk’ status.
In a statement this morning, the credit ratings agency said: “The decision to upgrade the ratings is underpinned by Moody’s expectation that continued progress on economic and institutional reforms will, over time, enhance India’s high growth potential and its large and stable financing base for government debt, and will likely contribute to a gradual decline in the general government debt burden over the medium term.”
It cautioned however that high debt burden remains a constraint on the country’s credit profile.
(With inputs from PTI)