Senior Bharatiya Janata Party leader Yashwant Sinha on Friday took a dig at the Narendra Modi government said that there should be a midnight ceremony in Parliament to celebrate Moody's upgrade of India's rating. "Due to ratings upgrade will help in reducing our costs of crude oil imports on the other", Mukesh Kumar Surana, chairman and managing director Hindustan Petroleum Corporation Limited told The Hindu.
This period has, moreover, seen the country grow from a barely $ 620 billion to a $ 2.3 trillion economy, with its official foreign exchange reserves, too, soaring from some $ 110 billion to nearly $ 400 billion. The rating upgrade comes after a gap of 13 years - Moody's had last upgraded India's rating to "Baa3" in 2004.More news: Apple delays the HomePod speaker until 2018
It will now be watched whether other major rating agencies such as Standards & Poor's (S&P) and Fitch Ratings will follow suit and raise their sovereign rating for India. Baa2 rating means investment grade with moderate credit risk, and is two notches above the junk grade.
In what can be taken as an endorsement of Prime Minister Narendra Modi's ongoing structural reforms and something that can boost investment sentiment, global rating agency Moody's Investor Services, on Friday, lifted India's sovereign rating by a notch to Baa2 from Baa3 after 13 years. The resolution of bank non-performing assets would be of supreme significance to revive the investment cycle and economic growth, stated ANZ. Yashwant Sinha, BJP member and former finance minister of India said "It is ironic that just a day before the ratings upgrade, finance minister Arun Jaitley had hinted at a change in the fiscal glide path".
The rating agency simultaneously upgraded India's local and foreign currency issuer rating to Baa2 from Baa3.More news: Tesla unveils 'the quickest vehicle in the world'
In a statement, it further said: "While India's high debt burden remains a constraint on the country's credit profile, Moody's believes that the reforms put in place have reduced the risk of a sharp increase in debt, even in potential downside scenarios".
Rana Kapoor, MD and CEO Yes Bank, said the long overdue sovereign rating upgrade for India is an endorsement of institutional and structural transformations ushered in by the government in the last few years while maintaining fiscal prudence. "However, as disruption fades, assisted by recent government measures to support SMEs and exporters with GST compliance, real GDP growth will rise to 7.5% in FY2018 with similarly robust levels of growth from FY2019 onward", it said.
Measures such as demonetisation, the Aadhaar system of biometric accounts, and targeted delivery of benefits through the direct benefit transfer (DBT) would reduce informality in the economy, it said.More news: Al Franken accuser: 'I've been angry about it ... for over 10 years'