AMN
International rating agency Moody’s Investors Service has upgraded India’s local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive.
Moody’s has revised the sovereign rating of India a notch above investment grade after a long gap of 14 years.
Interestingly, the last time the global rating has revised the rating was when the BJP government led by Atal Bihari Vajpayee was in power.
PMO has said, Moody’s believes that the Government’s reforms will improve business climate, enhance productivity, stimulate foreign and domestic investment, and ultimately foster strong and sustainable growth.
PMO said, Moody’s upgrades India’s sovereign rating for the first time since 2004.
Finance Secretary Dr Hasmukh Adhia also welcomed the upgrade of India’s sovereign rating by Global rating company, Moody’s Investors Service, and said the path of fiscal reforms chosen was well recognised.
Moody’s had last upgraded India’s rating to ‘Baa3’ in 2004. 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. Moody’s said in a statement, the decision to upgrade the ratings is underpinned by Moody’s expectation that continued progress on economic and institutional reforms will enhance India’s high growth potential.
It will also improve 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.
The global ratings agency, however, cautioned that high debt burden remains a constraint on the country’s credit profile.