India's credit rating upgrade by Moody's is a reflection of the country's growth story, Niti Aayog Vice Chairman Rajiv Kumar said on Friday, and expressed hope that other global agencies such as S&P and Fitch would follow suit.
"Moody's has upgraded the government of India's local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive", the global rating agency said in a release on Friday, adding that the government's wide-ranging economic and institutional reforms will improve the business climate and foster strong and sustainable growth.
"Continued progress on economic and institutional reforms will, over time, enhance India's high growth potential", the agency said. In 2015, the rating outlook was changed to positive from stable.
Prior to this rating action, HDFC Bank's BCA and ratings were constrained by India's previous sovereign rating of Baa3 given the bank's significant exposure to the government in common with other Indian banks.
Moody's upgrade a recognition of Modi govt's reforms: FM Arun Jaitley
The credit rating reflects the economic and political stability of a country.
Moody's upgraded the nation's sovereign ratings from its lowest investment grade to a notch higher citing the recent series of government reforms which includes the Goods and Services Tax, the Aadhaar system of biometric accounts and measures taken to resolve bad loans plaguing the banking system.
Talking about policy decisions like demonetisation and GST implementation, he said that a series of steps taken by the government are taking Indian economy to a greater formalisation and digitization which is being universally acknowledged.
According to Moody's, real GDP growth will moderate to 6.7 percent in the fiscal year ending in March 2018 and will rise to 7.5 percent in the next financial year with similarly robust levels of growth from 2019 onward.
Jaitley reiterated the government's commitment to structural reforms and said fiscal prudence will be maintained.More news: Resigned Lebanese Prime Minister Hariri Accepts Invitation to Come to France
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