Those who had doubts must introspect: Jaitley on Moody's upgrade for India

Jon Howard
November 18, 2017

Moody's said that the recent announcements of a comprehensive recapitalisation of Public Sector Banks (PSBs) and signs of proactive steps towards a resolution of high NPLs through use of the Bankruptcy and Insolvency Act 2016 are beginning to address a key weakness in India's sovereign credit profile. Standard and Poor's, which still assigns the lowest investment grade to India with a stable outlook, said India needed to address its weak fiscal position, indicating upgrades would take time.

The rupee surged as much as 1.1 per cent on Friday after worldwide rating agency Moody's Investors Service upgraded India's local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook to "stable" from "positive".

Moody's Investors Service 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 statement said.

Hitting out at opposition for criticising government's economic policies, Jaitley said that those who had doubts about India's reform process should seriously introspect on their position.

Meanwhile the Sensex closed 236 points higher after the Moody's upgrade, while the NSE index rose almost 70 points.

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Stating that reforms will foster sustainable growth prospects, the US-based agency said the government is mid-way through a wide-ranging programme of economic and institutional reforms.

Noting that India is poised to climb to the 7.5 growth path, Shah stated that the Modi government has carried out economic reforms on all levels.

The Narendra Modi government has just received a pat on the back from a heavyweight-credit rating agency Moody'.

The Congress was quick to dismiss India's improved rating. It also claimed that India's growth potential superseded that of many other sovereign nations.

The outlook on new rating is stable - this means that factors that can lead to a downgrade of India's rating and the ones that can upgrade its score are evenly balanced.

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