Finance Minister Arun Jaitley today welcomed the rating upgrade by Moody's Investor Service, but said it was a belated recognition of India's reforms agenda. Addressing mediapersons in the national capital on Friday, Jaitley termed the rating upgrade by Moody's, the first in over 13 years, as an endorsement of the structural reforms that have gone on in India in the last few years and said that the development strengthens the government's resolve to continuing in the path that it has taken.
"We welcome this upgrade, we believe that it is a belated recognition of all the positive steps which have been taken in India in the last few years, which has contributed to strengthening of Indian economy," the Finance Minister said today.
The FM said that Moody's upgrade of India's rating was a recognition of the reform process which has gone on in India, particularly in the last 3-4 years, "where a number of structural reforms have taken place which has placed India on a path of high trajectory growth".
"It is encouraging that there is an international recognition and this recognition firms our determination to follow the track that we have embarked upon. The fact that a series of steps including demonetisation, which are now taking Indian economy to a greater formalisation and digitisation, something which is being universally acknowledged."
Moody's Investor Service today said that it had 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.
Moody's has also upgraded India's local currency senior unsecured rating to Baa2 from Baa3 and its short-term local currency rating to P-2 from P-3.
The global rating agency said in its report that its decision to upgrade the ratings is underpinned by its 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.
"While a number of important reforms remain at the design phase, Moody's believes that those implemented to date will advance the government's objective of improving the business climate, enhancing productivity, stimulating foreign and domestic investment, and ultimately fostering strong and sustainable growth," the report said.
Taking cue from the report, the Finance Minister said that the development should force the critics of the government's reforms agenda to introspect. "Many who had doubts in their minds about India's reform process would now seriously introspect on their positions itself," Jaitley said.
Jaitley further said that the government's track record of three years shows that it has been one of the better records in Indian history as far as fiscal discipline is concerned.
"We intend to move on that track," the Finance Minister added.
The global rating agency cited recent reform measures undertaken by the Indian government as the rationale behind its decision to upgrade India's rating. Measures such as the implementation of the Goods and Services Tax, demonetisation, Aadhaar, Direct Benefit Transfer and the recapitalisation of banks were some reform measures Moody's cited as reasons behind its decision.