Indian industry on Friday said Moody’s sovereign rating upgrade was in sync with the various government reform measures over the last three-to-four years.
“Moody’s upgrade of India’s rating is a reaffirmation of the various reform measures undertaken by the government over the last three-to-four years and we welcome this move”, said FICCI President Pankaj R Patel. “The ratings upgrade along with the recently reported improvement in India’s ease of doing business ranking underline the fact that we are moving in the right direction.”
“India’s growth story is more promising than ever and we see a further improvement in confidence level of global investment community. This move will not only give a further push to foreign investment inflows into the country but will enhance our prospects of borrowing money abroad at better rates,” he added.
US credit rating agency Moody’s upgraded India’s sovereign rating to Baa2 from its lowest investment grade of Baa, while changing the outlook for the country’s rating to stable from positive, and said it was based on the Indian government’s “wide-ranging programme of economic and institutional reforms.” The rating agency simultaneously upgraded India’s local and foreign currency issuer rating to Baa2 from Baa3.
CII’s Director General Chandrajit Banerjee said: “The upgrade in India’s rating by Moody’s comes as a major boost to market sentiment on India and a recognition of the transformational reforms being conducted by the government.” “It reaffirms our belief that measures such as GST, doing business and bankruptcy reforms, public spending on infrastructure, reduced use of cash and banking reforms have all contributed to the rating upgrade,” Banerjee said. “The upgraded rating of Baa2 will enable lower cost of borrowing in international markets for Indian businesses and attract more foreign fund flows into India.”
Another major business body Assocham Secretary General DS Rawat said: “Rating upgrade by Moody’s Investors Service on India’s sovereign bonds would make a huge a difference to India Inc’s capacity to tap the global financial markets at very competitive rates.”
“With reinforcement of a perception of being a prudent and growing economy, India would continue to attract foreign funds both in the form of FDI and FII. Some of the recent steps like recapitalisation of banks, GST, taking off the Insolvency and Bankruptcy Code have gone quite well with the Moody’s,” he added.