NEW DELHI, April 9: Sixteen months after it warned of a downgrade, ratings agency Moody’s on Thursday raised its outlook on India to positive, hoping for further steps from the rendra Modi government to push growth. The fince ministry said this was significant and promised more.
“India has grown faster than similarly-rated peers over the last decade due to favourable demographics, economic diversity, as well as high savings and investment rates,” Moody’s Investors Service said, adding that this will keep the country’s economic expansion on track.
“Moody’s decision to revise the ratings outlook to positive from stable is based on its view that there is an increasing probability that actions by policy-makers will enhance the country’s economic strength and, in turn, the sovereign’s fincial strength over coming years.”
The agency, however, did not raise the sovereign credit rating from Baa3, awaiting more signs from the Indian economy. In December 2013, during the tenure of the United Progressive Alliance (UPA), it had warned of a downgrade that would have potentially hurt India’s global standing.
But Moody’s specified what could lead to an upgrade. “Evidence over the coming months that policymakers are likely to be successful in their efforts to introduce growth-enhancing and growth-stabilising economic and institutiol reforms would lead to the rating being considered for an upgrade.”
Reacting to the development, Fince Minister Arun Jaitley said: “Moody’s has changed the rating outlook to positive from stable and affirms Baa3 rating. The upgrade in outlook is significant, but we’ve got to do more.”
The markets reacted positively. The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) rose 177.46 points or 0.62 percent, to close at 28,885.21 percent. IANS