Indian stocks surge on Moody's first upgrade in 14 years
- Author: Eleanor Harrison Nov 18, 2017,
Nov 18, 2017, 0:25
Former Economic Affairs Secretary Shaktikanta Das said in a tweet: "Moodys upgrade India's credit rating after 13 years".
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 Investors Service today upgraded India's local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive.
Credit ratings indicate the general creditworthiness of an entity (such as a bank, corporate or sovereign) and the likelihood that it will meet its financial obligations in a timely manner.
The four institutions with revised rating are Export-Import Bank of India (EXIM India), HDFC Bank, Indian Railway Finance Corporation Limited (IRFC) and State Bank of India (SBI), Moody's said in a statement. "We welcome (the upgrade) and believe that it is a belated recognition of all the positive steps taken in India in the last few years which have contributed to the strengthening of the Indian economy", Jaitley said.
Chief Economic Advisor Arvind Subramanian, whose Economic Survey had a piece on the "poor standards" of the rating agencies, echoed these sentiments, noting that the upgrade was long overdue. The report said: "Measures (GST, DBT and Demonetisation) will increase the degree of formality in the economy, broaden the tax base, and promote expenditure efficiency through rationalisation of government schemes and better-targeted delivery will support the expected, though very gradual, improvement in India's fiscal metrics over time". "We maintain fiscal discipline and continue to remain on the fiscal glide path", he stressed. "Many who had doubts in their minds about India's reform process would now seriously introspect on their positions itself", he said. The minister said the major negative impact from the back-to-back policy reforms of demonetization and the goods and services tax rollout had declined.