India’s first sovereign upgrade by Moody’s Investors Service in 13 years has investors warming up to Prime Minister Narendra Modi’s string of economic and structural reforms. While the market was looking forward to an upgrade in the near future, the bump up to Baa2 from Baa3 this year came as a surprise since the long term impact of recent policy measures is still to play out, analysts and economists said in response to Moody’s decision to move up India’s rating, BloombergQuint reported.
The Chief Economic Adviser Arvind Subramanian told BloombergQuint that this move was ‘long overdue’.
We have always argued that ratings companies did not fairly reflect the nation’s underlying macroeconomic strength. The Goods and Services Tax (GST), in the long term, will definitely widen the tax base and be a “buoyant source of revenue” for the government, both by increasing the base and by adding compliance.Arvind Subramanian, Chief Economic Adviser
Justifying the upgrade, Moody’s said that reforms like the GST and measures to check the banking sector’s bad loans and direct benefit transfers, will help with the nation’s debt and enhance growth potential.
Here’s how everyone up the pecking order in the government appreciated the acknowledgment:
BJP President Amit Shah posted a series of tweets.
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