After global rating firm Moody’s Investors Service upgraded India’s local and foreign currency issuer ratings, leading economists and market voices credited the Narendra Modi-led government’s efforts in pushing through huge reforms. Moody’s Investors Service upgraded 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 revised the sovereign rating of India a notch above investment grade after a long gap of 14 years. Moody’s says that the reforms being pushed through by Modi’s government will help stabilize rising levels of debt. This one-level shift from the lowest investment-grade ranking puts India in line with the Philippines and Italy. Moody’s said in its report, ” Moody’s believes that those (reforms) 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 reform program will thus complement the existing shock-absorbance capacity provided by India’s strong growth potential and improving global competitiveness.” We take a look at what leading voices had to say about the upgrade.
Sunil Bharti Mittal, Founder and Chairman, Bharti Enterprises
“The ratings upgrade underlines the efficacy of the bold structural reforms undertaken by the Government in recent years. It clearly shows that the economy is turning the corner and poised for a big leap forward, highlighting the immense potential that India offers as a global investment destination. More importantly, it also emboldens the Government to stay true to the path of strong and transformational reforms in the coming days.”
Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI Bank
“I think this is a very well deserved recognition of the structural reforms that have been undertaken by this government over the last couple of years. It is very heartening to note that Moody’s has taken cognisance of India’s higher growth potential, and the increased economic resilience as compared to the other countries in our ratings’ cohort. The economic reforms have targeted overall formalisation of the economy, through many measures such as demonetisation, implementation of GST, Direct Benefit Transfers, Unique Identification etc.”
Uday Kotak, Chairman Kotak Mahindra Bank Ltd
“India is finally getting recognised in terms of being a stable economy and this is a long-term positive. But, India has to do a lot more to get up the curve. We have a long road ahead, we should continue on the path of reform. The opportunity ahead is even more.”
Rajnish Kumar, Chairman, State Bank of India
It’s a very positive development. It gives thumbs-up to the economic prudence and reforms, both which the government has initiated. The borrowing costs for the companies, for the country, for the corporates, is expected to come down, that itself will be a big benefit. Banks in India are well poised for growth in the economy.
Keki Mistry, Vice Chairman and CEO, HDFC
It’s a great move. I think the initiatives that the government has taken in recent items, starting with demonetisation, GST, RERA, etc are all taking effect, and rating agencies are now beginning to recognise India’s potential and that’s the reason for the upgrade.