Under pressure for the fallout of GST and demonetisation on businesses, Prime Minister Narendra Modi and BJP chief Amit Shah were on Friday elated as Moody’s upgraded India’s sovereign ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive.
Taking to Twitter, the duo shared the news along with links to the article quoting Moody’s.
“Moody’s believes that the @narendramodi Government’s reforms will improve business climate, enhance productivity, stimulate foreign and domestic investment, and ultimately foster strong and sustainable growth. @MoodysInvSvc,” tweeted Modi along with a news link.
Meanwhile, the Bharatiya Janata Party (BJP) chief shared a series of tweets hailing the Modi government for its economic reforms.
“Moody’s believes that Modi Govt’s reforms will improve the business climate, enhance productivity, attract more investment & put India on a higher growth trajectory,” Shah said.
“Moody’s remains bullish on reforms done by Modi Government and is confident of India’s growth potential,” he added.
“India’s largest ever increase in Ease of Doing Business rankings, Pew study ascertaining PM @narendramodi ji’s popularity, Moody’s upgrade are all reflections of Modi Govt’s hard-work and reform process,” Shah said further.
The upgrade is likely to have a positive rub-off effect on equities, rupee, and bonds, industry insiders said.
In an official note, Moody’s said the decision to upgrade India’s rating was based on the expectation that continued progress on economic reforms will enhance India’s high growth potential.
According to Moody’s, reforms like Goods and Services Tax (GST), Aadhaar and direct benefit transfer schemes among others have played a key role in the improvement of India’s rating.
The upgrade comes after a gap of 13 years as Moody’s had last upgraded India’s rating to ‘Baa3’ back in 2004. In 2015, the rating outlook was changed to ‘positive’ from ‘stable’.
The ‘Baa3’ rating was the lowest investment grade — just a notch above ‘junk’ status.