The global rating firm also backed the reforms undertaken the Modi government saying; "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".
Arvind Chari, Head, Fixed Income & Alternatives, Quantum Advisors, said the ratings upgrade seems to have come at a wrong time as the government is facing pressures on the fiscal front.
Moody's Investors Service upgraded its ratings on India's sovereign bonds for the first time in almost 14 years on Friday, saying continued progress on economic and institutional reforms will boost the country's growth potential.
New Delhi- The ruling BJP and the government on Friday cheered U.S. credit ratings agency Moody's upgradation of India's sovereign ratings, with party President Amit Shah and several ministers tweeting that it was a recognition of all the good work done by the NDA. Moody's had in January 2004 revised the rating on India to Baa3 from Ba1.
However, the rating agency has warned that if fiscal metrics and the outlook for general government fiscal consolidation deteriorates materially, then the ratings can be improved.
G Chokkalingam, Founder and Managing Director, of Equinomics Research and Advisory, said that the move is a big positive for the Indian economy.
Moody's expects GDP growth to moderate to 6.7 per cent in the fiscal year ending in March 2018. Standard & Poor's has kept India at the lowest investment grade, just above junk status, for a decade and Fitch Ratings for one year longer.
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Patrick went on to thank members of her team and her family, as well as boyfriend and fellow NASCAR driver Ricky Stenhouse Jr. She has not yet announced which team she will drive for, but did say that she does not anticipate a return to NASCAR.
Jaitley reiterated the government's commitment to structural reforms and said fiscal prudence will be maintained. It had in 2015 changed rating outlook to "positive" from "stable".
"I am sure that many who had doubts in their minds about India's reforms process would now seriously introspect on their own position itself", he told the media in a hurriedly-called press conference after the Moody's announcement.
He also refuted there was any link between the upgrade and the elections in Gujarat and Himachal Pradesh, and said stable reforms will not be possible if only election-oriented decisions are taken. "The rating agency too has now confirmed it formally, which is welcome".
"Government efforts to reduce corruption, formalize economic activity and improve tax collection and administration, including through demonetization and GST, both illustrate and should contribute to the further strengthening of India's institutions", the rating agency said.
It, however, said the high public debt burden remains an important constraint on India's credit profile relative to its peers, notwithstanding the mitigating factors which support fiscal sustainability.
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