Moody's praises government reforms, expects 6.7% GDP growth this fiscal

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Earlier, the Union Finance Minister, Shri Jaitley in his Keynote Address at Morgan Stanley 16th Annual Asia Pacific Summit in Singapore today on "India: Structural Reforms and Growth Path Ahead " elucidated on the current state of India's economy, outlining the key reforms being implemented by the present Government with a view to position India as an attractive global investment destination.

In the wake of India's rating being upgraded by global credit rating agency Moody, Finance Minister Arun Jaitley said it is "encouraging to gain worldwide recognition and not something that's happening in isolation".

It is "encouraging to have global recognition" and "not something happening in isolation", he said.

Moody's had last upgraded India's rating to "Baa3" in the year 2004.

Boosting investor sentiments, U.S. credit rating agency Moody's on Friday upgraded India's sovereign rating to Baa2 from its lowest investment grade of Baa3 after 13 years, a development Finance Minister Arun Jaitley said was "an extremely encouraging" global recognition of the structural reforms of last three years.

The rating upgrade was the first in 13 years.

The revision of the sovereign rating of India a notch above investment grade also lifted investors' sentiments at the Indian equity markets.

However, Moody argued that measures such as the GST, demonetisation, and others would need time to settle in, and the impact would be witnessed in due course of time. "We welcome it 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", he told reporters here.

"It is extremely encouraging that there is an worldwide recognition..."

Prior to this rating action, HDFC Bank's BCA and ratings were constrained by India's previous sovereign rating of Baa3 given the bank's significant exposure to the government in common with other Indian banks.

On the fiscal prudence front, Jaitley said as India continues on the path of fiscal prudence, more stability has been brought into the economy.