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Arun Jaitley on Moody’s rating: Those who doubt reforms should introspect after upgrade

The US-based Moody’s on Friday upgraded India’s sovereign rating to Baa2 with a stable outlook, from Baa3 earlier.

business Updated: Nov 17, 2017 16:01 IST
HT Correspondent
Arun Jaitley during 40th Jamnalal Bajaj Foundation Awards at The Taj Mahal Palace Hotel in Mumbai on October 28, 2017.
Arun Jaitley during 40th Jamnalal Bajaj Foundation Awards at The Taj Mahal Palace Hotel in Mumbai on October 28, 2017.(HT File Photo)

Political leaders and government officials on Friday reacted to Moody’s India upgrade,with Union finance minister Arun Jaitley saying it is “encouraging” to see international recognition.

“We welcome this upgrade, we believe that it is a belated recognition of all the positive steps which have been taken in India in the last few years, which has contributed to strengthening of Indian economy,” said Jaitley at a press conference on Friday.  

“Many who had doubts about India’s reform process would now seriously introspect on their position,” Jaitley added.

For the first time in nearly 14 years,the US-based Moody’s on Friday upgraded India’s sovereign rating to Baa2 with a stable outlook, from Baa3 earlier.

BJP president Amit Shah and Goa chief minister Manohar Parrikar were among the leaders who hailed Modi’s policies as the Prime Minister’s Office posted the news from its Twitter handle.

“Acknowledging PM Narendra Modi’s government for its wide-ranging economic and institutional reforms, Moody’s upgrades India’s government bond ratings to BAA2 from BAA3 -- first ever upgrade since the year 2004,” tweeted Union minister Smriti Irani.

“It’s a welcome development but we also feel it was long overdue... it’s a recognition of the actions that the government has undertaken like GST, bankruptcy. We also need to keep all these things in perspective,” chief economic adviser Arvind Subramanian reacted.

Economic affairs secretary Subhash Chandra Garg said the upgrade is definitely a big vindication of the structural and institutional reforms that India is doing.

“The fiscal deficit consolidation, debt control and all so everything which the government has done in the past couple of years have been recognised. They are projecting a little rise in the trajectory going forward, so they are conscious of the real dynamics of the debt situation. We, of course, remain committed to the fiscal path,” Garg said.

Many supporters of Prime Minister Narendra Modi view the upgrade as a recognition of the government’s economic reforms, such as the Goods and Services Tax and the bankruptcy code. On Wednesday, the Pew Research Center said Modi was “by far” the most popular figure in Indian politics, according to a survey conducted among 2,464 respondents.

Finance secretary Hasmukh Adhia also said the path that the government has chosen for long-term reforms and fiscal consolidation is well recognised by investors already.

“The rating agency too has now confirmed it formally, which is welcome,” Adhia tweeted.

(With PTI inputs)