Thursday 9 December 2021
- Advertisement -
HomePoliticsIndiaMoody's rating upgrade to boost India's investment climate

Moody’s rating upgrade to boost India’s investment climate

Delhi: The sovereign rating upgrade by global agency Moody’s has put India alongside Italy, Spain, Bulgaria and the Philippines in terms of investment climate.

In effect, India has become the largest economy among Baa2-rated sovereigns, according to Moody’s. 

The agency today upgraded India’s sovereign credit rating by a notch to ‘Baa2’ with stable outlook after a gap of 13 years, saying reforms will foster sustainable growth.

Sovereign rating is issued to national governments and a barometer of the country’s investment climate. It gives investors insight into the level of risks, including political, associated with investing in a particular country.

According to Moody’s, Baa rating is medium-grade and subject to moderate credit risk while the modifier 2 indicates a mid-range ranking.

The government and some commentators in India have been pitching hard for a rating upgrade citing the country’s strong economic fundamentals, political stability and a slew of reforms.

Some of the key reforms that the Narendra Modi government has initiated include the Goods and Services Tax (GST), demonetisation, Aadhaar, bank recapitalisation, the Insolvency and Bankruptcy Code and targeted delivery of benefits through the Direct Benefit Transfer (DBT) system, among others.

The other two leading global rating organisations such as Fitch and S&P have BBB- rating with a stable outlook. BBB- is just a notch above the junk grade and the lowest in investment ratings.

The upgrade signals increasing confidence in the Indian economy vis-a-vis in the international market.

After Moody’s action, India is now three notches away from China. With Baa2 and a stable outlook, India is behind only in the BRICS bloc, Moody’s said, adding that India, China and South Africa are investment grade sovereigns in the grouping.

Foreign investors are expected to see the current action by Moody’s as another evidence of a growing Indian economy.

A rating upgrade usually gives a leg-up to the economy, prompting companies to expand capacity in the country, which also generates more jobs. This is also viewed as a positive sign by investors in stocks, bonds and markets, sparking more capital inflows.

The factors that rating agencies normally consider while deciding on sovereign ratings include FDI inflows, debt-to- GDP ratio and per capita income of nations, among others.

According to Moody’s, the average fiscal deficit of the other Baa2-rated countries was 4.2 per cent in 2016 and 3.1 per cent in 2017 (forecast).

The “median debt:GDP ratio for Baa2 countries as against India’s debt:GDP ratio stood at 42.7294 : 68.9645,” Moody’s said.

Moreover, on a PPP basis, India’s GDP per capita has outstripped the Baa-rated median for 19 countries. Between 2006 and 2016, this grew by 108 per cent against 74 per cent for all Baa-rated medians, it added.

1 view

Sirf News needs to recruit journalists in large numbers to increase the volume of its reports and articles to at least 100 a day, which will make us mainstream, which is necessary to challenge the anti-India discourse by established media houses. Besides there are monthly liabilities like the subscription fees of news agencies, the cost of a dedicated server, office maintenance, marketing expenses, etc. Donation is our only source of income. Please serve the cause of the nation by donating generously.

Support pro-India journalism by donating

via UPI to surajit.dasgupta@icici or

via PayTM to 9650444033@paytm

via Phone Pe to 9650444033@ibl

via Google Pay to dasgupta.surajit@okicici

#BQOpinion | Why @CK_Narayan sees the Maruti Suzuki stock going in for a complex, multi-leg corrective pattern.

Read on @BloombergQuint:

पीएम श्री @narendramodi जी के नेतृत्व में केंद्रीय मंत्रिमंडल द्वारा "PMAY(ग्रामीण)" को मार्च 2024 तक जारी रखने की स्वीकृति प्रदान की गई।

नव भारत के निर्माण की संकल्पना को साकार करने हेतु ग्रामीणों को "अपना घर" प्रदान करना अभूतपूर्व उपलब्धि साबित होगी।

आभार मा० प्रधानमंत्री जी!

A Congress leader offered 50 lakhs for the head of Muslim who converted to Hinduism.

A CM told the local media they will get ads for positive coverage.

A Samajwadi MP asked Muslims not to vote BJP if they want a second wife.

All in the last 24 hours, buried by Lutyens media.

The @StratisphereNFT to be launched on the 18th January 2022

From the 20th December each day till release they will be announcing giveaways, drops and collaborations 🔥

#NFTs #NFTcommunity #NFTartist #NFTcollectors

Read further:

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisment -



%d bloggers like this: