New Delhi : Minister for State for Finance Jayant Sinha on Thursday said that the decision of Moody’s Investors Service to change India’s outlook to ‘positive’ merely reaffirmed the faith that domestic and international investors have put in India’s growth outlook and financial strength.
“The Moody’s decision continues to reaffirm the faith that rating agencies, global investors and our own domestic businesses have in India’s growth outlook and financial strength as a sovereign as well. The macro-economic situation over the past 10 months or so, while we have been in office has improved dramatically due to the actions that we have taken, as far as fiscal policy and reforms are concerned,” Sinha told the media.
“We have also benefitted from the declining commodity prices, specifically oil. Now we have to work to ensure that sector by sector growth picks up and benefits follow through to our consumers and businesses,” he added. Meanwhile, Finance Secretary Rajiv Mehrishi said that he hopes that Moody’s will soon upgrade India’s rating as well. “The Moody’s decision validates the pace and direction of economic policy and reform that this government has been carrying out. It also validates the fine balance that has been struck in the budget between fiscal consolidation and public investment in infrastructure and social programmes,” he said.
“It also affirms the positive policies and reforms that have been announced in the budget. So I feel that on the whole, it is good, and it is an upgraded outlook. Next, I hope there is an upgrade in the rating itself,” he added. Moody’s Investors Service has changed India’s outlook to positive, by stating that there is an increasing probability the actions of policy makers will enhance the country’s economic and financial strength over the coming years.
“There is an increasing probability that actions by policy makers will enhance the country’s economic strength and, in turn, the sovereign’s financial strength over coming years. India has grown faster than similarly rated peers over the last decade due to favourable demographics, economic diversity, as well as high savings and investment rates,” Moody’s was quoted as having stated. However, Moody’s will only upgrade its rating if it has evidence that the efforts to enhance growth and stabilise economic and institutional reforms are succeeding.
