Government’s good work led to Moody’s upgradation: India Inc

New Delhi, Nov 17 (IANS) Echoing the government's views, Indian industry on Friday said Moody's sovereign rating upgrade was in sync with the various government reform measures over the last three-to-four years.

"Moody's upgrade of India's rating is a reaffirmation of the various reform measures undertaken by the government over the last three-to-four years and we welcome this move", said FICCI President Pankaj R. Patel.

"The ratings upgrade along with the recently reported improvement in India's ease of doing business ranking underline the fact that we are moving in the right direction."

"India's growth story is more promising than ever and we see a further improvement in confidence level of global investment community. This move will not only give a further push to foreign investment inflows into the country but will also enhance our prospects of borrowing money abroad at better rates," he added.

US credit rating agency Moody's on Friday upgraded India's sovereign rating to Baa2 from its lowest investment grade of Baa, while changing the outlook for the country's rating to stable from positive, and said its was based on the Indian government's "wide-ranging programme of economic and institutional reforms".

The rating agency simultaneously upgraded India's local and foreign currency issuer rating to Baa2 from Baa3.

CII's Director General Chandrajit Banerjee said: "The upgrade in India's rating by Moody's comes as a major boost to market sentiment on India and a recognition of the transformational reforms being conducted by the government."

"It reaffirms our belief that measures such as GST, doing business and bankruptcy reforms, public spending on infrastructure, reduced use of cash and banking reforms have all contributed to the rating upgrade," Banerjee said

"The upgraded rating of Baa2 will enable lower cost of borrowing in international markets for Indian businesses and attract more foreign fund flows into India."

Another major business body Assocham Secretary General D.S. Rawat said: "Rating upgrade by Moody's Investors Service on India's sovereign bonds would make a huge a difference to India Inc's capacity to tap the global financial markets at very competitive rates."

"With reinforcement of a perception of being a prudent and growing economy, India would continue to attract foreign funds both in the form of FDI and FII. Some of the recent steps like recapitalisation of banks, GST, taking off the Insolvency and Bankruptcy Code have gone quite well with the Moody's," he added.

"The ratings upgrade underlines the efficacy of the bold structural reforms undertaken by the government in recent years. It clearly shows that the economy is turning the corner and poised for a big leap forward, highlighting the immense potential that India offers as a global investment destination. More importantly, it also emboldens the government to stay true to the path of strong and transformational reforms in the coming days," said Sunil Bharti Mittal, Chairman, Bharti Enterprises.

Banking major ICICI Bank's MD and CEO Chanda Kochhar said: "This is a well-deserved recognition of the structural reforms that have been undertaken by this government over the past couple of years. It is also very heartening to note that Moody's has taken cognizance of India's higher growth potential and increased economic resilience as compared to other countries in our rating cohort."

"On the banking front, the recent recapitalization measure and the formalisation of the insolvency and bankruptcy code will strengthen the banks as also facilitate speedier resolution of NPAs," Kochhar said.

State Bank of India's Chairman Rajnish Kumar said: "The revision in ratings by Moody's is a positive development and is a great enabling factor for Indian financial markets."

"Simultaneously, the rating upgrade of SBI amongst others indicates that Indian financial system remains resilient and robust and poised to support growth," Kumar said.

"The bond yields, Indian rupee and stock markets have already reacted favourably. Over a point of time, this will reduce borrowing costs of government and financial institutions and result in increased investor confidence in the India growth and reform story."

"We believe that Moody's rating upgrade is a big boost for India, as it will improve sentiments around ease of doing business within local and global investors. This will also advance the government's objective of enhancing productivity and driving sustainable growth. Improvement in the credit profile will be a big positive for Indian companies and the government," said Sumeer Chandra, Managing Director, HP Inc.

Anis Chakravarty, Lead Economist, Deloitte said: "Moodys has undertaken the long awaited upgrade in India's sovereign rating. The upgrade is only one notch above the lowest investment grade to Baa2 and still may not appear to be in sync with the level of economic growth as well as the strong macro-economic fundamentals prevalent in the country."

FinTech firm MobiKwik's founder Bipin Preet Singh said: "India has made its place among the major economies of the world... the ratings will significantly improve business climate, enhance productivity, stimulate foreign and domestic investment and foster strong and sustainable growth across verticals including the FinTech sector.

"The rating is an acknowledgement that the reforms undertaken by the government would lead to an enhanced business environment, fueling the foreign and domestic investment, and subsequently the growth momentum," Singh said.