"The decision to upgrade the ratings is underpinned by Moody's expectation that continued progress on economic and institutional reforms will, over time, enhance India's high growth potential and its large and stable financing base for government debt, and will likely contribute to a gradual decline in the general government debt burden over the medium term", the agency's press release says.
President of industry chamber Ficci Pankaj Patel said the development underlines the fact that India is moving in the right direction. "We don't think the other two global rating agencies - Fitch and S&P - will follow up in a hurry, based on their cautious rhetoric", she said, noting their concerns on "weak" state and central government finances.
Senior Bharatiya Janata Party leader Yashwant Sinha on Friday took a dig at the Narendra Modi government said that there should be a midnight ceremony in Parliament to celebrate Moody's upgrade of India's rating. "We believe that the upgrade is a belated recognition of all our positive steps that have contributed to the strengthening of the Indian economy". "Due to ratings upgrade will help in reducing our costs of crude oil imports on the other", Mukesh Kumar Surana, chairman and managing director Hindustan Petroleum Corporation Limited told The Hindu.
Stocks of firms like HPCL, IOC, ONGC, GAIL and NTPC rallied as these firms were amongst those which got an issuers and ratings upgrade.
This period has, moreover, seen the country grow from a barely $ 620 billion to a $ 2.3 trillion economy, with its official foreign exchange reserves, too, soaring from some $ 110 billion to nearly $ 400 billion.
Scotland wins historic victory over alcohol pricing
Scotland's First Minister Nicola Sturgeon said she was "absolutely delighted" at the decision but critics tore into it saying it will hit poor families hardest.
Yesterday, for the first time in last 14 years, they have upgraded India's credit rating, and this is indeed big news.
The government and the Finance Ministry had been seeking an upgrade for the past few years, citing the high economic growth and improved fiscal deficit. The Sensex was trading 384.73 points or 1.16 per cent higher during the early session. But, the momentum failed to carry on as investors rushed in to shave profit as the index closed the day at 33,342.80, up 235.98 points - or 0.71 per cent. Moody's projected India's real GDP growth to moderate to 6.7 per cent in the current financial year, from 7.1 per cent in 2016-17.
Atul Pandey, Associate Partner, Khaitan and Co said the present government in last three years has carried out several economic regulatory reforms which has attracted more foreign investment and has also eased doing of business in India. On Friday, the government cheered the upgrade as an endorsement of its reforms.
Arvind Chari, Head, Fixed Income & Alternatives, Quantum Advisors, said the ratings upgrade seems to have come at a wrong time as the government is facing pressures on the fiscal front.