After receiving a rating upgrade from Moody’s Investors Service back in April, the government is hopeful of a rating upgrade from other credit agencies by the year-end on the back of policy initiatives, moderating inflation and an improvement in the fiscal position of the government.
Notably, Moody’s Investors Service revised India’s sovereign credit rating outlook to “positive” from “stable” based on the policy measures taken by the government that would allow India’s growth to outperform against its peers in the medium term and improve its macroeconomic, infrastructure and institutional profile.
According to Finance secretary, Rajiv Mehrishi, the impact of policy reforms should be apparent by the end of this year and credit agencies would further improve the ratings. Further, he also highlighted that the benefits of decline in crude oil prices was likely to sustain in 2015-16 since this would reduce the oil import bill and favorably impact the current account balance, besides moderating the price hike because petroleum products are used in the production of almost every commodity.
Finance Secretary asserted that the government has made significant improvement in the last one year to improve the macro-fundamentals of the economy such as a sharp moderation in inflation, control of current account deficit and fiscal deficit, stability of the rupee, increased capital flows, bringing confidence among domestic and foreign investors.