India Inc too lauded it.
"We welcome this upgrade, we believe that it is a belated recognition of all the positive steps which have been taken in India in the last few years, which has contributed to strengthening of Indian economy", Jaitley said. The Narendra Modi government has been pitching for an upgrade for quite some time now citing various reforms initiatives. It also noted that the reforms implemented reduced the risk of a sharp increase in debt, even in potential downside scenarios.
But Moody's lowered India's growth projection for the current fiscal because of the impact of demonetisation and the Goods and Services Tax (GST). Moody's also expected the real GDP growth to moderate to 6.7% in the fiscal year ending in March 2018.
"Now after 13 years we get the ratings upgraded and I am sure many who had doubts would seriously introspect on their positions", he said. "The structural reforms that have placed India on the path of a high trajectory growth", Jaitley said.
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Jaitely said: "Smooth transition of GST is universally recognised as a landmark reform in Indian tax structure". Stating that all these steps constitute major reforms and are directional, he said the rating upgrade therefore is "extremely encouraging".
On Friday, the government cheered the upgrade as an endorsement of its reforms.
He added that coming from an global agency, the recognition is a source of encouragement. However, we must bear in mind that this is not something happening in isolation. The Finance Minister, Shri Jaitley re-iterated his Government's commitment for both increasing the public expenditure on infrastructure and creating environment for private participation in infrastructure to boost employment and provide impetus to overall economic growth. Modiji and Moody's "Jodi' have failed", Congress spokesperson Randeep Singh Surjewala tweeted.
The rating upgrade comes after a gap of 13 years - Moody's had last upgraded India's rating to "Baa3" in 2004.