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| Edited By: |Source: PTI |Updated: Mar 17, 2018, 04:49 AM IST
Global ratings agency Moody's today upgraded India's sovereign local currency rating by a notch in light of the country's commitment to economic and fiscal reforms.
The upgrade of the government bond local currency rating to Ba1 from Ba2 is still a notch below investment grade, but will improve investors' faith in the Indian economy.
"The upgrade of the local currency sovereign rating to Ba1 was prompted by the Indian government's adoption of a medium-term (2010-2015) fiscal consolidation strategy, which is supported by a broadening structural reform programme," said Moody's Vice President and the company's lead sovereign analyst for India, Aninda Mitra.
Meanwhile, the ratings agency retained India's foreign currency rating at Baa3, which is the lowest investment grade.
Moody's said the outlook on the local currency rating remains positive, while the outlook on the foreign currency sovereign rating remains stable.
After India's fiscal deficit targets went awry due to the stimulus packages offered by the government to blunt the impact of the global financial crisis, many ratings agency had warned of sovereign ratings cuts.
The Centre's fiscal deficit had more than doubled to over 6% during 2008-09, though a central law mandates a 3 per cent deficit. Its fiscal deficit again widened to over 6.5 per cent during 2009-10.
However, a partial rollback of the stimulus enabled the government to estimate fiscal deficit at a lower 5.5 per cent this fiscal.
