Moody’s, US-based investors services have upgraded sovereign credit rating of India to Baa2 from Baa3 seeking improved growth prospects. It has also changed its rating to stable from positive. As per the Moody’s, the recent initiative of single tax, goods and services tax is a landmark reform that has turned India’s twenty-nine states into union single customs. Agency said, the goods and services tax initiative of the BJP will promote productivity by removing barriers to interstate trade. The Moody’s rating agency is come over with the biggest move by notching credit rating from Baa3 to Baa2. With this move, Moody’s rating agency has also appreciated NDA government GST initiative.
However, this rating upgrade comes after the gap of thirteen years as earlier Moody’s has upgraded rating in 2004 and now it notch to Baa2. While in 2015, Moody’s has changed the rating outlook from stable to positive. And this time again it comes up with stable rating outlook. The Baa3 credit rating was the lowest investment grade. Now Moody’s changed it to Baa2 to citing progress in economic and institutional reforms.
The upgradation of in the credit rating will enhance India’s high growth potential also it is the large and stable financial base for the government. It will have positive impacts on the investors. And the upgradation in rating will show a massive turn in the upcoming Gujarat elections. It will enhance the development of India in future also bring several development changes across India.