Moody's upgrades India's ratings: 10 things you need to know

Moody's Investors Service upgraded its ratings on India's sovereign bonds for the first time in almost 14 years on Friday, saying continued progress on economic and institutional reform will boost the country's growth potential.

He added, the number of structural reforms that have taken place in the last three to four years have placed India "on path of a high trajectory growth". Moody's believes that those (reforms) implemented to date will advance the government's objective of improving the business climate, enhancing productivity, stimulating foreign and domestic investment, and ultimately fostering strong and sustainable growth.

In the wake of India's rating being upgraded by global credit rating agency Moody, Finance Minister Arun Jaitley said it is "encouraging to gain worldwide recognition and not something that's happening in isolation".

"Introduction of Aadhar, recapitalization of public sector banks, smooth transition of GST and demonetization have all been landmark reforms", he said. Stating that all these steps constitute major reforms and are directional, he said the rating upgrade therefore is "extremely encouraging".

He added that coming from an worldwide agency, the recognition is a source of encouragement.

"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. This is not something that is happening in isolation.

The minister said that with the introduction of GST, market barriers had been removed.

On mention of India's fiscal prudence in the Moody's report, Jaitley said "India continues on the path of fiscal prudence which has brought stability to the economy".

However, India Inc cheered the ratings upgrade.

Prior to this rating action, HDFC Bank's BCA and ratings were constrained by India's previous sovereign rating of Baa3 given the bank's significant exposure to the government in common with other Indian banks.

Finance Minister Arun Jaitley on Friday termed Moody's upgrading India's sovereign rating after 13 years as "belated recognition" of all the reforms taken by Prime Minister Narendra Modi-led-NDA government in last few years.