Global agency Moody’s on Tuesday said it will upgrade India’s rating if the Government is able to push through reforms, inflation stabilises, regulatory environment improves and infrastructure investment rises.
“India’s rating could be upgraded if Moody’s expectations of gradual but credit positive reforms are realised in actual policy implementation and if the recent improvement in inflation, fiscal and current account ratios is sustained,” Moody’s Investors Service on Tuesday said in a report.
The agency said that it had changed its outlook on India in April to positive from stable, based on premise that the proposed policies are likely to lower sovereign credit risk by stabilising inflation, improving the regulatory environment, increasing infrastructure investment while maintaining the ongoing improvement in fiscal ratios.
It has a ‘Baa3’ rating on India with a positive outlook. Since 2004, Moody’s has rated India at ‘Baa3’, the lowest investment grade —- just a notch above ‘junk’ status.
The rating could be upgraded if these expectations “are reflected in policy progress and macroeconomic indicators over the next year, and if we view this progress as sustainable.”