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".
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. In addition, it has changed to stable from positive the ratings outlook for IRFC; EXIM India and its London branch; HDFC Bank, its Bahrain and Hong Kong branches; as well as SBI and its Hong Kong, London, and Nassau branches.
The "Baa3" rating was the lowest investment grade - just a notch above "junk" status.
It cautioned however that high-debt burden remains a constraint on the country's credit profile.
The agency has also upgraded HDFC Bank's baseline credit assessment (BCA) and adjusted BCA to baa2 from baa3.
Going forward, the government will continue to emphasise implementation of reforms and "reap the benefits of the growth process in terms of expenditure, infrastructure building and rural areas", Jaitley said. Moody's had last upgraded the sovereign ratings of the country to Baa3 in 2004.
At 0550 GMT, the benchmark 10-year bond yield was down 9 basis points at 6.97 percent, the rupee was trading stronger at 64.84 per dollar versus the previous close of 65.3250, while the NSE share index () was 1.1 percent higher.
Stating that reforms will foster sustainable growth, Moody's said government is mid-way through a wide-ranging programme of economic and institutional reforms.
Moody's move has also been cheered by market participants.
"The timing is little dicey for the upgrade given that there are lot of concerns over the government's fiscal discipline", said a foreign bank dealer, adding he did not expect other agencies to follow Moody's. It also said that the formation of a Monetary Policy Committee (MPC) has already enhanced the transparency and efficiency in India.