Moody's upgrade is recognition of structural, institutional, procedural reforms: Amitabh Kant

Niti Aayog CEO Amitabh Kant on Friday hailed US-based Moody's upgrade of India's sovereign rating and said it is a recognition of the vast number of structural, institutional and procedural reforms that the Government of India has carried out.

Kant said though it took 14 long years, at last Moody recognised that this government is committed to change, growth and financial discipline.

"This is recognition of the vast number of structural reforms, institutional reforms and procedural reforms that the Government of India has carried out in both fiscal revenue and ease of doing business," he said.

"But more important is the recognition to the fact that there is macro stability in the country and there is a lot of physical discipline and the fiscal deficit has been kept under check," he added.

Earlier in the day, Moody upgraded India's sovereign rating to Baa2 from Baa3 and changed the outlook to stable from positive, thus providing a much-needed impetus to the Modi government.

Reports suggest that the global rating company said the reforms undertaken by the government would lead to an enhanced business environment, fuelling the foreign and domestic investment, and subsequently the growth momentum. It also noted that the reforms implemented reduced the risk of a sharp increase in debt, even in potential downside scenarios.

However, Moody argued that measures such as the Goods and Services Tax (GST), demonetisation, and others would need time to settle in, and the impact would be witnessed in due course of time. It also claimed that India's growth potential superseded that of many other sovereign nations.