Rating agency Standard & Poor's report on India is a reflection of its appreciation of the steps taken by the government to keep the economy stable and ensure a high growth trajectory, Defence Minister Nirmala Sitharaman said today.
She said besides keeping its sovereign rating for India unchanged, the rating agency complimented the country on several counts including the roll-out of the GST, introduction of the bankruptcy code and recapitalisation of the state-owned banks.
"The S&P had inferred that over the next two years, growth in India will remain strong and the country will maintain its sound external accounts position," Sitharaman said.
The rating agency today kept its sovereign rating for India unchanged at 'BBB-minus' with 'stable' outlook, saying vulnerabilities stemming from low per capita income and high government debt balance strong GDP growth.
The report said that the demonetisation and the roll-out of the GST may have led to some quarterly cooling off but observed that the medium term outlook for growth in the country is favourable, Sitharaman noted.
"The report has also appreciated India's efforts in improving monetary credibility and has noted the presence of strong democratic institutions and free press," she said.
Referring to India's external debt, she said the report has observed that external indebtedness is likely to remain contained throughout the forecast period underpinned by an improved current account deficit.
"It further asserts that effort of the government to expand tax base by demonetisation has increased the number of tax registrants and that introduction of GST will further accelerate government revenue," she said.
The rating stance taken by S&P Global Ratings comes days after Moody's Investors Service raised India's sovereign rating for the first time in over 13 years on growth prospects boosted by continued economic and institutional reforms.
In a statement, S&P said India's rating reflects its strong GDP growth, sound external profile and improving monetary credibility.
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