he US-based agency lifted ratings on India’s sovereign bonds to Baa2 from its lowest investment grade of Baa3, and also changed the outlook for the country’s rating to stable from positive.
Sovereign credit ratings are a barometer of a country’s credit profile and regulatory climate. A favourable rating helps governments and companies raise capital in global financial markets. Also, institutional investors rely on ratings for an indication of a country’s socio-political environment before making investment decisions.
The rating upgrade is seen as an endorsement of a range of bold economic decision made by Prime Minister Modi, including the rollout of a landmark Goods and Services Tax that forged India into a unified market. It comes just weeks after the World Bank moved India up 30 places in its annual ease of doing business rankings.
