Standard & Poor’s raised the outlook for India’s “BBB-minus” rating back to “stable” from “negative,” saying Prime Minister Narendra Modi government’s “strong” mandate would allow it to implement fiscal and economic reforms.

S&P had cut India’s rating to “negative” in April 2012, and that came to symbolise the plummeting investor confidence in India because of corruption cases and the lack of action by the then Congress-led government.

However, foreign investor confidence in India has returned, leading to a surge in interest from overseas, after the election in May of Modi, who pledged to revive investments and boost economic growth.

“Our outlook revision indicates that we believe the current government’s strong mandate will enable it to implement many of its administrative, fiscal and economic reforms,” S&P said in its statement.

“We believe the current administration will remedy, to varying degrees, the growth impediments – policy paralysis, energy supply bottlenecks and administrative obstacles.”

India is now rated at the lowest investment grade with a “stable” outlook by all three major global credit agencies.

S&P cited India’s external position and its improving current account balance as other positive factors for its credit rating.

For more visit: Business Standard

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