Recognition of reforms, says Jaitley on upgradation of India's sovereign credit by Moody's

Jaitley at a press conference said: "It is a delayed recognition of the steps taken by the Indian government and the reform processes brought in the last three to four years."

"Also it is a recognition of the fact that India is continuing the path of fiscal prudence that had brought stability to Indian economy" the FM added.

Jailtey even highlighted demonetisation, Goods and Services Tax (GST) as some of the major steps taken by the Modi government, which assumed power in 2014, leading to the recognition by Moody's.

He even referred to the steps as "directional" as all of them have fixed "road maps".

Taking a jibe at the critics of the present government, without taking any name, the FM said: "All those people who had doubts on India's progress would surely introspect."

According to the raise by Moody's, India's position has gone up from 'Baa3' to 'Baa2'.

The change has been made after 13 years.

The last change was done in 2004, when India was rated Baa3, a lower investment grade, above 'junk' status.

Experts believe that the overseas borrowing costs for Indian companies are likely to come down after the new ratings.

"While a number of important reforms remain at the design phase, Moody's believes that those implemented to date will advance the government's objective of improving the business climate, enhancing productivity, stimulating foreign and domestic investment, and ultimately fostering strong and sustainable growth," the agency said.

"In the meantime, while India's high debt burden remains a constraint on the country's credit profile, Moody's believes that the reforms put in place have reduced the risk of a sharp increase in debt, even in potential downside scenarios," it added.

Revenue Secretary Hasmukh Adhia said, "The path that Government has chosen for long term reforms and fiscal consolidation is well recognised by investors already...The rating agency too has now confirmed it formally, which is welcome."

According to the agency, India's real GDP growth will come down to 6.7 percent in the fiscal year ending in March 2018, from 7.1 per cent a year earlier.

However, from 2019 onwards, it's expected to rise to rise to 7.5 percent.