High Five: S&P's outlook upgrade will boost investor confidence, says corporate India

New Delhi: India Inc said ratings agency Standard & Poor’s (S&P) move to improve the country’s outlook to stable from negative will boost investor confidence and enhance access of Indian firms to international funds.

“It will improve investor confidence and companies’ access to international funds. The outlook revision was based on the strong mandate received by the new government, which has enabled it to implement policies that will revive growth and boost investments,” said CII director general Chandrajit Banerjee.

Yesterday (September 26), Standard & Poor improved India’s outlook to stable from negative, saying the new political formation at the Centre has the capacity to push reforms and put the country back on high growth trajectory.

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“What global rating agency Standard & Poor’s has recognised today has already been acknowledged by global investors who have been pouring money into the Indian debt and stock markets for the last several months,” Assocham president Rana Kapoor said.

“In fact, our markets have been the best performing. In a way, the rating agencies seem to be behind the curve when it comes to reposing faith in the Indian economy,” he added.

The revision in outlook comes ahead of Prime Minister Narendra Modi’s high profile visit to the US, which among other things, is aimed at procuring investments. Modi is scheduled to meet top US corporates.

The stable outlook, it said, reflects the agency’s expectation that the newly-elected government will be able to implement reforms that spur growth, which in turn improves fiscal performance.

S&P’s has affirmed the ‘BBB-/A-3’ sovereign credit rating on India and revised the outlook on the long-term rating to stable from negative. Stable outlook reduces risk of any possible sovereign rating downgrade.

S&P’s also cautioned that it could lower the rating in case the government’s structural reform agenda stalls such that economic growth does not accelerate, or fiscal and debt ratios fail to improve.

After taking over as Prime Minister in May, Modi has launched a host of initiatives, including ‘Make in India’ campaign to ease business environment and fetch foreign direct investments.

PTI