Railways Minister Piyush Goyal today said that Standard & Poor's (S&P) is a conservative agency and its decision to retain India's rating with a stable outlook is a "huge endorsement" of the policies of the Modi government.
"We are extremely happy that S&P has continued to affirm 'BBB-minus' with a long-term sovereign rating with stable outlook," Goyal told reporters.
The rating agency is known worldwide to be a far more conservative when compared with Moody's or Fitch, he added.
"The fact that they have continued to give a stable rating but in the text have given so much praise for the policies of the government and for PM Modi's bold reform initiatives is a huge endorsement for the work which this government has done," Goyal said. S&P 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. "S&P usually has a time lag and in that circumstance to get the kind of favourable comments that S&P has given in its report is an affirmation of the policies of the PM Modi's government being recognised worldwide," Goyal noted.
The report has spoken at length that growth will continue to remain strong, they have recognised that the quarterly slowdown in the GDP growth is a temporary phenomenon largely due to the implementation of GST which has been praised at length in the report, he added. "They (S&P) have also reflected confidence that India's external position will continue to remain strong and fiscal deficit will remain in line with the expectations," Goyal said.
The report has also suggested that despite hurdles coming in the upper house, the Narendra Modi-led government has been very deft and successful in making transformational reform possible in India, he added.
He said that policy initiatives like GST, the bankruptcy code, NPA resolution framework and bank recapitalisation among others were praised by the rating agency. "They have also praised India for having strong democratic institutions including the press and have said free press promotes policy stability and compromise," Goyal said. "So, all in all, it is a very satisfying report from S&P. I am quite delighted that they have reflected on the successes of the Modi government in state elections and have actually predicted following the series of successes in the state election in 2017; they expect much more success in state elections in the months ahead," he added.