Rating agency Standard & Poors has reversed its opinion about the Indian economy and upgraded the rating outlook to stable from negative while maintaining the credit rating at BBB- ( just above Junk Category). This is a major change from its position last year when it said India faces one in three chances of a downgrade.
It will be a huge sentiment boost for India. The revision in outlook is good news for the Indian economy as raising debt will become cheaper for Indian companies and it will also encourage foreign institutional investors to Invest in Indian Market . The move has boosted bank shares as it now makes it easier for lenders to raise debt from international market. I has been possible due to improved political setting and a conducive environment for reforms, which could boost growth prospects improve fiscal management. The ratings on India reflect the country's strong external profile, combined with its democratic institutions and free press, both of which underpin policy stability and predictability. These strengths are balanced against the vulnerabilities stemming from the country's low per capita income and weak public finances
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