Forget Moody’s, Focus on the Mood–Economic Times

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Global credit rating agency Moody’s has nipped India’s long-term sovereign rating from ‘Baa2’ to a notch lower, ‘Baa3’, but it does not really matter as the Covid-19 pandemic has affected the short-term outlook worldwide, and India seems well-poised to pick up economic speed sooner rather than later. It is, in fact, a rating realignment, and not a downgrade below other economies. India does remain investment grade for the trio of Moody’s, S&P’s and Fitch. As Prime Minister Narendra Modi emphasised at the CII Annual Session, in the post-Covid world, there would be greater trust on Indian expertise and skills. Notice that more than 150 countries have been helped with prompt medical supplies. Indeed, the world is looking for a trusted, reliable partner. And global investors cannot be unaware that India has the requisite potential, strength and ability.

Besides, as world trade remains severely affected and very much in negative territory, the Indian economy, which is not overtly reliant on exports, is on a strong wicket. The sharp drop in oil prices would also boost India’s external account; the rupee has nevertheless weakened because the US dollar has strengthened. Further, foreign portfolio investors have stepped up funds flow into India in the past month, and for good reason. Multilateral institutions like the IMF count India among the few economies to recover fast. In addition, the reform measures announced by finance minister Nirmala Sitharaman in key sectors like mining, agriculture, aviation and industry have the potential to boost value-addition here. PM Modi has stressed the policy intention behind Atmanirbhar Bharat is to make India globally competitive and fully integrated with the global economy.

Robust local supply chains must be forged that strengthen India’s stake in global supply chains and networks. Efficiently. Our mantra needs to be Intent, Inclusion, Investment, Infrastructure and Innovation, the PM said. Indeed. And as our decision makers walk the talk, and they must, Moody’s would surely need to re-rate India’s sovereign rating. Soon.

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