MOODY’S UPGRADE and What does it mean for India? What lead to the up gradation, and discuss the challenges ahead?

Recently Moody’s upgrade occurred so many years where the credit rating is upgraded from positive to stable. Let us understand it in detail  .

What is credit rating?
An ability of a person/ organization / country to fulfil their financial commitment based on previous dealings. In simple terms it shows reliability of a nation in matter of economic transactions. It attracts investment and improves image for investors.
What are causes behind this upgrade in rating after decade ago?

There have been so many reforms in recent years like

-          GST Implementation

-          Tackling the bad loan issue

-          Insolvency and bankruptcy Code

These reforms have advanced the
government’s objective for improving
business climate , enhancing productivity,
stimulating foreign and domestic investment,
and ultimately fostering the sustainable growth.

Some other factors which includes- rise in foreign reserve to absorb the shock of the market also
is a plus factor. There has been a constant growth in stock market where rupee gained
handsomely, that shows investors faith in Indian economy when the momentum has slowed
down to a 13 quarter low.

India’s worrying factor According to the Moody’s Ranking—India’s Economy has been changed from Positive to stable due to high public debt burdens.  Indian has 68% of its GDP’s debt during 2016 which may rise to 69% to the next fiscal year. (Fiscal year is considered as financial year that means from April1st to 31^st March of the Next year. )
Fiscal metrics may vary and the government may face losses due to constant farm loan waivers by the state and centre’s implementation of Pay Commission and weak tax receipt due to teething problems of GST. This may lead to the fiscal deficit in near terms. 

Conclusion: Overall reforms have been good though economy has suffered for short duration. In upcoming time the government should abstain from luring the populism.