Good news for India, according to the Standard & Poor’s, India is the only bright spot in the entire Asia Pacific region. After two years of receiving embarrassing ratings form S&P, India picked up an impressive pace ever since the Modi government has come to power.
According to S&P, there are two reasons for this change in outlook. First, India now has a stronger political mandate that improves the government’s ability to implement reforms, spur growth and improve its performance. Secondly, India’s external account has improved; Narendra Modi’s visits to United States, Australia, its neighbours and ally countries have come to fruition.
S&P is one of the highly recognised financial intelligence companies around the globe. It is a division of the McGraw-Hill Companies, and has an experience of more than 150 years of providing financial services to investors worldwide. The company provides a number of services related to financial research; however, they are mostly known for their credit ratings.
In the year 2012, S&P had cut India’s BBB-minusrating to negative, leaving it on the verge of a “junk” rating. Under the regime of the previous United Progressive Alliance government, India didn’t really see much progress because of the corruption and scandals and the several policies which ended up on papers alone.
India’s rating upgraded from negative to stable in September 2014. Within a duration of another three months, India has been seen as the only bright spot in the Asia Pacific region, as per S&P. There is a possibility of ratings upgrade as well. In an otherwise shaky finish to the year 2014 with all other economies losing momentum, India is stable. “Only India is bucking the trend,” said S&P in a report on the Asia Pacific region’s credit outlook released on Tuesday. “India has been the region’s brightest spot,” it added.
The Modi government’s initiatives in cutting red tape can raise India’s ranking straight from 142 to 50 in the World Bank’s “Ease of Doing Business” index. The funds generated by Jan Dhan Yojna will be utilised to provide subsidies, scholarships and other rights that will benefit the needy, obviating the fraudulent involvement of middlemen. This along with other progressive measures to speed up economic stability has led to optimism that the government would be able to turn around the country’s economy, which has been grappling with the worst slowdown in 25 years.
Confidence of foreign investors has returned after Modi was elected as the Prime Minister in May this year. Shares have surged to record highs and bonds have also rallied, in a remarkable comeback from last year. PM Modi’s ambitious agenda of economic reform are sure to bolster the current government’s efforts in gaining economic stability.
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