Rating agency Moody’s on Tuesday promoted India’s rating outlook to stable from the negative ranking earlier. It also affirmed India’s Baa3 rating, signifying that the country has robust growth prospects and its economy is on its path to recovery after two years of uncertainty caused by the coronavirus outbreak.
In June 2020, roughly about 16 months ago, top rating agency Moody’s had decided to downgrade India’s outlook to the lowest investment grade of ratings, just above junk, in the wake of the economic downturn induced by the stringent lockdown restrictions imposed by the centre to ward off the threat of the coronavirus outbreak.
For an average patriotic Indian then, the economic slowdown did have an impact on their earnings, and therefore, the lowering of the country’s economic outlook, even though arrived at through a nebulous and esoteric process, evoked feelings of anxiety and concern.
Left-leaning “intellectuals” indulge in fearmongering after Moody’s lowered India’s rating in 2020
But for the usual suspects and the so-called left-leaning “intellectuals”, the demotion of India’s economic outlook by Moody’s was a political opportunity to mount an attack against their nemesis—the Modi government. A raft of left ideologues, whose pathological hatred for PM Modi has segued into their revulsion for India, resorted to maligning the Modi government for the gloomy economic condition in the country that they claimed had led Moody’s to downgrade its ratings.
Even though countries around the world were suffering from the economic slump as a result of the pandemic, the left-leaning “intellectuals” and opposition leaders took the opportunity to denigrate the Indian government and accuse them of mismanaging the economy amidst the raging COVID-19 outbreak.
The leader of the pack, senior Congress leader Rahul Gandhi, took to Twitter to berate the central government on the lowering of India’s rating by Moody’s. Several of his lickspittle and others who sympathised with the Congress party followed the suit and indulged in fear-mongering, asserting that the reduction of India’s ratings is a bellwether of the end of India’s growth story.
Their scaremongering is incomplete without the inclusion of the perceived persecution of Muslims by the central government. So, in their attempt to stoke fear psychosis among people who were already reeling under the economic shadow of the coronavirus outbreak, the left-leaning intellectuals and supporters declared that investors would shun India because of its mistreatment of Muslims and disastrous handling of the economy by the Modi government.
It was a classic left-leaning strategy of killing two birds with one stone. Use the lowering of India’s ratings to sow apprehensions about the country’s economy among anxious people and thereby discredit the Modi government and paint the Centre as inherently anti-Muslim so as to consolidate the Muslim vote bank against the BJP.
Some of them even tried to undercut the impact of a pandemic for Moody’s to demote India’s ratings. They claimed that India’s rating was lowered not because of the economic devastation caused by the pandemic but due to pre-existing problems like weak reforms, low growth for sustained periods and stress in financial sectors.
Except, it is not surprising since most of these who were gleefully sharing the downgrading of India’s ratings are the ones who have benefitted immensely from the (near) Communist Indian economy until the 90s. The system was working well, but only for them. The UPA era was the best for them, since as per some accounts, some ‘journalists’ were also able to fix cabinet berths and get their fancy interns introduced to the politicians through lobbyists.
Moody’s upgrades India’s ratings from negative to stable
However, sixteen months after the left-leaning intellectuals had prophesied that India’s economy was on a brink of an imminent collapse, the Moody’s Investors Services on Tuesday, October 5, upgraded the outlook on the Government of India’s rating from negative to stable. Moody’s also affirmed the country’s foreign currency and local currency long-term insurer ratings and local currency senior unsecured rating at Baa3.
The agency said the revision of India’s ratings from negative to stable reflects the view that the downside risks from negative feedback between the real economy and financial system are receding.
“Moody’s Investors Service has today changed the outlook on the Government of India’s ratings to stable from negative and affirmed the country’s foreign-currency and local-currency long-term issuer ratings and the local-currency senior unsecured rating at Baa3,” it said in a statement.
“With higher capital cushions and greater liquidity, banks and non-bank financial institutions pose a much lesser risk to the sovereign than Moody’s previously anticipated. And while risks stemming from a high debt burden and weak debt affordability remain, Moody’s expects that the economic environment will allow for a gradual reduction of the general government fiscal deficit over the next few years, preventing further deterioration of the sovereign credit profile,” the rating agency further added.
Moody’s said that after years of the NPA crisis in the Indian banking system, things have changed for the better.
“Solvency in the financial system has strengthened, improving credit conditions which we expect to be sustained as policy settings normalize. Bank provisioning has allowed for the gradual write-off of legacy problem assets over the past few years,” the report said, adding that banks have strengthened their capital positions, pointing to a stronger outlook for credit growth to support the economy.
Now that the Moody’s, which is considered as a holy grail of ratings by the Left in India, has elevated India’s rating, will those who misled the country’s population by peddling fake narratives and indulging in fear-mongering be gracious enough to accept their folly and laud the government for successfully finessing a once-in-a-lifetime crisis and bring the country’s economy back on track or will they continue to act like sore losers clenching their teeth and cursing the Moody’s for improving India’s ratings? The answer to this question is not very hard to guess.
