New Delhi, India, September 2 (ANI): Former 15th Finance Commission Chairman NK Singh on Wednesday called the upgrade of India’s sovereign rating by Japan Credit Rating Agency (JCRA) a “magical moment” and also emphasized the “robustness” of India’s new GDP methodology.
“The A-rating upgrade by the Japanese Credit Rating Agency is a magical moment for India and calls for celebration. We need to applaud the robustness of the new GDP methodology,” Singh said in a post on X.
JCRA upgraded India’s foreign currency and local currency long-term issuer ratings by one notch to A- from BBB+, with a stable outlook.
Singh also defended the changes made under the new GDP series, saying changes in base years are routinely undertaken globally to capture changes in economic structures.
“Base years are changed regularly worldwide to reflect changing realities and economic structures. They do ‘not represent a downward revision made to make the current year’s growth appear higher.’ Any such attribution reflects prejudice, bias and a lack of understanding,” he said.
He added that mechanically comparing the new GDP series with the old series amounted to an “apples-to-oranges” comparison and said the new series was more robust and aligned with global SNA 2008 standards.
Commenting on the rating upgrade, Manoranjan Sharma, Chief Economist at Infomerics Ratings, said the decision was in line with expectations and had been overdue.
“This decision was long overdue. In fact, we had placed our views in the public domain for the last three, four years. And we have been consistently making a case of India sovereign rating upgrade for quite some time,” Sharma told ANI.
He said India’s sustained economic growth, robust private consumption and public investment, reforms such as digital public infrastructure and GST, and improvement in the banking system were among the major factors behind the upgrade.
Sharma also highlighted the decline in gross non-performing assets, the impact of the Insolvency and Bankruptcy Code and stronger financial supervision by the Reserve Bank of India.
“This will strengthen investor confidence and enhance India’s credibility among global investors and lenders,” Sharma said, adding that the upgrade could also help lower external borrowing costs for both the sovereign and Indian companies.
JCRA, while announcing the upgrade, said India had maintained a high economic growth rate of around 7 percent, supported by strong private consumption and public investment.
The agency said the government had steadily implemented policies conducive to productivity growth and economic development, including digital public infrastructure and the implementation of the Goods and Services Tax.
It also noted that the gross non-performing loan ratio in the banking sector declined to 1.8 percent at the end of March 2026, supported by the Insolvency and Bankruptcy Code, government capital injections and stronger RBI supervision.
JCRA said India’s economy grew 7.7 percent in real terms in FY2026 and expects the country to maintain growth of more than 6 percent in FY2027.
On government finances, the agency noted that the Centre reduced its fiscal deficit to 4.4 percent of GDP in FY2026 from 4.7 percent in the previous fiscal year while maintaining a high level of capital expenditure.
JCRA also said India’s ample foreign exchange reserves, which significantly exceed its short-term external debt, provide strong resilience against external shocks. (ANI)
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