S&P raised India's rating from 'stable' to 'positive', said this on the expenditure on infrastructure

S&P Global Rating has raised India's credit (rating) outlook from 'stable' to 'positive'. Along with this, the rating has been maintained at 'BBB-' on the basis of strong growth and better quality of government expenditure.

S&P said that if India adopts cautious fiscal and monetary policy which reduces the increased debt and interest burden of the government and increases economic resilience, then it can increase India's credit in the next two years.

S&P said, "The positive scenario is consistent with our view that continued policy stability, deeper economic reforms, and more investment in infrastructure will maintain long-term growth prospects."

S&P has revised the outlook for India from 'stable' to 'positive'. It has also affirmed 'BBB-' long-term and 'A-3' short-term foreign and local currency sovereign credit ratings. 'BBB-' is the lowest investment grade rating. The agency last changed the rating outlook from 'negative' to 'stable' in 2010.

The US agency stated that rating improvements are possible if India's fiscal deficit narrows considerably and, as a result, the country's total public debt falls below 7% of GDP on a structural basis.

India's investment grade rating is the lowest among the three major global rating agencies, S&P, Fitch, and Moody's. On the other hand, the ratings outlooks from Fitch and Moody's remain "stable." These ratings influence borrowing costs and are seen by investors as an indicator of a nation's creditworthiness.