Moody's boost to Modi: Should India really cheer?

India's rating upgrade still retains its credit risk as moderate and obliges it to remain fiscally prudent, usher in more reforms and be wary of external shocks

The Narendra Modi government is celebrating the upgrade of India’s sovereign credit rating by Moody’s Investors Service. The new rating places India at Baa2, up a notch from Baa3. The outlook has also been raised from positive to stable, while other ratings including the one for short-term local currency have seen an upgrade by a notch each.
 
It is important to place Moody’s action in perspective and understand what this upgrade actually means. Also, what all should the government be wary about to maintain the newly acquired rating and even improve it further in the coming years?
 
India’s