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"It's a welcome development, but we also feel it was long overdue... it's a recognition of the actions that the government has undertaken like GST, bankruptcy. We also need to keep all these things in perspective," Chief Economic Adviser Arvind Subramanian said.
The government, he said, "is going to do what it has to do on the domestic front -- employment growth, economic growth, reviving investment," he told reporters here.
Asked if he expects other agencies like S&P and Fitch to upgrade, he said: "Let's hope they are not inconsistent amongst each other."
Subramanian had earlier observed that rating agencies follow inconsistent policies while rating India and China.
Economic Affairs Secretary Subhash Chandra Garg said the upgrade is definitely a big vindication of the structural and institutional reforms that India is doing.
"The fiscal deficit consolidation, debt control and all so everything which the government has done in the past couple of years have been recognised. They are projecting a little rise in the trajectory going forward, so they are conscious of the real dynamics of the debt situation. We, of course, remain committed to the fiscal path," Garg said.
Asked if the government will keep in mind the rating while reviewing fiscal deficit target next month, Subramanian said: "Government policies are dictated by what we have to do in terms of our own objectives, macroeconomic reforms and reviving growth."
Finance Secretary Hasmukh Adhia also said the path that the government has chosen for long-term reforms and fiscal consolidation is well recognised by investors already.
"The rating agency too has now confirmed it formally, which is welcome," Adhia said.
According to Subramanian, the upgrade is a recognition of reforms like GST, the bank recapitalisation plan, the bankruptcy code and macroeconomic stability.