Rahul Gandhi May Disagree, But Moody’s Says DeMo Was A ‘Key Element’ Of Modi’s Reform Program

Global rating agency Moody's, which on Thursday raised India's sovereign credit rating to 'Baa2' from 'Baa3' for the first time in 13 years, has identified demonetisation of high-value currency notes announced in November 2016 as a key element of Prime Minister Narendra Modi’s economic reform program.

“Key elements of the reform program include the recently-introduced Goods and Services Tax which will, among other things, promote productivity by removing barriers to interstate trade; improvements to the monetary policy framework; measures to address the overhang of non-performing loans in the banking system; and measures such as demonetization.” the agency noted in its report.

This comes as a blow to the opposition, which has been dubbing demonetisation as a ‘disaster’ ahead of crucial assembly elections in Gujarat.

The United States-based agency also recognised ‘the Aadhaar system of biometric accounts and targeted delivery of benefits through the Direct Benefit Transfer (DBT) system’ as a key element of the reform program. These measures were intended to reduce informality in the economy, the agency’s report said.