Rating agencies should consider upgrading India as the country's inclusion in the JPMorgan Emerging Markets Bond index was not due to government intervention or concessions, according to Neelkanth Mishra, chief economist at Axis Bank Ltd.
Instead, it was driven by global bond investors expressing a desire for India's inclusion. Mishra emphasised the importance of sending a strong signal, demonstrating commitment and discipline, as this tends to elicit a positive response from the market.
Private sector demand has begun to pick up, surpassing market expectations, with a remarkable commitment to fiscal consolidation. Markets may not have fully incorporated the implications of this surge in private sector engagement, he told NDTV Profit's Niraj Shah.
The interim budget was a vote on account with limited new policies or tax rate adjustments. Despite this, the government's fiscal message was powerful, emphasising a strong fiscal stance rather than introducing numerous new initiatives, Mishra said.
The government is reacting positively to plans for more spending and the real estate market bouncing back. They're allowing more borrowing and using domestic savings to support these efforts, according to him.
In terms of sustainability of medium-term growth, Mishra found this interim budget phenomenal. It indicates that the government is actively aiming for macroeconomic stability, ensuring predictability in interest rates, exchange rates, and overall growth, he said.
This approach speaks volumes about the government's commitment to fostering a stable economic environment, Mishra said.
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