It's been a fantastic year for Modi government: Jim O'Neill

NEW DELHI: Stating that he wasn't surprised by the recent outlook upgrade for India by Moody's, Jim O'Neill, Former Chairman of Goldman Sachs AM told ET Now, "Rating agencies tend to follow what the markets have already priced in."

Asked about the government's first year in office, O'Neill said, "This has been a fantastic year for the Modi government. However, it will be difficult for the government to continuously surprise markets."

Lesser external vulnerabilities, plunging crude oil prices and above all Prime Minister Narendra Modi-led government's reforms drive have led most global institutions such as IMF, Moody's and World Bank to lift their economic growth outlook for the Indian economy.

Jim Walker, among the first strategists to get bullish on India 18 months ago, predicted that economic revival would gather steam on the back of a turnaround in corporate earnings, followed by a rise in investment. And, for anyone with a 3-10 year investment horizon, "India should be your No. 1 priority," said the Asianomics founder and former CLSA chief economist in an interview to ET.

At the same time, he was caustic about RBI not cutting rates. “Recoveries are profit-led, not investment-led,” he said. “Investment activity is the natural consequence of companies and entrepreneurs spotting and realising profitable opportunities. Governments and central banks can facilitate improved profit outlooks but they cannot create them artificially.”

Although Walker put himself on the side of the sceptics regarding the latest GDP series, which reflects faster growth than previously estimated, companies are set to do better than before.

(With inputs from ET Bureau)