India's Commerce Minister Piyush Goyal hit out at global ratings agencies during a London business conference. He slammed their methods,saying they don't capture India's economic might. But he praised CareEdge Ratings for being more objective on India's creditworthiness.
India's ratings from big names like S&P,Fitch, and Moody's sit just above junk. This scares off lenders worried about defaults. Ratings run from AAA down to D. Higher ratings mean cheaper borrowing; lower ratings hike risk and interest costs.
Even after some upgrades, like Moody's bump to Baa2 in 2017, India's ratings are still near investment grade's bottom. Goyal said agencies ignore India's growth story and economic strength. Finance Minister Nirmala Sitharaman has also pushed for rating reform.
Critics say these agencies lean too hard on subjective assessments. Quantitative metrics,where India shines,get sidelined. This imbalance questions fairness for world's fifth-largest economy.
The Economic Survey 2020-21,penned by former Chief Economic Adviser Krishnamurthy Subramanian, tackled this. He noted India never defaulted on sovereign debt,even in crises,proving its repayment commitment. He argued India's macroeconomic strength deserves a better rating .
CareEdge Ratings, India's first sovereign agency, better reflects country's economic truths. Its method favors quantitative over qualitative,with Economic Structure & Resilience and Fiscal Strength making up 50% of rating weight. This differs from big international agencies that miss India's unique economic picture.
As India deals with global rating challenges,discussions stress need for fairer approach to its potential...
