India’s chief economic advisor Arvind Subramanian today lashed out at the functioning of the rating agencies in India for keeping India at a lower rating than China.
Playing on the name of S&P rating agency that was earlier known as Standard & Poor’s, he said the rating agencies have “Poor Standards” and blamed them for not upgrading India “despite clear improvements in economic fundamentals”.
“The ratings agencies have been inconsistent in their treatment of China and India… my question is: why do we take these rating analysts seriously at all?,” he told PTI.
Last week, US-based agency Fitch retained India’s sovereign rating at ‘BBB-‘, which has been the same for more than a decade. “In recent years, rating agencies have maintained India’s BBB- rating, notwithstanding clear improvements in our economic fundamentals. At the same time, China’s rating has actually been upgraded to AA-, even though its fundamentals have deteriorated,” said Subramian.
‘BBB-‘ is the lowest ‘investment grade with stable outlook’ and Fitch had given it for India’s sovereign rating from BB+ to BBB- with stable outlook in August 2006. Later, it changed the outlook to negative in 2012 but brought it back to stable in 2013.