GET Stock QuotesNews18 APP
News18 English
»
1-min read

Arvind Subramanian Attacks Ratings Agencies Over 'Poor Standards'

"Before policy decisions, the expert analysis is often illuminating. But once the decisions are taken, it is truly striking how the tune and tone of the analysis changes. Analysts fall over backwards to rationalise the official decision," he said.

News18.com

Updated:May 11, 2017, 5:43 PM IST
facebookTwittergoogleskypewhatsapp
Arvind Subramanian Attacks Ratings Agencies Over 'Poor Standards'
Subramanian said there is a clear relationship between expert analysis and official decisions. (PTI)

New Delhi: India's chief economic advisor Arvind Subramanian on Thursday took to wordplay to slam global ratings agencies. He said they have “poor standards”, in an apparent dig at ratings agency Standard & Poor’s.

Subramanian said the credit ratings agencies are not upgrading India despite improvement in its economic fundamentals, PTI reported.

"The rating agencies have maintained India’s BBB rating, notwithstanding clear improvements in our economic fundamentals (such as inflation, growth, and current account performance). At the same time, China’s rating has actually been upgraded to AA-, even though its fundamentals have deteriorated," he said addressing the VKRV Memorial Lecture in Bengaluru.

India has been placed in the lowest investment grade by these agencies which leads to higher cost of borrowing in the global markets due to investor risk perceptions associated with it.

"The ratings agencies have been inconsistent in their treatment of China and India. Given this record—what we call Poor Standards—my question is: why do we take these rating analysts seriously at all?" he said.

Citing example of the sub-prime crisis, he said questions were raised about their role in certifying as AAA bundles of mortgage-backed securities that had toxic underlying assets in the US financial crisis of 2008.

Similarly, their value has been questioned in light of their failure to provide warnings in advance of financial crises, he added.

Subramanian said there is a clear relationship between expert analysis and official decisions.

"Before policy decisions, the expert analysis is often illuminating. But once the decisions are taken, it is truly striking how the tune and tone of the analysis changes. Analysts fall over backwards to rationalise the official decision," he said.

Last week, Economic Affairs Secretary Shaktikanta Das had also said that global rating agencies
are far detached from ground realities and must introspect as the reforms initiated certainly warranted an upgrade.

(With inputs from PTI)

Also Watch

Read full article
Next Story
Next Story
facebookTwittergoogleskypewhatsapp
Most Active
Company Price Change %Gain
Hindalco 264.75 +21.95 +9.04
Vedanta 311.70 +20.60 +7.08
TCS 3,191.15 +32.05 +1.01
Tata Steel 621.95 +20.35 +3.38
BPCL 376.55 -28.65 -7.07
Company Price Change %Gain
Hathway Cable 39.65 -0.65 -1.61
Maithan Alloys 882.00 +15.85 +1.83
HDFC 1,864.45 -12.15 -0.65
HDFC Life 503.15 +11.05 +2.25
Vakrangee 131.75 +6.10 +4.85
Top Gainers
Company Price Change %Gain
Hindalco 264.75 +21.95 +9.04
Vedanta 311.70 +20.60 +7.08
Tata Steel 621.95 +20.35 +3.38
Yes Bank 318.50 +8.95 +2.89
Bharti Airtel 395.35 +11.10 +2.89
Company Price Change %Gain
Tata Steel 620.55 +19.05 +3.17
Yes Bank 318.00 +8.75 +2.83
Bharti Airtel 394.95 +10.15 +2.64
Larsen 1,384.30 +23.65 +1.74
Power Grid Corp 208.20 +3.30 +1.61
Top Losers
Company Price Change %Gain
BPCL 376.55 -28.65 -7.07
HPCL 301.50 -18.10 -5.66
IOC 157.95 -7.00 -4.24
Titan Company 952.75 -24.35 -2.49
Axis Bank 512.90 -5.35 -1.03
Company Price Change %Gain
Axis Bank 513.50 -5.20 -1.00
Coal India 282.85 -2.20 -0.77
HDFC 1,864.45 -12.15 -0.65
Sun Pharma 508.80 -3.10 -0.61
IndusInd Bank 1,834.10 -10.55 -0.57