Arvind Subramanian takes dig at rating agencies: They have 'Poor Standards'

NEW DELHI: India's chief economic advisor

Arvind Subramanian

today made a nice play on words to slam ratings agencies. He said they have "Poor Standards" playing on the name of ratings agency Standard & Poor's.

Subramanian slammed them for not upgrading India "despite clear improvements in economic fundamentals", reported PTI.

"In other words, 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 added to PTI.

Subramanian today didn't name names, but earlier this month, US-based agency

Fitch

kept India's sovereign rating at 'BBB-' - it's a rating India was assigned more than a decade ago, PTI reported earlier this month.

"In recent years,

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,"the

CEA

said.

He expressed annoyance at what he said is this differing treatment meted out to India as compared with China.

"Rating agencies are inconsistent in their treatment of China and India," Subramanian added to PTI.

The government's '

Economic Survey 2017

' too slammed the agencies for following "inconsistent" standards while rating India vis-a-vis China. It said these agencies didn't take into account reforms measures like the Goods and Services Taxes (GST) Bill. The Survey said it was a "poor" reflection of rating agencies' credibility.

'BBB-' is the lowest 'investment grade with stable outlook'. Fitch had last upgraded India's sovereign rating from BB+ to BBB- with stable outlook on August 1, 2006. Later, it changed the outlook to negative in 2012 and then again to stable in the following year, though it kept the rating unchanged at the lowest investment grade.

The leading rating agency said it expects India's growth rate to increase to 7.7 per cent in fiscals 2017 and 2018, from 7.1 per cent in fiscal 2016.

The NDA-government has been consistently rolling out its ambitious reform agenda for almost three years and remains committed to continued reforms, the New York headquartered agency said.

"The impact of the reform programme on investment and real GDP growth will depend on how it is implemented and the extent to which government continues its strong drive to improve the still-weak business environment," the agency said.