Chidambaram mocks Modi govt’s ‘sudden love’ for Moody’s
November 18, 2017
A day after Moody’s upgraded India’s sovereign rating to Baa2 from Baa3 with a stable outlook, former finance minister P Chidambaram on Saturday mocked the Narendra Modi-led central government’s sudden love for the global credit rating agency, saying that the present dispensation had flayed the rating methodology only a few months ago.
“Just some months ago, government had said the Moody’s methodology was all wrong… A long letter was written by Shaktikanta Das (ex-economic affairs secretary) questioning Moody’s ratings methodology, saying they’ve to revise their methodology as it’s all wonky,” Chidambaram said at the Tata Literature Live.
On Friday, Finance Minister Arun Jaitley had lauded India’s sovereign rating upgrade, saying it was a belated recognition of all the positive steps taken by India in the last few years. Addressing a press conference in New Delhi, Jaitley celebrated the announcement saying India got its upgrade after a long spell of 13 years.
“We welcome this upgrade, we believe that it is a belated recognition of all the positive steps which have been taken in India in the last few years.” The rating upgrade to Baa2 comes after a gap of 13 years -Moody’s had last upgraded India’s rating to ‘Baa3′ in 2004.
Ridiculing the way the Modi dispensation has reacted to the upward rating revision, Chidambaram recalled that for the government “Moody’s methodology was all wrong circa 2016”.
he senior Congress leader said the same agency and government had projected growth at 6.7 per cent for the current financial year. “It was 8 per cent in 2015-16, 7.1 per cent in 2016-17 and will be 6.7 per cent in 2017-18. Is that North or South, you conclude,” he said.
Sovereign rating is issued to national governments and a barometer of the country’s investment climate. It gives investors insight into the level of risks, including political, associated with investing in a particular country.
The credit rating agencies’ decision underpinned the expectation that continued progress on economic and institutional reforms will, over time, enhance India’s high growth potential and its large and stable financing base for government debt. It will also contribute to a gradual decline in general government debt burden over the medium term, it said.(Agencies)
