He said India has taken reform initiatives like FDI liberalisation, bankruptcy code, monetary policy framework agreement, GST and Aadhaar Bill.
Chief Economic Advisor Arvind Subramanian today slammed global rating agencies for following "inconsistent" standards while rating India vis-a-vis China, saying they have not taken into account reforms measures like GST, which is a "poor" reflection on their credibility.
He said India has taken reform initiatives like FDI liberalisation, bankruptcy code, monetary policy framework agreement, GST and Aadhaar Bill.
"Despite all these achievements, it is very interesting that the rating agencies have not reflected this... We have shown (in Survey) what kind of inconsistent standards the rating agencies have.
"We call these poor standards because S&P said last year that there is no way they could upgrade India because of GDP and fiscal deficit," Subramanian said.
US-based Standard & Poor's (S&P) in November ruled out an upgrade in the country's rating for some considerable period, citing India's low per capita GDP and relatively high fiscal deficit.
"The actual methodology to arrive at this rating was clearly more complex. Even so, it is worth asking: are these variables the right key for assessing India's risk of default?" the Economic Survey asked.
India's government debt to GDP ratio stands at 68.5 per cent.
Subramanian said S&P has rated China six grades above India and has held China's ratings steady since 2010 despite economic growth slowing to 6.5 per cent from 10 per cent.
In contrast, India's has moved in opposite direction and growth has increased.
"Yet how did the rating agencies behave? They despite all these risky developments they did not downgrade China and our rating was maintained six notches below China. This is reflection on how these institutions work. You should question them," he said.
The pre-budget Economic Survey said S&P in December 2010 increased China's rating from A+ to AA and despite the "ominous scissors pattern" of Chinese economy, and declining growth has not downgraded it.
"In contrast, India's ratings have remained stuck at the much lower level of BBB-, despite the country s dramatic improvement in growth and macro-economic stability since 2014.
These contrasting experiences raise a question: can they really be explained by an economically sound methodology?," the Survey said. (MORE)
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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