{"id":33904,"date":"2018-10-30T14:54:11","date_gmt":"2018-10-30T09:24:11","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=33904"},"modified":"2018-10-30T14:54:11","modified_gmt":"2018-10-30T09:24:11","slug":"in-fact-ratings-upgrade-lifts-mood-but-key-economic-tasks-remain","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/in-fact-ratings-upgrade-lifts-mood-but-key-economic-tasks-remain\/","title":{"rendered":"In Fact: Ratings upgrade lifts mood, but key economic tasks remain"},"content":{"rendered":"<p><a href=\"http:\/\/indianexpress.com\/article\/explained\/moody-india-rating-yashwant-sinha-on-indian-economy-modi-government-arun-jaitley-4945346\/\"><span style=\"font-weight: 400;\">In Fact: Ratings upgrade lifts mood, but key economic tasks remain<\/span><\/a><span style=\"font-weight: 400;\">(Indian Express)<\/span><\/p>\n<p><b>Context:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Historically Global credit rating agency Standard &amp; Poor\u2019s and Moody\u2019s has not been soft on India, but recently India&#8217;s credit rating has been upgraded.<\/span><\/li>\n<\/ul>\n<p><b>What are the ratings based on?<\/b><\/p>\n<p><strong>The ratings are based on:<\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">economic growth and prospects;<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">the ability to repay debt obligations on time;<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">the level of public debt, especially compared to peers;<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">political stability which, in turn, is believed to have the potential to lead to economic and institutional reforms;<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">strength of the financial sector and banks;<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">monetary policy and the size of foreign exchange reserves, which determine the ability to repay foreign debt, etc. <\/span><\/li>\n<\/ul>\n<p><b>What are the resaons behind the degration of India\u2019s credit rating?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>As the size of the country\u2019s economy and its foreign exchange reserves have grown and many sectors have been deregulated<\/b><span style=\"font-weight: 400;\">, the reluctance of the agencies to raise India\u2019s credit rating has displeased successive governments.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>During the 2008 financial crisis<\/b><span style=\"font-weight: 400;\">, the agencies were widely criticised for failing to foresee the housing mortgage collapse which added to the distrust.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>As the agencies\u2019 credibility took a beating, and abundant capital flowed to emerging markets<\/b><span style=\"font-weight: 400;\">, actions taken by the raters were seen as having only limited impact.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>A disconnect has been visible between the ratings and the perception and investment behaviour<\/b><span style=\"font-weight: 400;\"> of foreign investors in Indian stocks and debt. <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The global ratings agencies have been <\/span><b>inconsistent in their treatment of China and India<\/b><span style=\"font-weight: 400;\">. <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The agencies have been <\/span><b>criticised for being detached from ground realities in India<\/b><span style=\"font-weight: 400;\">, and suggested that they introspect.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>In Fact: Ratings upgrade lifts mood, but key economic tasks remain(Indian Express) Context: Historically Global credit rating agency Standard &amp; Poor\u2019s and Moody\u2019s has not been soft on India, but recently India&#8217;s credit rating has been upgraded. What are the ratings based on? The ratings are based on: economic growth and prospects; the ability to&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/in-fact-ratings-upgrade-lifts-mood-but-key-economic-tasks-remain\/\">Continue reading <span class=\"screen-reader-text\">In Fact: Ratings upgrade lifts mood, but key economic tasks remain<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-33904","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704890042},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/33904","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=33904"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/33904\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=33904"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=33904"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=33904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}