Too little, too late

Rating agencies remind you of cops in movies who turn up at the end when the the hero has rescued the damsel, the villains have been bashed up, misunderstandings have been sorted out and long-lost siblings have found each other. Everyone knows the men in khaki will be too late. If they aren’t, that is a a twist of sorts in the tale. Typically, the audience has already begun heading for the exit when the sirens announce their arrival.

The revision of India’s sovereign rating by Moody’srecently seems very much like the behaviour of the men in filmy khaki. The whole world has been screaming itself hoarse for the past two years that India is reforming; that it is an oasis in a sea of economies going through a difficult time and is the place to be to be part of the growth story. Most would also agree that the Government is working seriously towards improving the quality of expenditure, keeping a check on fiscal deficit and undertaking a number of difficult reforms. And yet, Moody’s and other rating agencies reacted with the glacial indifference that men in khaki reserve for the hero who confronts them with evidence of wrongdoing on the part of the baddies. Not good enough was their stern answer.

A peeved government sent a strong response earlier this year, from the then finance secretary and chief economic advisor through his Economic Survey , which highlighted what appeared to be double standards in judging the performance of countries. At long last, Moody’s yielded and upped us one notch in a long ladder of rankings last week. But hasn’t the upgrade come a tad late? Perhaps just when the tide has already begun to turn, with a slowdown under way, oil prices high and current account deficit no longer in the comfort zone? Rating agencies do move in mysterious ways, their wonders to perform.

Associate Editor

COMMENT NOW