In spite of all these so called developments in India, why is our sovereign rating not improving?
“Global rating agency Fitch Ratings has affirmed India’s sovereign rating at ‘BBB-’ with a stable outlook on the back of a robust growth outlook and resilient external finances. The agency forecast India to be the fastest-growing economy in FY24”
Because the state governments are still not caring about the financial health of their coffers. They’re busy giving out freebies. Only the Central government is caring about fiscal discipline.
The biggest farce in the world are these Ratings.
I want to ask, how many times has India ever defaulted on its dues - None.
How many times, has a user made use of these guys ratings to do investment. For mega institutions, they feel that the company should have some kind of ratings before they can even think of investments and these guys make use of this. This is the only purpose that various insitutions and government included allow these guys to rate them.
At a micro level, the rating agencies in India on Corporates, all fell flat when they rated IL&FS and DHFL
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Until July, India’s credit rating companies had investment grade ratings on billions of dollars of corporate debt raised by the IL&FS Group and its subsidiaries. Credit rating companies had investment grade ratings.
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Has a retail investor ever got the benefit of these ratings. None. In fact they should be sued for not identifying the issues and downgrading these companies.
Even retail investors before investing in bonds, look at ratings and think it is great. Is it really so. How many do follow up on the ratings subsequently.
The problem is a country cannot be without ratings as well, FDI and others base their investment on these guys ratings.
Hence in my view, this is a money making farce. No accountability No responsibility. Once an event happens, they will then come out with a revised ratings. Similar to auditors. Never seen or heard the auditors of DHFL, Yes Bank and countless co-op banks who got wound up being held accountable.
What would be credit suisse rating before its downfall
The Big Short - Ratings Agency
Interesting discussion on this subject by Capitalmind
