Former finance minister P Chidambaram ridiculed the Government's newfound love for Moody's, after the agency upgraded India's credit rating to 'stable'. Joining Chidambaram in his critique were former prime minister Manmohan Singh, and senior Congress leader Kapil Sibal.
Just in 2016, the government had said the Moody’s methodology was all wrong. A long letter was written by ex-economic affairs secretary Shaktikanta Das questioning Moody’s ratings methodology, saying they have to revise their methodology as it’s all wonky.P Chidambaram, Former Finance Minister
Moody's upgraded the sovereign ratings by a notch to Baa2, citing the Modi government's reform programmes and higher growth prospectus. The US-based agency upped India's rating to Baa2 from Baa3 and also changed its rating outlook to 'stable' from 'positive'.
Chidambaram went on to explain, with data, why the reality may be a world apart from the picture presented to the people.
He pointed out how the growth rate has fallen progressively since 2015.
"It was 8 percent in 2015-16, 7.1 percent in 2016-17 and will be 6.7 percent in 2017-18. Is that North or South, you conclude," he said.
Chidambaram mentioned three key indicators – gross fixed capital formation and within that private sector investment, credit growth, especially for small businesses, and jobs – which are critical to assess the health of an economy.
"But the dashboard is flashing red on all these three indicators," he added.
Former prime minister Manmohan Singh said that the NDA government shouldn't be lured into the false belief that the economy is out of the woods.
I am glad that Moody’s has done what they have done but we must not be, I think, lured into false belief that we are out of the woods.
"US credit rating agency Moody's upgrade of India's credit ranking is in sharp contrast with the mood of the people,” Congress leader Kapil Sibal said.
Without naming the government, Sibal said it should worry about the "loss of livelihood of millions" during its tenure rather than basking in the glory of the upgrade.
The comments came after Finance Minister Arun Jaitley termed Moody's upgrading India's sovereign rating after 13 years as "belated recognition" of reforms undertaken.
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