The Indian government is in talks with credit rating agencies to revise the methodology used for assessing governance, Finance Secretary Ajay Seth said on Monday. This move comes amid efforts to secure better sovereign ratings for India by addressing concerns raised by global agencies.
Seth emphasized that India has been consistently engaging with the agencies to convey the country’s governance progress. “We have had several rounds of discussions. The process is on to bring about change in governance assessment methodology,” Seth told reporters.
Global rating agencies like S&P, Moody’s, and Fitch currently assign India a sovereign rating at the lowest investment grade, with a stable outlook. The government has long argued that these ratings do not reflect India’s strong macroeconomic fundamentals, large and diverse economy, or its robust financial system.
Seth further noted that while India’s economic growth and fiscal indicators have improved significantly, governance-related parameters often weigh down the country’s ratings. The government is hopeful that a revision in the governance assessment framework will better capture India’s institutional strengths and ongoing reforms.
Economists and market experts have welcomed the government’s move, noting that a better rating can lower borrowing costs for the country and attract more foreign investment.
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