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India and Rating Agencies: controversies and reality

India’s position has remained unchanged since long on the list of Big 3 Credit Rating Agency (CRA), viz. S & P, Moody’s and Fitch.

This reason given by these agencies are

  1. PCI of India shows little variation since long.
  2. Weak public finance
  3. High fiscal deficit


  1. PCI as a parameter is a very slow moving variable and so PCI as parameter for rating, drags Indian position.
  2. India’s fiscal management has improved gradually after 2011, but it is not reflected in CRAs ratings.


  1. Credit/GDP, a good indicator of credit efficiency, has not been taken into reckoning. China’s credit/ GDP ratio is much higher than that of India that indicates that
  • China needs more credit for the same growth in GDP as compared to India
  • It will lead to higher burden on future generation of China
  • It also indicates that China has neared its peak economic development.
  1. China’s growth slowed from over 10% to 6.5%, its rating remained unaltered while India maintained its growth trajectory during the same period.

The Big Three : 

  1. S & P
  2. Moody’s Investors Service
  3. Fitch

Indian Credit Rating Agencies registered with SEBI

  2. ICRA
  3. CARE
  4. SMERA
  5. Fitch (India)
  6. Brickwork Rating
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