 "India needs a world class Indian credit rating agency, Piyush Goyal explains why")
Union Commerce and Industry Minister Piyush Goyal on Tuesday said that India needs a world-class credit rating institution within the country.
Goyal said that an Indian credit rating agency was needed as India’s rating was not upgraded for a long time by global rating agencies despite strong fundamentals. He added that credit ratings have an important role to play in the cycle of growth.
“As we move towards Viksit Bharat 2047, let’s aim for our own robust credible world class rating institution from India,” said Goyal, according to PTI.
A credit rating agency evaluates the creditworthiness of a borrower that could range from a government to a private corporation or even a financial instrument like a bond. The most well-known credit rating agencies are Moody’s, Fitch Ratings, and S&P.
In recent time, India's credit rating has been upgraded by some agencies.
Goyal said that investors look at credit ratings that the agency gives and raise investments depending on these ratings.,
With raising credit rating, you also raise business confidence that business confidence will lead both to capital flows and debt flows, said Goyal.
‘Banks look up to ratings as an important criteria. Credit is extended, entrepreneurs or businesses take bigger and bolder bets with the confidence that they have received from the ratings and jobs are created," said Goyal.
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View AllSmall disturbances or changes in the Indian economy are very often exaggerated by some of the rating agencies, Goyal alleged.
“The distress signals that they give are disproportionate to what the reality is, and that’s where I would urge CareEdge also to play a responsible role, to help investors, bankers,” Goyal claimed
As a result, Goyal said he has urged his team to give prominence to ratings done by “Swadeshi” rating agencies.
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