Developing countries including India need to make a strong case for credit ratings upgrade and ensure that their voice is heard by the global agencies, said NDB President KV Kamath.
He also said that work is underway on setting up a credit ratings agency on the BRICS grouping (Brazil, Russia, India, China and South Africa) but its utility would depend upon the way its ratings are accepted globally.
India has often criticised methodology used by rating agencies like Moody’s and S&P which have pegged the country’s rating at a lower level at BBB-, despite dramatic improvement in growth and macro-economic stability since 2014.
“We (India) should make a strong case (for rating upgrade). The developing countries will have to make a strong case for where they are and how they should be looked at.
“...in our context, the BRICS need to ensure that our voice is heard. So there is a case for a strong statement to be made individually or jointly in the this context,” he told PTI.
Last year, BRICS agreed to set up an independent ratings agency based on market-oriented principles saying it would further strengthen global governance architecture.
In case of India, rating agencies have cited concerns over the country’s debt levels and fragile banks in their refusal for an upgrade.
The government feels the agencies have not accounted for a steady decline in the India’s debt burden in recent years and have ignored its levels of development when assessing their fiscal strength.
Kamath, the first head of the Shanghai-based multilateral lending institution New Development Bank (NDB) set up by BRICS nations, was here in connection with the second annual meeting of NDB.