In a Moody's to celebrate..?

Which political party  would give up the opportunity to capitalize on any scrap of positive "data" More so during election time? Mercifully, the pink dailies were more sober in their reaction to Indias sovereign debt rating by Moodys  ..

The moot question is how does it impact us , the common folk ? Would prices fall, would income disparity reduce, would jobs increase? The manner in which political parties claimed credit on all these fronts on the back of the rating is unfortunate. The simple fact is that sovereign ratings are just pointers to lenders to "assist" in their decision to extend loans  to Corporates. Country to country grants ( which are few and far between) and World Bank/IMF bailouts do not need these ratings.

Let us not forget that the lender too is in the marketplace and has to compete. Any lender , if convinced of the merits of the case, would use the rating only as a bargaining chip when it comes to fixing interest rates and tenures. He keeps looking over his shoulder at the other lender in the queue. No Indian Corporate with a good proposition has failed to tap the international markets . On the other hand an excellently managed Corporate like HDFC Bank is rated below Citibank, solely on account of its location.

Our economy needs far more scrutiny on its performance then a Corporate centric  rating from a "for profit' body. It needs other metrics , like the progress on alleviating unemployment, reducing prices of common consumables, improving access to health care, and  education to name a few. It's not time yet for our mood to turn positive on any of these fronts. Our much publicized growth rates, despite the so called 'trickle down" effect , is only widening the gap between the rich and the underpriveleged.   
   
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25NOV17