India to Press for New Credit Ratings
23 July 2013
New Delhi: Indian government has constituted a high level committee comprising of officials from FinMin and Planning Commission to persuade global rating majors like S&P, Fitch and Moody’s to devise a new ratings system.
Currently the lowest rating these agencies have is BBB- (In case of S&P and Fitch) and Baa3 in case of Moody’s, followed by CCC, CC, C and D ratings, all considered “Extremely Speculative” and prone to default.
This is followed by “C” meaning “Currently highly vulnerable” and “D” meaning “Payment default on financial commitments”.
Now the government wants them to introduce new ratings like E, EE, EEE, F, FF, FFF, GGG all the way to ZZZ.
“The idea is that the general public gets a realistic picture,” said Arvind Mayaram, Secretary, Department of Economic Affairs, commenting on the subject. “Right now most people reading about these ratings are confused. They don’t understand that how the whole thing finishes at B level. They know that English Alphabets go all the way up to Z, and hence expect some series to be over only when Z comes along.”
“We are in fact trying to convince the rating agencies about that there should be ratings like E, EE, EEE, EEE-, EEE-- and so on.” Said Mr. Montek Singh Ahluwalia, DC, Planning Commission.
But wouldn’t it be better that the government was focussing at tackling fundamental issues that plague the economy, and take tough decisions like curtailing subsidy on fertilisers and diesel and reigning in the fiscal deficit to less than 5% in the current financial year, which will automatically take care of ratings in the long run? Asked the Funnynomics correspondent.
“We are already doing that…allowing FDI in multi-brand retail, aviation, mega projects; capping LPG subsidy, partial decontrol of diesel..all those things.” Replied Mr. Ahluwalia. “But as you know..those steps take lot of time and need wholesome cooperation from the Opposition parties, whereas this is something immediate…And what we need now is something to be done fast.”
The news made immediate impact. Within a few hours prominent news channels had lapped up the story well. Many had invited Kindergarten teachers to explain how people naturally expected alphabets E, F, G, H to follow A, B, C, D and how it was painful for someone to see everything collapse after B.
The BSE index meanwhile reacted positively to the report, climbing up a full 430 points. An analyst with a prominent brokerage said the market has liked the government approach to these ratings. “If we can’t improve our ratings…at least we are now trying to make them look less dirty…some useless action is better than no action at all..no wonder the market is rallying.”
Meanwhile BJP rubbished the move. “We don’t agree with the proposed ratings…If we were in the driving seat, we will persuade them to do away totally with English alphabets and switch to Hindi ones,” said senior BJP leader Sushma Swaraj. “This will give us many more intermediate layers to chose from…remember Hindi has many more alphabets than English.”
Shiv Sena in Mumbai said that rating agencies seem to be working under the guidance of ISI. “Every now and then they lower our ratings. This is an attack on our sovereignty; that’s why we have decided that we will not allow any rating agencies to rate Shiv Sena.”
However noted economist Amartya Sen endorsed the move. “I am sad to see people getting confused…children are beginning to think English alphabets genuinely end at B…this will obviously harm them in the long run as they will not be able to fabricate sufficient SMS messages when they grow up… I think the ratings must be changed…I consider the ratings change as pro-poor.”
(Disclaimer: This news report is pure fiction, a produce of fertile imagination, and none of the people, organisations, NGO, politicians, office bearers, or government officials mentioned on this page have anything to do with this topic, subject or report. Entire fabrication is meant for simple fun.)
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