S&P's revised India rating to drive investment: PMEAC
Global ratings major Standard & Poor's (S&P) has revised upward the ratings outlook for India to 'stable' from 'negative'. According to the Prime Minister's advisory panel the upward revision of the country's rating outlook to stable would foster investment inflows.
According to Prime Minster's Economic Advisory Council (PMEAC) Chairman, Dr C Rangarajan, the improvement in the outlook assigned by S&P will make the country a better investment destination.
He added that the improvement in S&P rating comes on the back of fiscal consolidation indicated in the budget, which will lead to substantial reduction in fiscal deficit for the next year.
The Planning Commission Deputy Chairman Mr Montek Singh Ahluwalia also commended the S&P ratings outlook.
Source: IBEF
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I am not a very big fan of ratings. These are based on a lot of data and quite often do not take into account softer aspects about a country's economic structure.
Here is a paradox- Obviously, ratings are based on data. Change is a rating reflects change in the base data right? A new rating becomes redundant if-
1. The data is not reflective of the actual potential of an economy
2. The data numbers are not readily updated or available. In other words, there is a lag in the generation of data points
3. Data numbers, although available, are not completely accurate as the input data points are inaccurate or not available in a short period of time
Given that data does not reflect true potential of an economy(this is true for any and every rating) and most of these data points are not completely accurate in the short term (yes, I can confidently say that this is true in case of India. Remember the sugar production number controversy?), how relevant these ratings are in the short term?
Sunday, March 21, 2010
Personal update
Hey guys...I know I have not been regular with my blog writing. Have not been keeping that well + had lots of stuff at work.
But I promise to improve on my irregularity :)
But I promise to improve on my irregularity :)
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