"Why follow the West?" India takes offence at the posture taken by sovereign credit rating agencies.
By the end of 2023, an Indian agency will be the first to assign sovereign ratings to the nations of the globe.
CareEdge Ratings, one of India's most prominent rating agencies, launched the Sovereign Risk Assessment Framework on Monday (7 August). This framework will evaluate countries based on five key pillars: economic structure, fiscal strength, external linkages, monetary and financial stability, and institutions and quality of governance.
Sanjeev Sanyal, a member of the Prime Minister's Economic Advisory Council, stated at the launch of the Sovereign Risk Assessment framework, "With the growing importance of emerging economies in the global landscape, it is important to understand the nuances of these countries when conducting the sovereign credit assessment."
"I am pleased that CareEdge, one of India's premier rating agencies, has developed a comprehensive framework for assessing sovereign risk. The purpose of any sovereign risk assessment should be the ability to accurately assess a country's creditworthiness, and I believe CareEdge, with its extensive experience in the ratings industry, is well-equipped to meet this challenge," he said.
Sanyal added that India should no longer be required to adhere to criteria that are determined by third parties and in which the country has no say.
"An Indian rating agency will assign sovereign ratings to the remainder of the world for the very first time... As a rising economic power, it is essential for us to develop this habit. It's time for us to gain the confidence to deconstruct the rest of the world on our own terms, said Sanyal, according to the PTI news agency.
In addition to medical benchmarks and Environmental, Social, and Governance (ESG) standards, the EAC-PM member stated that India must establish global norms in a variety of other disciplines.
PTI quoted Sanyal as saying, "Our political leadership is visible, but we need to create more institutional systems, such as our own ESG norms, sovereign ratings, and global benchmarks for technology and regulations."
According to the report, the agency is anticipated to begin publishing sovereign ratings for individual nations by the end of 2023, pending requisite statutory approvals.
"You can critique the methodology, and the rest of the world can examine it and inform us where we can make improvements... Over time, it will hopefully be adopted by the global community; we will have a significant say in how the world perceives itself," Sanyal said.