Patna : I came across an article written by Mr. Chetan Bhagat today. This article titled “To fix economy, change mindset: Moody’s and other assessments of India’s economic outlook must set alarm bells ringing” was carried out by the Times of India, Patna Edition, on , June 6, 2020.
Mr. Chetan Bhagat opens his article by stating : “This week, international ratings agency Moody’s downgraded India’s sovereign debt ratings and made the outlook negative. The same agency had upgraded India’s ratings in 2017. The government had highlighted this achievement back then. This time, the downgrade met with radio silence……”
The downgrade comes as no surprise to Mr. Bhagat. He continues,“……Moody’s assessment is no surprise. It is another piece of evidence that our economy is in bad shape, and not just due to the coronavirus. “
This set me thinking. How far can these Rating Agencies go in the name of Rating??? If what Mr. Chetan Bhagat has quoted is correct and if Moody’s has actually said that “Governance is material to India’s credit profile and a material factor in today’s downgrade”, does it amount to crossing the limit ?
Till now we had been told and taught that the governance of a sovereign nation is its internal matter and no other nation or agency has any right to lecture that particular sovereign nation on its quality of governance. Isn’t it surprising then that these non-state actors, in the garb of credit rating, are arrogating to themselves the right to authoritatively comment upon the quality of governance of sovereign nations ? And most surprisingly, in the case of a large democratic nation like India, to pompously pronounce the judgment also: That Governance has failed in India !
When any other country or even any multilateral agency tries to interfere in the internal affairs of our country (for example : Jammu and Kashmir or abrogation of Article 370 etc.) we tell them very firmly that this is an area which is out of bounds for them. India, as a nation, does not comment upon the internal governance of other countries.
I am aghast to see that a columnist of the repute and stature of Mr. Chetan Bhagat has not only failed to protest against this misadventure by Moody’s, but has gone on to wholeheartedly support that analysis which is beyond the purview of a mere Rating Agency.
Who gave the authority to Moody’s to decisively proclaim that the deterioration in the quality of governance in India is a material factor in its downgrade of the sovereign rating of India ?
There is a theory of the “Incremental Nibble”. The practitioners of this theory nibble at anything belonging to others – it may be the boundary of your field, it may be your standard of living, it may be your confidence or your performance, it may be your knowledge – anything under the sun.
The first nibble is made in such a manner that the victim is not even aware that something belonging to him has been nibbled at. But a few others may notice it. Once the first nibble goes unnoticed by the victim, the practitioner of the theory of the incremental nibble makes the second nibble. Even that goes unnoticed by the victim because the first and the second nibbles are so insignificant that the victim does not pay any attention. However, a few watchers of the nibbles do notice. Emboldened by this failure of the victim to notice the nibbles, the practitioner of the incremental nibble makes the third, fourth, fifth and subsequent nibbles. It is done very carefully so that the victim does not realise in the beginning but others watching the spectacle are fully aware of it. That is the intention of the practitioner of the incremental nibble also. He does not want the victim to take notice and protest at the first nibble – rather he wants others to have a feeling that the nibble is taking place in the full knowledge of, and with the consent of, the victim. This provides initial legitimacy to the illegitimate act of nibbling.
After a few nibbles, the practitioner of the incremental nibble has gained legitimacy in the eyes of the parties witnessing that act. They think that all this is happening with the consent of the victim. The victim has to be alert right from the beginning. If he unfortunately missed to take notice of the first or the second nibble, he has to vociferously protest and come back hard at the practitioner of the incremental nibble whenever he becomes aware that his property, confidence, credibility or any important thing has been nibbled at with a view to sanctify or glorify the nibble.
(Note :- This is the first part of my write-up on this topic.