The Telegraph
Thursday , November 5 , 2015
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Touchy lies the head...

New Delhi, Nov. 4: The Narendra Modi government revealed today just how touchy it has become about any sort of criticism when it put out a note slamming the media for playing up "the personal views of a junior associate economist employed with Moody's Analytics" to "buttress a narrative that it wants to portray".

Last Saturday, Faraz Syed of Moody's Analytics had said: "Modi must keep his members (of his party) in check or risk losing domestic and global credibility."

Syed's note, which came in the middle of the Bihar elections, cast doubts about the government's ability to deliver on promised reforms in order to achieve its potential growth rate of 9 to 10 per cent. India's GDP growth rate slowed to 7 per cent in the first quarter ended June 30, down from 7.5 per cent in the previous quarter.

The government's note flayed the media for failing to mention the "difference between Moody's Analytics and Moody's Investors Service".

Moody's Investors Service carries greater clout as it provides credit ratings for over 120 sovereign nations and 11,000 corporate issuers.

Moody's Analytics offers tools and best practices for measuring and managing risk in the capital markets through "expertise and experience in credit analysis, economic research and financial risk management".

Both are subsidiaries of Moody's Corporation, which reported revenues of $3.3 billion in 2014.

In November 2013, the UPA government had accused Goldman Sachs of trying to interfere in the country's politics after the investment bank upgraded its assessment of the Indian economy on the expectation that Modi would form the government after the polls in May 2014.

In its note titled "Modi-fying our View: Raise India to Marketweight", Goldman Sachs analysts had said Modi was being seen as an agent of change.

At that time, Anand Sharma, the commerce minister in the UPA government, had criticised Goldman Sachs for "parading its ignorance about the basic facts of the Indian economy".

This time, the BJP government has reacted in a similar manner after Syed's note.

Governments often react with petulance when a globally well-known credit rating and research agency puts out an unflattering note.

In August 2011, Deven Sharma, president of Standard and Poor's, had announced his resignation after he authored a report in which the global rating agency downgraded the United States credit rating from AAA - signifying the highest rating - to AA+.

The downgrade had led to a sharp criticism of the Obama administration. It prompted the then US treasury secretary Timothy Geithner to remark that the S&P move was based on a "lack of knowledge" of the nation's finances.

Sharma insisted that his resignation was not related to the downgrade.

S&P still maintains its credit rating for the US at AA+.

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