Commenting on recent remarks by rating agency Moody’s Investors Service about rising political tensions in India, Shamika Ravi, Member of Economic Advisory Council to the Prime Minister, has said that such agencies should provide a more objective picture.

Speaking at Moneycontrol’s Policy Next summit, Ravi said the “number of riots in India have been falling. Though Manipur is not an isolated issue, it is a structural issue related to aspects like land.”

On August 18, Moody’s affirmed its Baa3 rating on India and maintained the stable outlook, but warned of political issues and even cited the example of the ongoing violence in Manipur. The northeastern state has been embroiled in an ethnic conflict for several months now. The matter was raised in the recently concluded Monsoon Session of Parliament by the opposition, with the Narendra Modi government even facing a no-confidence motion. The motion was successfully defeated by the government.

Moody’s comments on the risk of populist policies amid rising domestic political polarisation come months before India votes to elect its next central government. While Prime Minister Modi romped to power in 2014 and 2019, as many as 26 opposition parties recently rallied under the single banner of ‘INDIA’, or ‘Indian National Developmental Inclusive Alliance’.

India has been pitching for an upgrade from rating agencies and has previously expressed its displeasure at what it has termed as bias against emerging economies. In fact, the Economic Survey for 2020-21 contained an entire chapter titled ‘Does India’s Sovereign Credit Rating reflect its fundamentals No! ‘ which argued that domestic fiscal policy “must not remain beholden to a noisy/biased measure of India’s fundamentals and should instead reflect Gurudev Rabindranath Thakur’s sentiment of a mind without fear”.