NEW DELHI: Ratings agencies are following double standards and need to change their methodology to remain relevant, especially in the wake of the Covid-19 crisis, a senior government official said, criticising Moody’s decision to downgrade India’s rating a notch to Baa3 from Baa2.

Over 30 countries had been downgraded since the onset of the crisis and that is because governments have unveiled stimulus packages, the official said, making a case for a review of how countries are rated. The official also said the ratings agencies were making selective downgrades, comparing India with Japan. Baa3 is Moody’s lowest investment grade.

Japan has a debt-GDP ratio of 250 and despite the denominator not growing as fast as India, it still attracted a higher rating, the official said. “Every country is a unique case,” he said. “We have to think —what is the natural safe limit that we can reach?”

India’s Debt to GDP ratio is at 72% and is expected to rise especially with revenue falling, the official said.

“We are waiting to see how consumption picks up. We don’t expect services to pick up substantially, so that is gone.”

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