Finance Minister Nirmala Sitharaman on Saturday said the government is looking at the methodologies used by credit rating agencies in rating corporates.
She also said the Narendra Modi government decided against joining the Regional Comprehensive Economic Partnership as the offer did not match India’s expectations and aspirations.
Delivering the sixth G. Ramachandran Memorial Lecture organises by the Southern India Chamber of Commerce and Industry, Sitharaman said she had met some rating agencies to understand how they rate a company, its assets and how far it is in line with the happenings in the economy.
The Finance Minister, without mentioning any names, said corporates have gone bust soon after getting AAA-rated, thereby making people wonder.
She said a churn is happening in the way banks are assessing their asset quality and also the manner that credit ratings are done.
According to Sitharaman, the government plans to further strengthen the powers of financial sector regulators like Reserve Bank of India, and the Securities and Exchange Board of India.
Citing the reduction in corporate taxes, she said the government is fast responding to the needs of various sectors.