Published: 27th May, 2022
Context
In an analysis of the World Bank’s World Governance Indicators, a key input for India’s sovereign ratings, a presentation by the Ministry of Finance’s Economic Division found that India’s scores were “much below” its peers on all counts.
About
About World Bank’s World Governance Indicators:
- The World Bank’s World Governance Indicators provide a ranking of 215 countries territories based on six dimensions of governance:
- Voice and Accountability;
- Political Stability and Absence of Violence;
- Government Effectiveness;
- Regulatory Quality;
- Rule of Law and
- Control of Corruption.
- These aggregate indicators combine the views of a large number of enterprise, citizen and expert survey respondents in industrial and developing countries.
- India’s WGI score:It is much below the BBB Median on all six indicators.
- While BBB is an investment-grade rating issued by global rating agencies such as S&P and Fitch.
- A WGI score below BBB Median would suggest that India falls below the middle when the scores of countries are arranged in a descending order.
- WGI play a key role in deciding sovereign credit rating of any country. India is losing its sovereign credit rating due to low score in WGI parameters.
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Governance:(as defined by WGI)
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