India has been far more stingy than most emerging market peers in its economic response to the covid-19 crisis, and that may harm rather than help its sovereign ratings In a recent interview, the chief economic adviser (CEA) to the finance ministry, Krishnamurthy Subramanian defended India’s limited covid-19 relief-cum-stimulus package, citing the fear of ratings downgrades in case of high fiscal slippages.
Subramanian pointed out that most countries which have announced big fiscal packages have better ratings than India has. A Mint analysis of fiscal packages offered across the world suggest that Subramanian’s statement is only half-true.