My readers don’t trust the ratings of the global rating agencies like S&P, Fitch, Moody and many others. The reason behind such an act is that the numbers are cooked and their rating has insignificant affect on the Indian economic scenario. Well the global ratings are not to be taken lightly after the debacle of 2012. They have become pretty much serious in their offerings. But this time the very Indian economy is cooking the story of its next rating to positive covering up the real story of its economic crisis.

India Cooks Ratings
Indian government has approached for higher credit ratings from international rating agency Fitch. Senior Finance Ministry officials held discussions with senior officials from the rating agency to upgrade the ratings from Fitch. Fitch had last rated India in 2010, giving India's foreign and local currency a ‘BBB-/stable' rating.

After the recent rating of S&P Indian politicians are no longer raising the voice that Indian economy is quite comfortable placed in terms of investments and growth in the global map.

In order to get an healthy rating from Fitch government officials of the finance department has pointed out FDI inflows and the returns in the market. The Government official said that with FDI inflow at its highest and FIIs pumping money into Indian markets. The biggest joker has been the Finance Minster of India who always denied diplomatically about the problems of the Indian economic growth and acclaimed that Indian economy is well positioned to achieve an growth of 7%. He even acclaimed that the rating given by S&P will have no impact on the investment scenario of Indian economy and the same should be taken as an insignificant affect on the economy. Today the same officials and minister is acclaiming that the S&P's negative rating outlook on India's deficit, debt burden and economic health may have "perceptional impact" on foreign investors. Now my question to readers is why we are cooking the numbers of rating agencies when it has negligible or insignificant affect and secondly why we are playing with ourselves rather than accepting the truth that we are slowing down.

I find many points jumping from the mouth of the readers giving favorable opines regarding the justification of the government manipulation of the ratings. Well before I finish I would like to accentuate the same thoughts of my readers for the final opine.

Live example of Indian economic Growth.

Indian textile has been once rated as the Textile industry in India traditionally, after agriculture, the only industry that has generated huge employment for both skilled and unskilled labor in textiles. The textile industry continues to be the second largest employment generating sector in India.

The same industry is reeling with the blessings of the present government policies which has been simply destroyed. In the last two years, 31,901 workers lost their jobs with the closure of 80 cotton/man-made fibre textile mills across the country. This is not the end. The closed units were not all small scale industries alone many large ones are the biggest share holders. Every state we find textile units being closed up and the government and its Finance Minister is aggressively demanding the India is well placed for an economic growth of 7%.

State Break Up of Closed Units.

 Among the 80 closed mills, the highest were in Maharashtra, where 20 mills shut shop.

 Of these five are in Mumbai – Bombay Dyeing & Manufacturing Company Ltd, Morarjee Goculdas Spinning & Weaving, New Great Eastern Spinning & Weaving, Ruby Mills and Prakash Cotton.

 Of the 12 closures in Tamil Nadu, five were in Coimbatore. These are Dharmaveera Textiles, Sri Ramakrishna Mills, Kothari Ind, Maruthi Textiles, Central Prison Spinning & Weaving.

 In Gujarat, of the 10 mills that closed down, five were in Ahmedabad and include Mafatlal Industries, Maneklal Harilal, Neptune Spin-Fab, Rajnagar Spinnning & Weaving and Asoka Cotyson (a division of Arvind Mills).

 Seven mills each shut shop in Uttar Pradesh and Punjab, according to the Textile Ministry.

 As on March 31, 2012, there were 1,957 cotton/man-made textiles mills, employing 8.58 lakh workers.

Textile sector was used to be called as one of the defensive sector for doing investments as cloth requirements will exits even in downside economy.

A finance official of the government has tried to allure Fitch upcoming ratings by acclaiming the returns of the equity market and the flow of FII funds into the streets. The officials has forgotten and are quite illiterate to acclaim these type of facts and figures when they don’t understand the pains of the Indian companies who are battling with the rising cost of debt due to the governments negligence towards depreciating rupee.

Upcoming Fitch rating Justification

Today the government is giving examples for FIIs investments and growth of the return from stock market but they don’t understand that return is just going to diminish with the peroformance of the upcoming quarter results in Fy2012-13. The rupee has declined from 44.65 per dollar on March 31, 2011, to below 54 now. The depreciating rupee is exacting a heavy toll on Indian companies. A rough calculation shows that their external debt has swollen by at least Rs 80,000 crore between March last year and now. RBI data show that Indian companies had external commercial borrowings worth $88.8 billion or Rs 3.96 lakh crore by end-March 2011 on their books.

These have now swelled to Rs 4.76 lakh crore in rupee terms. That is a 19 per cent expansion. The above number is for the principal alone. The interest cost on servicing the loans is likely to have gone up too due to the higher dollar.

Hence one can easily understand that its not an easy cup of tea to fool the FII’s and global rating agency to rate Indian economy into an stable ground for investments. My question to my readers particularly who are still find it difficult to accept that Indian economy is well placed and the global rating agencies are doing filthy ratings does you all find Indian economic growth is at 7% and rating agencies are doing conspiracy at the back of India.

So once the cooked ratings come up the speculators of the market will jump up to drag investments and search for new fools on the streets. The upcoming Fitch ratings will give an boost up to the rattled stock market and will also let the government to sleep for more time.
From today onwards we will not pass the complete blame on rating agencies. India is now cooking’s its growth ratings.