OFTEN, one comes across various indices and ratings that project India in poor light. Suddenly, some indices change the tone and place India among the fastest growing economies. Soon, such a good rating in the sphere of economy is followed by a poor rating of India in terms of freedom, democracy, social equality etc. The keen readers of such ratings realise that the countries placed above India in some of the ratings have failed miserably, but India has been shining like a bright star. But, new ratings based on newer parameters spring up, raising new concerns. The latest case in point is ratings structure that may be in place for the Indian corporates in the wake of the EnvironmentalSocial-Governance (ESG) goals. The Freedom in the World Index by Freedom House, Democracy Index by Economist Intelligence Unit, V-DEM indices by the Varieties of Democracy Institute, United States Commission on International Religious Freedom report, International Monetary Fund reports on gross domestic product (GDP), and ratings by some of the international agencies, had either projected India poorly or placed her below some of its neighbours. Not long ago, India’s GDP was said to be lower than that of Bangladesh. Some projections had placed India below Sri Lanka. Some reports a few years ago had projected Afghanistan better than India on some counts! As the situation unfolded gradually, these indices and ratings were proved nothing but a sham. Instead of objective truth, they proved to be subjective interpretation of data analysed without considering finer socio-economic and socio-political aspects. But, these indices and ratings were used, then, by the critics of India. These were used to launch a tirade against India.

 

Those crying hoarse over alleged democratic downslide in India, based on such misleading indices and ratings, suddenly went silent over sudden death of democracy and human rights in Bangladesh and Afghanistan. Some of the countries these indices and ratings had placed above India are facing socio-political, religious, economic, and genderbased turmoil. In sharp contrast, India has emerged as a stronger economy, poised to become the third largest economy of the world. Some time ago, India’s Economic Advisory Council to the Prime Minister (EAC-PM) had published a paper titled ‘Why India does poorly on global perception indices’. Mr. Sanjeev Sanyal, Principal Economic Adviser to the Government of India, who had authored the report with Aakanksha Arora, had minced no words when he said that the opinion of some analysts could not be taken as objective truth.

 

The report had rightly pointed out the lack of transparency about the process of choosing the experts/analysts who created these questionable indices and ratings. Besides, the questionnaire used to create these indices and ratings were subjective in nature. The new ESG framework is bound to stir the atmosphere further as companies are ‘assessed’ based on how they fare on ESG goals. Opinions based on that are used to affect market value of companies, positively or negatively. But, it is not clear if there are any sets of norms for choosing experts, framing questions, setting goals, chalking out timelines for achievement of goals. There are some pertinent questions too. Who sets the goals, on what basis? Are the regional socio-cultural history and variations considered while setting such goals? How can things be assessed on the basis of mere numbers? If time proves the ratings wrong, is there any mechanism to penalise the agencies giving such ratings? If there is no mechanism to challenge the subjectivity-based ratings, why are such agencies allowed to operate and dent the image of governments and corporates? These questions are indeed uncomfortable for the global elites who have been inventing frameworks for decades to maintain their grip on the world resources and economy. Indian corporates must understand these finer aspects before blindly copying the frameworks even for serving the noble ESG goals. Apart from the risk of politicisation of the concept of ESG, the ratings area needs to be treaded cautiously because answers to subjective questions run the inherent risk of inconsistencies, contrasts, and cultivation of biases.

 

Why should the ratings and their frameworks invented in Europe or the USA or the dominating global powers be adopted by one and all across the globe? China never cared for the ratings originating in Western world. Besides, some genuine civic leaders have questioned as to why the corporate or country ratings leave out entities involved in weapons trade, cigarette, alcohol; or suspect corporations. The global elites have not been challenged seriously and adequately in the area of indices and ratings. But, now India is in a position to take lead in this regard. It’s time India had in place her own global ratings system through thinktanks or policy bodies.

 

With it, India must issue ratings for various countries of the world including the USA and China, and also for various corporations headquartered outside India Unless this is done, various indices and ratings shall continue to be utilised as tools of furthering geo-economic and geopolitical interests of the global elites. India, a global player now, must confidently launch a serious multi-pronged effort to devise ratings that offer a worldview of developing countries and particularly the Global South. India will do well in fostering economic co-operation based on the underlying spirit of multilateralism in such ratings. With Indian global ratings and indices, the world also will witness a happy balance of developmental, economic, socio-political, socio-cultural discourse between the developed and the developing world.