World Governance Indicators

In an analysis of the World Bank’s World Governance Indicators (WGI), a presentation was made by the Ministry of Finance’s Economic Division. The presentation found that India’s scores were much below its peers on all counts.

Background –

• The Finance Ministry’s economic division was drafting a strategy to counter the negative commentary on India by global think-tanks, indices and media.
  • • The government is worried that the negative commentaries could lead to downgrading of sovereign rating to junk.
    • A sovereign credit rating is an independent assessment of the creditworthiness of a country or sovereign entity.
• It can give investors insights into the level of risk associated with investing in the debt of a particular country, including any political risk.
• Earlier, in June 2020, then Principal Economic Advisor in the Ministry of Finance, Sanjeev Sanyal, prepared a presentation for internal circulation within the government.
  • • The presentation was titled as “Subjective Factors that impact India’s Sovereign Ratings: What can we do about it?”.

About the World Banks’ World Governance Index –

• The World Bank’s WGI provide a ranking of 215 countries and 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.
• They are based on over 30 individual data sources produced by a variety of survey institutes, think tanks, NGOs, international organisations, and private sector firms.