An Analysis of Institutional Hypocrisy in Global Economic Assessment
By Dilip Subramanian - the Chief Economist of India (!!!)
The International Monetary Fund has demonstrated its remarkable ability to grade emerging economies with microscopic precision while applying binoculars backwards when examining developed nations. The latest Article IV Consultation report on India commends India's "very strong economic performance," yet the IMF's Data Quality Assessment Framework tells a different story: India's national accounts statistics receive a 'C' rating.
Look up at https://www.imf.org/en/news/articles/2025/11/24/pr-25392-india-imf-executive-board-concludes-2025-article-iv-consultation
The delicious irony? Brazil and China share this distinction. If that doesn't spell out most of "BRICs," that's not my fault—Russia completes the quartet. What an extraordinary coincidence that the world's most significant emerging economies all suffer from "shortcomings that somewhat hamper surveillance."
The 'C' rating signifies "some shortcomings that somewhat hamper surveillance"—the second-lowest grade. India's sins include an outdated base year of 2011-12, reliance on Wholesale Price Index deflators, and insufficient informal sector coverage. These are legitimate concerns that India openly acknowledges. The government has announced a comprehensive overhaul with a new base year of 2022-23, releasing February 27, 2026, incorporating precisely the data sources the IMF recommends.
But here's the question: if India, with 6.6% projected GDP growth, robust financial systems, and a $4 trillion economy, merits a 'C,' what do other OECD nations deserve?
Ah, the OECD—that paragon of statistical virtue!
A nation whose credit rating was downgraded by Moody's in 2025, and whose Congressional Budget Office revisions dwarf India's discrepancies. Yet miraculously, the US maintains its pristine statistical reputation. But I am sure this is NOT professional courtesy, given the Fund's Washington headquarters and the US Treasury's influence over senior appointments.
European nations enjoy comfortable A-grades despite methodological challenges and the spectacular failure to measure the 2008 financial crisis—which originated not in Mumbai's bazaars but in New York and London's "highly regulated" financial centers.
These ratings matter. Credit rating agencies reference IMF assessments when determining sovereign ratings. A 'C' grade translates into higher borrowing costs, reduced investment confidence, and suspicion over economic performance. India, China, and Brazil—representing over three billion people and substantial global growth—face scrutiny that developed nations conveniently escape.
The pattern is unmistakable: emerging markets face standards calibrated to find fault, while developed economies benefit from low expectations—or no expectations at all.
Here's the absurdity: the problem is already being fixed. India's rebasing will incorporate comprehensive corporate filings, LLP data, and unincorporated enterprise surveys. By February 2026, India's statistical framework will be more current than most developed nations. Will the IMF graciously upgrade the rating, or discover new "shortcomings"?
The predictable outcome: India improves, the 'C' becomes a 'B,' everyone celebrates reform. Meanwhile, the double standard—rigorous scrutiny for emerging markets, forgiving glances for developed ones—remains intact.
India should complete its statistical overhaul with unimpeachable rigour, demand reciprocal DQAF application to developed nations, and build alternative frameworks through institutions like the New Development Bank. When Western institutions demonstrate persistent bias, emerging economies must create spaces for fair assessment.
The IMF faces an existential question: remain relevant in a multipolar world, or be remembered as the institution applying 21st-century standards to emerging markets while allowing 20th-century exceptionalism for its primary shareholders?
India's 'C' rating reveals more about the IMF's contradictions than India's capabilities. The supreme irony? The country that stopped publishing monthly reports gets an implicit 'A,' while the country transparently improving its systems gets a 'C.' That's not surveillance; that's selective vision.
By February 2026, when India releases rebased data, the BRICS nations will watch whether the IMF recognizes genuine improvement or finds new reasons to maintain hierarchical rankings. The verdict is clear: Washington-based institutions remain instruments of Western economic hegemony wearing multilateral masks.
The IMF's report card reveals more about the graders than the graded. India's surging economy and global influence suggest the market has issued its verdict—valuing performance over paperwork, reality over ratings, results over institutional rubber stamps.
Perhaps it's time the Fund learned the same lesson.
No comments:
Post a Comment