World Governance Indicators (WGI) : World Bank
According to a presentation prepared in 2020, by the then Principal Economic Advisor in the Ministry of Finance, Sanjeev Sanyal, inputs that go into the making of the World Bank’s World Governance Indicators (WGI) are arbitrary.
- A presentation titled— “Subjective Factors that impact India’s Sovereign Ratings: What can we do about it?” — was prepared by the Ministry of Finance for internal circulation within the government to counter the negative commentary on India.
- The 36-page presentation noted that around 18-26% of India’s sovereign rating is based on subjective factors and World Bank’s World Governance Indicators (WGI) is used as a proxy for these subjective factors.
- The Worldwide Governance Indicators (WGI) project reports governance indicators for over 200 countries for the following six dimensions of governance:
- Voice and Accountability
- Political Stability and Absence of Violence/Terrorism
- Government Effectiveness
- Regulatory Quality
- Rule of Law
- Control of Corruption
- These aggregate indicators are based on over 30 individual data sources produced by a variety of survey institutes, think tanks, non-governmental organizations (NGOs), international organizations, and private sector firms such as Economist Intelligence Unit (EIU), Varieties of Democracy (V-Dem) Project and Freedom House, etc.
- According to the government, World Governance Indicators (WGI) is based on impressions from the Western press or small surveys of NGOs and a handful of academics, many of them do not even have an India expert.
- Due to the negative commentary on India by these institutes there will be a drop in WGI scores.
- This could downgrade India’s Sovereign Ratings.
- Jammu and Kashmir Reorganisation Act of 2019, Citizenship Amendment Act, 2019, National Register of Citizens (NRC), construction of a Hindu temple at a disputed religious site, etc. were the topics on which there was negative commentary.