New Delhi, Dec 22 : Credit rating agencies such as Fitch, Moody's and S&P, need to reform their sovereign rating process which is heavily loaded against developing countries like India resulting in additional funding costs running into billions of dollars, the government's Chief Economic Adviser, V Anantha Nageswaran has said. In a document titled Re-examining Narratives: A Collection of Essays, published by the CEA's office, Nageswaran said the enormous degree of opaqueness in credit rating methodologies due to an 'over-reliance' on non-transparent and subjective qualitative factors also gives rise to 'bandwagon effects and cognitive biases amply reflected in various studies, generating concerns about the credibility of credit ratings." 'Enhanced transparency in credit rating may compel the use of hard data and likely result in credit rating upgrades for a good number of sovereigns," he said. 'This will help them access private capital, which has been assigned the central role by G-20 in addressing global challenges such as climate change and supporting the energy transition," Nageswaran added. Nageswaran's observations come at a time when the government continues to seek an upgrade in India's credit rating, based on the strong macroeconomic fundamentals of the country. The issue has been taken up at meetings with representatives of Fitch Ratings, Moody's Investors Service and S&P Global Ratings. A sovereign credit rating is a measurement of a government's ability to repay its debt and a low rating indicates high risk of default on credit. The sovereign credit rating determines the rate of interest and the ease with which governments and corporates of a country can raise funds from the global market. Rating agencies use various parameters such as growth rate, inflation, government debt, short-term external debt and political stability to rate a country. Nageswaran said: 'Their effect on the ratings is non-trivial since it implies that to earn a credit rating upgrade, developing economies must demonstrate progress along arbitrary indicators while simultaneously contending with the discriminations the ratings tend to carry." Nageswaran emphasised that while a sovereign is obligated to be completely transparent, establishing symmetry of obligations warrants that the rating agencies make their processes transparent and avoid employing untenable judgements. /IANS