India’s role in world affairs

03/10/2012

India is at present the second largest country in the world with every sixth person in the world being an Indian.In the next 10-15 years India will be the largest country with over 20% of the world i.e every fifth person in the world will be an Indian. At present India’s contribution to the world GDP is about 6-7%,being the third largest economy in the world. In the next 10-15 years,India’s share in the world GDP may go upto 10-12%, though it may continue to be the third largest economy. In this position,India should not contiue to take the stand that it does not want to interfere in the internal affirs of other counries. It should take active interest and major role in ensuring peace in the world and in helping poor countries not with materials but by giving consultation, technology, and if necessary loans.In particular, in consultation and cooperation with large countries like China,USA,Indonesia, Brazil etc India should strive for:

i.dissuading counries like Iran, Israel and North Korea to give up plans even for developing nuclear technology even for peaceful purposes,as this is the first step in the efforts for nuclear weapons

ii.persuading countries to take full responsibility for dismantling terror outfits and eliminating terror from the world. Terrorism has been one of the causes for world economic recession, as a lot of manpower is wasted in trying to preven terrorist activities

iii. being the largest country,it has to take responsibity to contribute to the health of the world population. towards this,India has to spend more, on medical research and spend more on establishing super speciality hospitals,so that small countries which cannot afford to establish the same can utulise the facilities in India

iv.India should increase its food production by 200-300% so that countries affected by natural calamities like floods, drought, earth quakes etc. can be assisted.

v.India should take initiative in brokering peace between warring countries or groups of coutries

vi.India should be the one which tables a large number of resolutions in UN organs like General Assembly, Security Council, specialised agencies etc.(It is taken for granted that by that time India would be a permanent member of the UN)

vii.India should spend much more on and expand its aciviies in the space, nuclear, ocean,heavy materials, renewable sources of energy, nano and emerging sciences as small countries will not be able to spend manpower and money on large projects and allow other countries to benefit from its activities in these spheres.

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Credit Rating Agencies-Is there a need?

30/05/2009

India has allowed western credit rating agencies to operate in the country. It has also allowed the establishment of local credit rating agencies. Government of India and regulatory authorities including Reserve Bank of India and Securities and Exchange Board of India recognize the ratings of these agencies. People also give consideration to these ratings in taking decsions on investments. How do the agencies come to conclusions about the financial strength or weakness of a company  and how can one rely on their findings?

First of all, it is not possible for any agency to rate any manufacturing or financil services company correctly. Secondly, how can one be sure that its ratings are not subjective? Can the rating agency prepare any report on a company without the company’s full cooperation? Will the company provide any information which will show it in a bad light?

Reserve Bank of India and a few research organisations estimate the national GDP to the accuracy of 0.1% i.e say 5.7% or 5.8% and keep revising the same. When it requires the entire government machinery to estimate GDP to the accuracy of 0.1%, how can any smaller organisation or institution do it? At the most one can say that because of good rains, the agricultural production may go up by 10 or 15%; the production of fertilizers, pesticides, agricultural implements etc. may also go up by 5% or 10% etc. If there is increse in wages of the entire working class, one can predict that the demand and hence production of consumer durables may also go up. But no agency can estimate that the economy of a large country like India can grow, say  by 7.1% or 7.2%.

The ratings of the agencies is creating havoc in stock markets. Many companies abandon proposed projects which affects the growth of the economy. There appears to be a need to seriously consider whether there is need for the credit rating agencies.