Giving details about CRIS, chief economic advisor Kaushik Basu said major credit ratings agencies provide the sovereign credit rating of each nation as an absolute grade. How other nations fare does not matter in a particular nation’s rating score
New Delhi: Investment prospects in India have improved in the past five years as per CRIS, a new index developed by the finance ministry for comparison of various countries’ sovereign ratings using Moody’s ratings, reports PTI.
“India’s score has risen from 66.47 in 2007 to 69.83 in 2011. In other words, in relative terms, India has become a better investment destination by 5.06%,” chief economic advisor Kaushik Basu told reporters after unveiling the ‘Comparative Rating Index of Sovereigns (CRIS)’ here.
India’s rank in terms of CRIS moved up from 61st position in 2007 to 55th in 2011. The improved score is partly due to the decline in scores of some European nations, leading to deterioration of the world average by over 4.8%.
“Since for investors, relative or comparative rating is such an important concept, it was felt that we ought to develop a new index which captures precisely this idea,” he said, adding that CRIS would be a periodic feature.
The index is based on the ratings of global agency Moody’s and data on the gross domestic products (GDPs) of 101 nations given by the IMF.
Going forward, the ratings of other major rating agencies like S&P and Fitch might be used for CRIS.
Paraguay, Indonesia and Peru were the countries that registered the maximum increase in their ratings between 2007 and 2011, as per CRIS, while Portugal, Ireland and Pakistan witnessed the biggest fall in the index.
“The index uses external data on GDP and ratings combined in terms of pure mathematical and statistical methods without interventions or interpretations,” Mr Basu added.
The formula used for calculating CRIS would be made public at a later stage, he said, adding, “We did some research... We believe we are the first (to develop such an index).”
Giving details about CRIS, the CEA said major credit ratings agencies provide the sovereign credit rating of each nation as an absolute grade. How other nations fare does not matter in a particular nation’s rating score.
“When an investor searches across nations for a place to put her money, the relative rating of nations is important...
(it is entirely possible) a particular nation that has had no rating change may now be better off or worse off in comparative terms,” Mr Basu added.
Also, a nation that has travelled down the rating ladder in absolute terms may be, in relative terms, better off because others have done even worse, he said.
As per CRIS, the score for Greece has dropped sharply from 74.24 in 2007 to 13.97 in 2011— a decline of 81%—while that of Ireland and Portugal has fallen by more than 14%.
As per CRIS, the US has seen its score rise from 78.20 to 81.81.
“Ironically, this is accompanied by a loss of rank from the top of the chart to the 16th position. This shows that CRIS is distinct from a percentile score, which is also a relative measure of status,” Mr Basu added.
In 2007, the first rank was shared by 20 economies, but by 2011, the number of countries occupying the top slot had shrunk to 15.
China’s index value increased by 7.3% in the 2007-2011 period while Brazil saw its value increase by 11.8%, Russia witnessed a 7.5% rise and South Africa’s score rose by about 5.79%.
“All the BRICS had improvements in rank as well as index value,” Mr Basu added.
Over the medium term, the government should draw up an appropriate road map to reach the FRBM (Fiscal Responsibility and Budget Management) target of 3% of the gross domestic product (GDP), Prime Minister's Economic Advisory Council (PMEAC) chairman C Rangarajan said
New Delhi: India is unlikely to meet the 4.6% fiscal deficit target for the financial year ending 31st March, Prime Minister's Economic Advisory Council (PMEAC) chairman C Rangarajan said here on Tuesday.
“Perhaps this is difficult to achieve (fiscal deficit target of 4.6% for this fiscal),” Mr Rangarajan said while delivering the ASSOCHAM Foundation Day lecture on ‘The Indian Economy: Concerns and Prospects’.
He further added that “to gain credibility, it is important that fiscal deficit remains close to this level”.
Over the medium term, the government should draw up an appropriate road map to reach the FRBM (Fiscal Responsibility and Budget Management) target of 3% of the gross domestic product (GDP), Mr Rangrajan said.
“We must focus particularly on reducing the overall level of subsidies as a proportion of GDP,” he added.
The government’s fiscal situation has shown deterioration at the end of the first nine months of the current financial year, mainly due to poor realisation of non-tax revenues and also the government has so far managed to raise Rs1,145 crore this fiscal from disinvestment against a target of Rs40,000 crore.
According to the Controller General of Accounts (CGA) data, the government’s fiscal deficit went up to Rs3.81 lakh crore, or 92.3% of the Budget estimates at the end of December.
The Centre's fiscal deficit—gap between overall expenditure and receipts—was 45% of the estimates in the same period last year.
Mr Rangarajan further said the mismatch between the current account deficit (CAD) and capital flows has put pressure on rupee, which has weakened against the US dollar.
“The current account deficit in the current year may turn out to be higher than last year...Efforts must be made to keep the CAD around the manageable level of 2.5% of GDP,” Mr Rangarajan said.
Science is what scientists do! Science is holy and great but scientists need not be that pure, which is the problem today. Science tries to understand nature. Today scientists try and teach nature a lesson or two!
“The darkest places in hell are reserved for those who maintain their neutrality in times of moral crisis”— Dante Alighieri (1265-1321)
This reminds me of the yesteryears’ Teller-Pauling, Drexler-Smalley, Platt-Pickering, and many other debates between people who are “projected” to be great but were in fact, made of feet of clay. All those debates, including the present media debate between the two “giants” in the Indian space arena, were based on wrong understanding of the basic problems. If one understands human action instead of hating it, laughing at it or weeping at it, one can easily solve most problems sans tears! Let us look at the whole arena dispassionately.
Of course, the Antrix deal rakes in corruption. Who would give away 90% of the bandwidth to one private company without any auction after having spent millions of taxpayers’ money to build the satellite in the first place? As in all such deals, all of which are murky, the truth about who pockets the bulk share is anybody’s guess. The technologists named and shunned today might not have got any money but someone in India has got it for sure. The pity is that these technologists (they are not scientists in the true sense of the word) did not have their MBA degree where one is taught to make “profit in every deal irrespective of consequences,” and still appear to be very respectable in the eyes of the world.
Methinks that most of us, me included, are not educated in India. I find some of our rural folk, with whom I interact as patients, are better educated than I am. Education should be a process which trains a human being “to act justly, skilfully and magnanimously under all circumstances of peace and war.” If each of us were to cross our hearts and look within, we very quickly realise that we are not educated in the above sense. In effect, education must aim at making healthy minds, and not just wealthy careers, although the latter follows good education. Justice and magnanimity would have put an end to the present debate long before it even started. Many countries, including the UK, had a binary system of education which continues even now in the Netherlands; although in the UK conversion of polytechnics into universities ended that system some years ago. “Binary systems are compared to unitary systems where higher education is delivered in one type of institution (usually universities). Non-university higher education institutions includes: technikons, polytechnics, Fachhochschulen, hogescholen and colleges of higher education, and community colleges in the USA. In some countries the binary system operates between traditional universities and universities of applied science.”
India urgently needs this dichotomy as all our universities have become vocational training institutes which do not give education at all. Maybe that is what our industrial honchos want done, anyway. India was the best country in the world in the field of education as per the statement of James Babington Macaulay who destroyed it to make India a colony of Britain. “……I have seen in India, such high moral value, people of such high calibre, that I do not think we will be able to conquer that country unless we break the very backbone of their nation, which is her spiritual and cultural heritage, and, therefore, I propose that we replace the old and ancient educational system…” (House of Commons 2 February 1835) He succeeded fully. Even after our political independence many of our leaders at the helm of affairs were “British in thinking and morals but Indian in blood and colour,” exactly what Macaulay wanted. Our own such netas further destroyed the Indian educational system whose main aim really was to make healthy minds filled with humility (vidya vinaya sampannah). In every sphere of activity most of us are slaves of western thought including in science although the West now thinks all science originated in ancient Indian wisdom! How I wish the warring groups had Indian education which would have kept their blood pressures under control for sure.
The best thing for future would be to ban any governmental assignments to anyone who retires from government service and gets pension. This would put an end to lots of sycophancy during their tenure in top posts. Today the ‘aye’ sayers who bend all rules in service to help their bosses to collect black money and store it in safe havens get cushy jobs even after retirement. If they connive with the vested interests abroad they get posted in UNESCO, WHO, World Bank, etc to get pension benefits in US dollars. Some of them manage to get themselves parked in palaces, called the Raj Bhavans—a sheer waste of precious resources which could have gone to feed the dying malnourished children instead. Among the lot, the craftiest are the bureaucrats who know where to pull the wires to climb up the ladder or get a parking lot in the palace of their choice after retirement. If my suggestion about the post-retirement ban comes into effect debates like this would not arise at all. None of them obviously is educated to act justly and magnanimously under times of peace. They even do not hesitate to humiliate our brave army men who give their lives to keep us in peace. The army chief’s age controversy is one such example. Let us have universities meant to give real education like arts, humanities, pure science, mathematics and liberal arts. Let us have professional bodies to produce doctors, engineers, technologists, business managers and what have you. But all those that want to go to the latter stream must have a basic degree in humanities to make them human and humane.
The common man sees a halo around anyone calling himself a scientist. The word scientist is applied to everyone. Technologists and engineers who build rockets and satellites are not true scientists. They apply scientific principles to their work. Science is just a method of understanding nature. Any of us, if we try, could be a scientist. Even the so called father of science, Sir Francis Bacon, was only a trained lawyer! We need not attach a halo around scientists which makes them automatically arrogant and uneducated. Indian science establishments, as of now, to the best of my information, are not the best. Some years ago the Indian government had appointed a one-man commission to suggest changes needed in our science laboratories across the country, which eat up a large chunk of the poor tax payers’ money. The commission was led by late professor Rustum Roy, one of the greatest scientists this world had ever seen. He had told me that the situation was very bad and needed complete overhauling! I do not think any follow-up action was taken. Most of our research is only repetitive “copy-cat” variety. True refutative research that takes knowledge forward rarely happens here. Scientists are measured by the number of papers they write and the capacity to garner funds for their work. Both of these criteria have been found to be of no use in assessing their worth. Indian science must focus on making the life of our poor millions a wee bit better, to help improve our general nutrition and to find inexpensive methods of sickness management. On the contrary, what we are doing is what the West wants us to do. Less said about medical research the better. India is becoming the field trial area of new drug molecules of western drug companies! That is what we call research. We still do not grapple scientifically with human consciousness!
Need for justice and magnanimity in science and technology arena is more important than in other areas. To give one example—the Moon Mission. We were the 69th country trying that. There was no immediate advantage to the poor masses from going to the moon. They would much rather go to their neighbour’s house with a smile on their faces instead of quarrelling with the neighbour for some petty reason. The total budget was, I am told, one hundred thousand crores of Indian rupees which would otherwise have gone to feed all the malnourished children, 67 million in all, who die at the rate 218 per hour today! Where was the hurry for the moon mission when millions of our own children were dying? Where was magnanimity? Where was justice? Ultimately, the spacecraft went towards Mars, which is explained by science as Butterfly Effect! Heads I win and Tails you lose philosophy! A Dutch scientist calls today’s science as: “Wotenchap is whot wotenchoppen doen.” Science is what scientists do! Science is holy and great but scientists need not be that pure, which is the problem today. Science tries to understand nature. Today scientists try and teach nature a lesson or two!
“A multitude of causes unknown to former times are now acting with a combined force to blunt the discriminating powers of the mind, and unfitting it for all voluntary exertion to reduce it to a state of almost savage torpor”—William Wordsworth (1770-1850)
(Professor Dr BM Hegde, a Padma Bhushan awardee in 2010, is an MD, PhD, FRCP (London, Edinburgh, Glasgow & Dublin), FACC and FAMS. He is also the editor-in-chief of the Journal of the Science of Healing Outcomes, chairman of the State Health Society’s Expert Committee, Govt of Bihar, Patna. He is former vice-chancellor of Manipal University at Mangalore and former professor for cardiology of the Middlesex Hospital Medical School, University of London. Prof Dr Hegde can be contacted at [email protected])