on | India must develop its own methodology to rank global institutions
It’s time for India to stop being beholden to how others see us and start telling others how we see them
No country is as obsessed with its “global reputation” as India. The obsession reflects a colonial flaw: government and citizens constantly seek international validation. This must stop. Before considering how, consider the facts.
The GDP forecasts of the International Monetary Fund (IMF), the World Bank and the Organization for Economic Co-operation and Development (OECD) matter more than the much more rational forecasts of the Reserve Bank of India (RBI) . The affliction extends to rankings on the Human Development Index, media and religious freedom, Covid deaths and universities.
Most world institute rankings fail the odor test. Their methodology is often flawed and invariably opaque. Errors are concealed until they are publicly exposed. Recently, the IMF had to issue a mea culpa for getting the Indian GDP figures wrong due to an internal IMF data error. The apologies came through gritted teeth. The IMF does not like developing countries to expose its statistical incompetence.
As I wrote in my Business world exhibit: “In April 2022, IMF data showed that India’s GDP would not reach the $5 trillion mark until 2028-29. This went against projections by most independent analysts that India’s economy was on course to surpass $5 trillion in 2026-27, two years ahead of IMF forecasts. The Covid-19 pandemic had already delayed the government’s target of making India a $5 trillion economy by two years by two years. The IMF data therefore raised eyebrows. A contrite correction soon followed. Luis E Breur, IMF High Resident Representative for India, Nepal and Bhutan, said Trade standard May 19, 2022: “IMF staff discovered a data entry error that resulted in an error in the calculation of India’s gross domestic product (GDP) denominated in US dollars, which has been corrected.”
The projection of Indian deaths during the first wave of COVID-19 in 2021 by the World Health Organization (WHO) is not only grossly inaccurate. The methodology is amateurish, using a linear mathematical model to extrapolate “probable” deaths. The study further relies on unverified reports from news sites of varying quality to reach its conclusions.
India has had a robust death registration system for decades. Amitabh Sinha from The Indian Express explained why the WHO study, largely outsourced to American academics, is shoddy work. India’s Civil Registration System (CRS) and Sample Registration System (SRS) offer a very different – and more believable – number of Covid-19 deaths over the past the first wave than WHO projections.
World university rankings also suffer from bias. They give greater weight to peer-reviewed citations, which benefits Anglo-Saxon academic institutions. Anglospheric scholars form closed circles, cite each other’s research and often ignore meritorious work from developing countries.
The high quality of faculty teaching in India, which is recognized worldwide, is given less weight in the rankings. It is only when faculty quality is weighed against faculty size that the truth emerges. According to the latest QS World University Rankings, the Indian Institute of Science (IISc) based in Bengaluru is now ranked as the best research university in the world with a perfect score of 100/100.
Sovereign country ratings by S&P, Moody’s and Fitch have long been discredited. Fitch last week raised India’s sovereign debt rating from negative to stable, but kept it at BBB, the lowest investment grade, despite the fact that in 75 years of independence , India has never defaulted on an international debt.
The opacity and blatant bias in sovereign ratings has been denounced by India’s former chief economic adviser (CEA), Krishnamurthy Subramanian, who said that “noisy, opaque and biased credit ratings” are hurting foreign investment flows.
Subramanian added: “Never in the history of sovereign credit ratings has the fifth largest economy in the world been rated at the lowest echelon of investment grade. Reflecting economic size and therefore ability to repay debt , major economies were overwhelmingly rated AAA. China and India are the only exceptions to this rule. Sovereign credit rating methodology needs to be changed to reflect the ability and willingness of economies to pay their debt obligations in becoming more transparent and less subjective Developing economies must come together to combat this inherent bias and subjectivity in the methodology of sovereign credit ratings in order to avoid the exacerbation of crises in the future.
There is often a political bias in economic forecasts. The OECD was founded in 1961 as a club of wealthy nations dominated by the United States and Western Europe. These countries remain deeply upset with India for not backing Western sanctions against Russia. It is therefore not surprising that the OECD forecast for India’s GDP growth in 2022-23, at 6.9%, is lower than the forecast of any other institution, foreign or Indian.
The fine line between politics and economics is blurred in global agencies. India must therefore develop its own robust ranking system for Indian and global institutions. CRISIL, ICRA and other reputable Indian rating agencies must aim higher. India receives over $80 billion in Foreign Direct Investment (FDI) from various countries. India’s leading rating institutes are expected to rank countries and global companies based on risk parameters, financial stability, security and intellectual property rights.
For example, is Canada a good place to invest? What about Australia, Mexico, Spain, Egypt? Indian companies, including startups with global operations, should find out from Indian credit bureaus.
Likewise, Indian students collectively spend billions of dollars to study in foreign universities. Indian publications have been ranking Indian B schools, technological institutions like IITs and liberal arts universities for decades. However, Indian students applying to foreign universities deserve an Indian perspective from leading Indian research companies and publications on the best – and worst – foreign academic institutions.
Parameters could go beyond the quality of faculty, research, infrastructure and pedagogy to cover qualitative criteria: a conducive social environment devoid of racism and sexism and an assessment of the justification of fees charged by the quality of education offered.
Indian think tanks also need to build data-driven models of religious freedom in the West, including Hinduphobia, attacks on Sikhs, and other forms of social or ethnic prejudice. These studies, disseminated widely and in the world, will serve as a guide for Indian citizens wishing to travel, study or work abroad.
It is time for India to stop being beholden to how others see us and start telling others how we see them.
The writer is editor, author and publisher. The opinions expressed here are personal.