Head-on | India must develop its own methodology to rank global institutions

No country is as obsessed about its “global reputation” as India. The obsession reflects a colonial faultline: Government and citizens constantly seek international validation. This must stop.

Before examining how, consider the facts. GDP forecasts by the International Monetary Fund (IMF), the World Bank and the Organisation of Economic Cooperation and Development (OECD) are given more importance than the far 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 fatalities and universities.

Most rankings by global institutes fail the smell test. Their methodology is often faulty and invariably opaque. Errors are covered up till they are publicly exposed.

Recently, the IMF had to issue a mea culpa for getting India’s GDP numbers badly wrong due to an internal IMF data error. The apology came through clenched teeth. The IMF doesn’t like developing countries exposing its statistical ineptitude.

As I wrote in my BusinessWorld piece: “In April 2022, IMF data showed that India’s GDP would achieve the $5 trillion milestone only in 2028-29. That flew in the face of projections by most independent analysts that India’s economy was poised to cross $5 trillion in 2026-27 — two years ahead of the IMF’s forecast. The Covid-19 pandemic had already caused a two-year delay in the government’s target of India becoming a $5 trillion economy in 2024-25.

The IMF’s data therefore raised eyebrows. A contrite correction soon followed. Luis E Breur, the IMF’s senior resident representative for India, Nepal and Bhutan, told Business Standard on 19 May 2022: ‘IMF staff discovered a data input error that led to an error in calculating India’s gross domestic product (GDP) denominated in US dollars, which was corrected’.

”The projection of Indian fatalities during the first COVID-19 wave in 2021 by the World Health Organisation (WHO) is not only grossly inaccurate. The methodology is amateurish, employing a linear mathematical model to extrapolate “likely” deaths. The study relies additionally on unverified reports by news sites of varying quality to arrive at its conclusions.

India has a robust, decades-long system of recording deaths. Amitabh Sinha of The Indian Express has explained why the WHO study, largely outsourced to US academics, is such a shoddy piece of work. India’s Civil Registration System (CRS) and Sample Registration System (SRS) offer a vastly different — and more credible — number of Covid-19 fatalities during the first wave than WHO’s projections.

Global university rankings suffer from bias as well. They apportion greater weightage to peer-reviewed citations which puts Anglo-Saxon academic institutions at an advantage. Anglospheric academia form closed circles, cite one another’s research, and often ignore meritorious work from developing countries.

The high quality of faculty teaching in India, which is acknowledged globally, gets lower weightage in the rankings. It’s only when quality of faculty is weighed against size of faculty that the truth emerges. According to the latest QS World University rankings, the Bengaluru-based Indian Institute of Science (IISc) is now ranked as the world’s top research university with a perfect score of 100/100.

The sovereign ratings of countries by S&P, Moody’s and Fitch have long been discredited. Last week, Fitch upgraded India’s sovereign debt rating from negative to stable but retained it at BBB, the lowest investment grade, despite the fact that in 75 years of independence India has never defaulted on an international debt payment. The opacity and flagrant bias in sovereign rankings was called out by India’s former chief economic advisor (CEA) Krishnamurthy Subramanian who said “noisy, opaque and biased credit ratings” damage 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 rung of the investment grade. Reflecting the economic size and thereby the ability to repay debt, large economies have been predominantly rated AAA. China and India are the only exceptions to this rule.

Sovereign credit ratings methodology must be amended to reflect economies’ ability and willingness to pay their debt obligations by becoming more transparent and less subjective. Developing economies must come together to address this bias and subjectivity inherent in sovereign credit ratings methodology to prevent exacerbation of crises in future. ”There is often a political slant to economic forecasts.

The OECD was founded in 1961 as a rich-nations’ club dominated by the United States and Western Europe. These countries remain deeply upset with India for not supporting Western sanctions on Russia. It comes as no surprise therefore that the OECD’s forecast for India’s GDP growth in 2022-23, at 6.

9 per cent, 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 reputed Indian rating agencies need to set their sights higher. India receives over $80 billion in foreign direct investment (FDI) from various countries. Top Indian rating institutes should rank countries and global companies 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 firms, including startups with global operations, need to know this from Indian credit agencies. Similarly, Indian students collectively spend billions of dollars studying in foreign universities. Indian publications have for decades ranked Indian B-schools, technology institutions like the IITs and liberal arts universities.

Indian students applying to foreign universities, however, deserve an Indian perspective from leading Indian research companies and publications on the best — and worst — foreign academic institutions. The parameters could go beyond faculty quality, research, infrastructure and pedagogy to cover qualitative criteria: a conducive social environment devoid of racism and sexism and an assessment of whether the fees charged are justified by the quality of education offered. Indian think tanks must also build data-based models on religious freedom in the West, including Hinduphobia, attacks on Sikhs and other forms of social or ethnic bias.

Such studies, circulated widely and globally, will be a guide to Indian citizens wishing to travel, study or work abroad. It is time India stopped being beholden to how others see us and start telling others how we see them. The writer is editor, author and publisher.

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