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what the cost of development

Created by : sandesh saboo, Research Associate/Analyst, saboo associates  | 10 02 2009 10:57:07 +0000
Industry : Equity Research/AnalyticsFunctional Area : Equities(Markets)
Keywords : india owes $82.5 b to foreigners: rbi2009-10-02 12:33:46 in terms of the country's assets and liabilities to the international community india owed $82.5 billion to foreigners as on june-end this year 39 per cent higher than $59.4 billion three months back
Activity:  195 views;  last activity : 07 06 2010 20:18:09 +0000

thats huge money who is going to pay for it and when would we repay it.

  
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The meaning and objective of development of an economy is 1)to reduce unemployment2) to allieviete poverty 3) to reduce inequality.

So when this is achieved through internal policies funded localy or from funds borrowed from abroad increase the revenue to the nation which can be used to pay back the debt owed.

Soverign debt is alloted after careful study on whether the Country can pay back their debt obligations. The risk involved in Soverign debt is ascertained like the wealth generating capability and default rates of previous debts owed etc; guides the Creditor in making the decision on how much and on what terms the debt can be arranged like the interest rates to be charged. Still some countries default like Russia and Pakistan last time. Even Soverigns have their credit ratings. I think India has a good credit rating so we can borrow based on that. Rating agencies like Moody's and Standard and Poor rates Soverign debt.

 
By Mathew Cherian, Research Associate/Analyst, Western Michigan University  10 02 2009 17:20:43 +0000
 
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Completely agree with Mr. Matthew. Poverty, unemployment & inequality are the major hurdles in the path of a developing nation our's. They form a vicious circle & poverty being the root of all problems. So if we are able to eradicate poverty all the other issues would be automatically taken care of.

Now regarding loans i would like to emphasize that every nation has different phases of development. India is in a developing phase and we need foreign funds for development. I am sure that there are debt repayment mechanisms in work by the government, that's why our credit is good & we keep on getting more loans. $82.5 billion might seem to be a staggering amount but it's a regulated one.
By Suvrajit Gangopadhyay, B.E. (Elex. & Comm.)  | 10 05 2009 09:15:47 +0000
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It was Osho's principle that - if you allow capitalism to develop to the fullest extent, socialism would develop by itself. This looks to be adapted everywhere now.
By taranath joshi, DGM Operations, EOL,  | 10 03 2009 16:56:47 +0000
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Very true Mr Mathew the meaning of economic development lies in fulfillment of objective in the above three points/ dots mentioned by you.and nation is called  to be developed or developing by attaining them in true sense.
By varsha , Head/VP/GM-Quality, frac  | 10 03 2009 15:18:15 +0000
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I agree with Mr.Cherian. Development of a country means no poverty, no unemployment and equality to all. If this is achieved, the country can be called developed. In order to achieve this, more offices, industries, schools for education etc. are required and all of them needs money. Lot of money.
Taking loan to achieve these things is nowhere wrong but a country should always keep in mind to repay the loans as early as possible so that it doesn't face the burden of interests and debts any longer which may crash its economy...
By Esha Johar, Risk Analyst, Irevna  | 10 03 2009 08:41:27 +0000
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It's ok to be in debt as long as we don't have to pay interest. But reality is that we have to pay interest on it and if we can't pay interest now then the situation will come when we will paying more interest than principle.

I think at present circumstance India is not capable of paying these loans. At present Indian require more loan for development. I hope these loans will get interest free extension. 
By Deepak Agrawal, Consultant, Independent Consultant  | 10 02 2009 11:13:08 +0000
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is it okay to be in debt for development.
By sandesh saboo, Research Associate/Analyst, saboo associates  | 10 02 2009 10:57:07 +0000
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