How do you look at the economic scenario in India. Especially after credit rating agencies have downgraded the country?

India could do well in the long run. The entire world economy is recuperating from the shocks of the South-east Asian crisis. Like many other countries in the world, India is also in the process of adjusting to the new realities. In the last few months, Indian exports have suffered alot due to sudden cheap exports from Thailand and Indonesia vying for the same markets.

As the equilibrium has not been established as yet, we think the recovery will take some time. The Asia crisis was a lesson to many countries.We have an optimistic long-term view of the Indian economy. We would like to participate in this growing economy.

Is there any possibility of a rating review for India in the near future?

No. We are not planning to have any rating review for India as we conduct analysis after a certain period of time. Our earlier downgrade was based on the then situations like US sanctions, falling exports and nuke tests which have affected the Indian economy.

Don't you think that the rating agencies failed to predict the South-east Asian crisis and overreacted in the case of India?

I think at least we have done better than our competitors in some South-east Asian nations. The main reasons we failed in predicting the South-east Asian crisis is due to a complete lack oftransparency in the working of these countries and its policies. The analysts, media and outsiders did not understood the prevailing situation of the South-east Asia. Hence, the rating failure. The Indian economic scenario at the time of our last review was not very encouraging as it was reflected in rising fiscal deficit, falling exports and lower GDP growth.

What do you think India could do to attain a higher level of GDP growth?

We do not have a ready-made growth pattern for any country. Though I believe in organic growth pattern -- the way a plant grows at the direction of the sun light. We have to be adaptive in thinking about strategy. For instance, if we think there will be growth in one type of security, we try to bring in staff from other departments to immediately get working on it. We do not have any grand plans. The capital markets are changing all the time and it is important to get in front of what is big.

Despite so much pessimism on India as reflected in your ratings, what arethe reasons behind Moody's picking up a stake in an Indian entity when you have downgraded the country's sovereign rating?

We are not associating our ratings and commercial activities. We have always maintained a Chinese wall between rating of a country and commercial decisions taken in that country. We attempt to give ratings independent of any commercial relationship. We are positive on the long-term future of India and developing countries in general. We want to have a more active presence in developing countries. We are not market timers. We're doing this because it builds a good foundation for the next century. Commercially, we are not concerned about our prospects in India. If we had concerns, we would not have been here.

What is the necessity of Moody's going for a equity stake in ICRA instead of a technical tie-up? Are you planning to increase stake in the company?

The investment in ICRA is a pure business decision. The equity stake will fetch us dividends and lead to an appreciationin the value of shares which would be important. A holder of debt security will be promised only a fixed return on his investment. We believe ICRA will grow with the Indian economy and our investment will, in turn, grow in value. Any plans to increase our stake in ICRA will depend on the view of its other 22 shareholders.

How much is a rating by Moody's is influenced by the United States government as many a time the Fed economists and your analysts talk almost the same language?

As far as US government's influence on our rating is concerned, it's zero. As our economists and analysts and the Feds have the same background -- same business schools, geographical locations and sources of information -- it is sometimes considered that both of us are talking in a similar language. Moody's people are trained in a certain way of economic thinking which is different from others. We are independent of US government's view on any country.