Is India Ready to Rescue the Beleaguered Euro Nations?
With foreign exchange reserves mounting from $749 million to $312.231 billion last month, based on Reserve Bank of India statistics, India is another candidate from the emerging economies of Asia that could contribute to resolving the financial woes of the euro zone.
Finance Minister Pranab Mukherjee told Reuters recently that his government could consider this option if only European policymakers can make a convincing case for getting their house in order.
However, like China, it has remained tight-lipped regarding the issue of purchasing European Financial Stability Facility bonds.
In fact, U.S. President Barack Obama has referred to India as an emergency power and reliable global authority in the whole of Asia.
The Voice of America reported that India's rate of economic growth is returning to the high levels of the years prior to the global financial crisis. Although there are concerns that high inflation could slow down the momentum, the country's economy grew by 8.6 percent in the first three months of the year.
This is the fastest pace since the global financial crisis triggered a slowdown, hastily bringing to an end the development that India had been experiencing before 2008.
The debt crisis affecting EU member nations is also a chief concern. Economists believe that the flow of foreign investment funds will slow if the European crisis undermines global growth. Europe is a key trading partner for India, accounting for one fifth of its exports.
India is also faced with domestic problems of its own. Policy makers say high growth is critical if the country is to tackle widespread poverty among its 1.2 billion people. India is among the world's fastest growing economies, but millions of people still subsist on less than $2 a day.