India's pledging of $10 billion dollars towards IMF's efforts in building up of a contingent reserves to help the euro zone debt issue should be taken in right earnest. BRICS nations comprising Brazil, Russia, India, China and South Africa have committed to step in with their funds after the existing funds of IMF were depleted towards the cause of helping Euro Zone countries comprising 17 nations.
THESE FIVE BRICS nations represent 43 percent of the world's population and about 18 percent of global economic output. These countries have about four trillion US dollars in combined reserves, with the big share held by export powerhouse China.
Foreign direct investment is also linked to the credit rating of a country. Credit rating agencies should be pleased with this gesture on behalf of India and therefore should revisit their method of rating the country's creditworthiness for the future. Reports on this subject matter indicate that BRICS nations contribution is linked to the foreign exchange reserves held by each nation. The support will not, however, be in the form of upfront payments. The monies will be made available to the Fund as bilateral loans or note purchase agreements.
BRICS unity was also evident in the group’s re-assertion of the decision to set up an exclusive development bank for their five countries.