Steve Waugh is a contented man. In India to fulfill obligations as brand ambassador for insurance company AMP-Sanmar, the 38-year-old former Australia captain, who called it a day in January, stopped by in Mumbai on Monday and enlightened the media on varied subjects, from being appointed Olympic torchbearer to the idea of a two-tier system for Test cricket.

Waugh will re-ignite the 2000 Sydney Olympics cauldron as the torch relay for the Athens Games winds through Australia at the start of its 78-day journey to Greece.

"I can't believe I have been chosen to do that. I can remember during the Sydney Olympics I was running and I had five thousand people cheering me on. To this day it remains one of the most cherished moments of my life. It is a massive honour and I am very fortunate to get a chance to do it again," he said.

For one who played cricket with an intensity matched by few on the field, his grit and resolve allowed him to retire from the sport on his own terms.

"Life after cricket is tough. But I have been kept busy with the games I play in and out of the house with my son, who has a keen interest in football and cricket. I am enjoying watching my children do things. My elder daughter is into ballet dancing. That's quite interesting too, while the younger daughter, who is only two, is quite a livewire too. I have played a little golf and tennis too."

Sourav Ganguly recently suggested that international cricket could be made even more interesting if the ICC introduces a two-tier system – separating the top nations from the minnows. Waugh agrees, though only in part.

"I think it's worthy of consideration. The two-tier system in ODIs is fine because the ICC is looking to inject a number of new teams into the system. So it might be interesting as there will be a lot of teams.

"But I am not too sure that it is a good idea for the Test arena as there are only nine-ten sides. The history of Test cricket has shown that there have always been weak sides in every era. New Zealand, for instance, took 26 years to win their first Test. And added to that I think the top sides would most probably get sick and tired playing each other all the time. I am also not too sure how teams will judge whether they have become good enough for the tough tier. I think we are getting a little bit carried away by a couple of struggling teams. We need to wait and give them time."

Australia will be playing the United States in its first match in the ICC Champions Trophy, in England in September. Many see it as a huge mismatch between the world champions and cricket's newest entrants.

"I think it is a good thing: America in world cricket. They have a huge population and I am sure the sport will find some takers. They will take a long time to get up to the standards required. They already have some foreign coaches helping and they should be welcomed into the ODI format. But Test cricket is something that may not happen. It's very hard to start from not knowing anything about cricket to learning about Test cricket."

The ICC has suggested a few changes in ODI cricket, regarding fielding restrictions and other technological aids for the umpires. But are these changes necessary? Is one-day cricket stagnating?

"I don't know about the proposals but I know that in Australia we have tried a number of things. We had 12 players in the side and the bowlers could go on and off. That was in for a number of years and that worked very well. I think most players would welcome the fact that you can do things differently. Perhaps one-day cricket does stagnate at times.

"But the ultimate judge is the crowd and the response they give the games. The response is still very good but a few changes will always help."

On his last tour of India with the Australian team, Waugh came up short in his conquest of the 'Last Frontier.' He maintains that he would have loved to win in India, but also says the statement was not made by him.

"First of all, I did not make the statement. It was made up by someone and attributed to me. It's a nice line, but I did not say it. I didn't play a lot of Test cricket in India.  We would have liked to play more but I am more than happy with what we have achieved in India. I played in what is most probably the best Test series ever last time; we won the World Cup in 1987, we had some success in Tests here. I am not disappointed, but at the same time would have loved to have won.

"Now that is a challenge that Ricky Ponting and the boys have to face. The Australia team has got to win it for themselves. They are playing as a group and for Australia. I'd love to see them win."

Following England's fine showing in the West Indies earlier this year and victory in the first Test against New Zealand at Lord's last week, some of the country's former cricketers are already suggesting that Michael Vaughan's team is the second-best in the world and it could challenge the Aussies in the next Ashes series. Asked if it is a typical case of the British overconfidence, Waugh replied: "Well, we have heard it before. England are improving and it's good for cricket. They no doubt see Australia as a massive challenge. In the past they have had their chances but have come up short against Australia. At the end of the day it's a question of how well they play against Australia, and I think Australia still have the edge."

Waugh concurred that competition among other cricketing nations for the number two position in world cricket has intensified.

"They all have improved greatly. But at the end of the day they are all aspiring to be number one. It's no good being number two. The competition between the sides is incredible too. India has waged some amazing battles with Australia at home and have improved all-round. Pakistan are unpredictable and always dangerous. South Africa, England and New Zealand are improving too. Australia are still a little way ahead. But I think the gap has definitely closed. But I don't think there is any pecking order among these teams, at least not at the present."

Australia's decision to cancel the Test series in Zimbabwe but continue with the one-dayers has not gone down very well with the former skipper.

"I am happy the Test series was cancelled. But the ODIs should also not have happened. I am a bit confused about the whole deal. But I guess the players have to do what the administration asks them too."