During the past year in the World Economic Forum’s (WEF) Global Competitiveness Index, in a confidence booster to the Narendra Modi government for its economic and business policies, India has risen rapidly among all countries by climbing 16 notches to the 39th position.
The WEF’s global competitiveness index assesses the competitiveness landscape of 138 economies. The index is calculated based on pillars such as infrastructure, institutions, health and primary education, macro economic environment, goods market efficiency, higher education and training, financial market development, labor market efficiency, market size, technological readiness, innovation and business sophistication.
The leap of 16 places for India from last year’s 55th place is the highest for any economy this year. India is also the second-most competitive among BRICS nations behind neighboring China, which is ranked at the 28th position. This is the second year in a row India’s ranking has jumped 16 spots in the index.
It suggests that improvements in infrastructure and institution have increased total competitiveness along with recent reforms such as increasing transparency in the financial system and opening the economy to foreign investors.
On the index, Switzerland’s score is 5.81 while India has a score of 4.52. And so, for the 8th straight time Switzerland is in top position followed by, Singapore and the US as 2nd and 3rd position.
Netherlands is at 4th position, Germany at 5th, Sweden at 6th, the UK at 7th, Japan at 8th, Hong Long SAR at 9th and Finland at 10th position.
According to the report, India’s “competitiveness has improved across the board, in particular in goods market efficiency, business sophistication, and innovation”. “Thanks to improved monetary and fiscal policies as well as lower oil prices, the Indian economy has stabilized and now boasts of the highest growth among G20 countries.”
The report also says, “Six of the nine East Asian emerging economies feature in the top half of the Global Competitive Index rankings; among the six South Asian economies covered, only India achieves this feat.” “The country’s biggest relative weakness today is in technological readiness, where initiatives such as Digital India could lead to significant improvements.”
“…Financial market development is the pillar most dragging down India’s competitiveness compared to 10 years ago. Here the efforts of the Reserve Bank of India have increased transparency in the financial market and shed light on the large amounts of non-performing loans, previously not reported on the balance sheets of Indian banks. Banks have not yet found a way to sell these assets, and some need large re-capitalizations.”
“Still, a lot needs to be done… huge challenges lie ahead on India’s path to prosperity.”
This year, 138 economies have been assessed for their competitiveness while there were 140 economies in the 2015-16 rankings.
Planetary, WEF said that the degree the economies which are open to global trade in service and goods has been declining for 10 years and this could hurt economic condition in future.
WEF founder and executive chairman, Klaus Schwab said, “Declining openness in the global economy is harming competitiveness and making it harder for leaders to drive sustainable, inclusive growth.”