India Drops 11 Places to #71 in the Global Competitiveness Report
There are high hopes surrounding the recent election of Narendra Modi as India’s PM but in the World Economic Forum’s latest Global Competitiveness Report 2014 – 2015, the country continued its slide in the rankings to fall another 11 places to land between Slovenia and Morocco. This is what the latest report had to say about the country:
Dropping for the sixth consecutive edition, India ranks 71st (down 11), the lowest of the BRICS economies. India’s slide in the rankings began in 2009, when its economy was still growing at 8.5 percent (it even grew by 10.3 percent in 2010). Back then, however, India’s showing in the GCI was already casting doubt about the sustainability of this growth. Since then, the country has been struggling to achieve growth of 5 percent. Overall, India does best in the more complex areas of the GCI: innovation (49th) and business sophistication (57th). In contrast, it obtains low marks in the more fundamental drivers of competitiveness, such as health and primary education (89th). The country’s health situation is indeed alarming: infant mortality (115th) and malnutrition incidence are among the highest in the world; only 36 percent of the population have access to improved sanitation; and life expectancy (110th) is Asia’s second shortest, after Myanmar. On a more positive note, India is on track to achieve universal primary education (78th), although the quality of primary education remains poor (88th) and it ranks a low93rd in higher education and training. Transport and electricity infrastructure are in need of upgrading (87th). Market competition and efficiency is affected by various barriers to entry and red tape (95th). For example, it takes 12 procedures (130th) and almost a month to register a business (106th). Businesses also face serious obstacles in the form of a high total tax rate (130th) and an inefficient and rigid labor market (112th). India’ slowest pillar rank is in technological readiness (121st). Despite almost ubiquitous mobile telephony, India is one of the world’s least digitally connected countries: only 15 percent of Indians access the Internet on a regular basis and broadband Internet, if available at all, remains the privilege of a very few. Furthermore, India’s fiscal situation remains in disarray (101st in the macro economic environment). With the exception of 2007, the central government has consistently run deficits since 2000. Because of the high degree of informality, its tax base is relatively narrow, representing less than 10 percent of GDP. In addition, over the past several years India has experienced persistently high, in some years near double-digit, inflation, which reached 9.5 percent in 2013(133rd). Improving competitiveness will help rebalance the economy and move the country up the value chain,ensuring more solid and stable growth; this in turn could result in more employment opportunities for the country’s rapidly growing population.
The Global Competitiveness Report 2014 – 2015 report can be downloaded on the World Economic Forum’s website.
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