India up 16 places to 55th on global competitiveness index

Geneva: In a big jump, India has moved up 16 positions to rank 55th on a global index of the world’s most competitive economies, where Switzerland remains on top.

The jump in India’s position underlines the country’s recent economic recovery, improvement in the competitiveness of the country’s institutions and its macro economic environment and a “slight improvement” in infrastructure, the World Economic Forum (WEF) said in its latest Global Competitiveness Report.

Globally, Switzerland has retained its top position as the world’s most competitive economy for seventh year in a row and is followed by Singapore, the US, Germany and the Netherlands in the top-five. These are followed by Japan, Hong Kong, Finland, Sweden and the UK in the top ten.

Among emerging economies, India has ended five years of decline with a 16-place jump to 55th position. However, South Africa is ranked higher and it has re-entered the top 50, progressing seven places to 49th.

WEF said that the most problematic factors for doing business in India include corruption, policy instability, inflation and access to finance.

The areas where India ranks better were investor protection, gross national savings, quality of education system, venture capital availability, hiring and firing practices, GDP and domestic market size, public trust in politicians and burden of government regulation.

Elsewhere, macro economic instability and loss of trust in public institutions has dragged down Turkey (51st), as well as Brazil (75th), which posted one of the largest falls.

China, holding steady at 28, remains by far the most competitive among large emerging economies, although its lack of progress moving up the ranking shows the challenges it faces in transitioning its economy, the WEF said.

In terms of competitiveness of its institutions, India is ranked 60th (out of total 140 countries and up 10 positions from last year), while for infrastructure it has gained six places to 81st.

For macro economic environment, India is ranked 91st, helped by a reduction in commodity prices and improvement in the government’s budget deficit.

WEF further said, “To improve further, India must stay the course – its overall ranking is still hampered by one of the highest budget deficits in the world (131 out of 140).

“(Besides) the quality of its electricity supply which is still too low (91st) and, surprisingly for a country with so many IT champions, the overall technology readiness of its businesses, which comes in at a poor 120, up just one position on 2014.”

WEF said its survey of top executives also finds corruption followed by political instability and inflation, as the most problematic factor to doing business in the country.

The Geneva-based think-tank further said a failure to embrace long-term structural reforms that boost productivity and free up entrepreneurial talent is harming the global economy’s ability to improve living standards.

The study, released today, assesses 140 countries on the basis of factors driving their productivity and prosperity.