India’s global competitiveness ranking slides to 60th position in 2013-14
India ranks at 60th amongst 148 economies in the Global Competitiveness Index (GCI)
for 2013-14, which has declined from 59th position out of 144 economies in 2012-13.
Snapshot of the ‘Global Competitiveness Report 2013-14
According to the Global Competitiveness Report 2013-2014, excellent innovation and
strong institutional environments are increasingly influencing economies’
competitiveness. Amongst BRICS, the People’s Republic of China (29th) continues to
lead the group, followed by South Africa (53rd), Brazil (56th) India (60th) and Russia
(64th). Down one position, India now ranks 60th, continuing its downward trend that
began in 2009. With a GCI score essentially unchanged since then, India has been
overtaken by a number of countries. Once ahead of Brazil and South Africa, it now trails
them by several places and is behind China by a margin of 31 positions, while Russia
(64th) has almost closed the gap. The report suggests that some of the world’s largest
emerging market economies must engage business, government and civil society to
implement long-overdue reforms.
India continues to disappoint in the areas which are considered to be the basic factors
underpinning competitiveness. The country’s supply of transport, ICTs, and energy
infrastructure remains largely insufficient and ill-adapted to the needs of the economy
(85th), despite the steady improvement that has been made since 2006. The Indian
business community repeatedly cites infrastructure as the single biggest hindrance to
doing business. The report further noted that notwithstanding improvements across the
board over the past few years, very poor public health and education levels (102nd)
remain a prime cause of India’s low productivity. The quality of higher education is
better, but enrolment rates at that level remain very low, even by developing country
standards.
Meanwhile, the situation has deteriorated further on the macroeconomic front, with
India now 110th in this pillar. The inflation rate and public deficit-to-GDP ratio were
dangerously close to double digits in 2012, and the debt to- GDP ratio is the second
highest among the BRICS. Indeed, a March 2013 survey of sovereign debt analysts
reveals an increased risk of sovereign debt default over the previous year. Another
major concern is the country’s low level of technological readiness (98th). Although
businesses adopt new technologies relatively promptly (47th), penetration rates of fixed
and mobile Internet and telephony among the population remain among the lowest in
developing Asia.
Global Competitiveness Index Ranking 2013-14
India’s
Components & India’s rankings Pillars
Rank
Institutions 72
Infrastructure 85
Basic requirements (Rank 96)
Macroeconomic environment 110
Health and primary education 102
Higher education and training 91
Goods market efficiency 85
Labor market efficiency 99
Efficiency enhancers (Rank 42)
Financial market development 19
Technological readiness 98
Market size 3
Business sophistication 42
Innovation and sophistication factors (Rank 41)
Innovation 41
Global Competitiveness Index (out of 148 economies) 60
Source: PHD Research Bureau compiled from Global Competitiveness Report for 2013-14, World Economic Forum
India’s sustainable competitiveness is also characterized by concerns in both areas of
sustainability. On the social sustainability side, India’s performance is hindered by lack of
access to basic sanitation and health services for many of its citizens (only 35% of the
population has access to improved sanitation). Also, despite the introduction of the
National Social Assistance Programmes (NSAP) in 1995, the share of population covered
by the social safety net is still relatively small. This issue, combined with a large informal
sector and a high share of the workforce in vulnerable employment, makes it difficult to
manage the country’s growing income inequality. Altogether these structural issues
make India’s competitiveness vulnerable to shocks. India’s environmental performance
also hinders the achievement of sustainable competitiveness. A high level of emissions
(especially in terms of particulate matter concentration) and few protected areas are
wearing down the quality of the natural environment. Additionally, high agricultural
water-use intensity is depleting water tables because usage is above their regenerative
capacity.
Warm Regards,
Dr. S P Sharma
Chief Economist
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PHD Research Bureau
PHD Chamber of Commerce and Industry
August Kranti Marg, New Delhi – 110016
Tel 91 11 49545454, Fax 91 11 26855450,
E mail – research@[Link]
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