India jumps 16 spots in Global competitiveness second time in a row

The Dollar Business Bureau

India has climbed 16 places to the 39th rank on the Global Competitiveness Index prepared by the World Economic Forum as improved business sophistication and goods market efficiency pushed its ranking higher.

Switzerland for the eighth straight time, topped the list,  as the most competitive economy while Singapore and US ranked at the second and third positions, respectively.

The jump 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 neighbouring China, which is ranked at the 28th position.

On the index, India has a score of 4.52 while that of Switzerland is 5.81. Netherlands is at the fourth spot, followed by Germany, Sweden, UK, Japan, Hong Kong SAR and Finland at the 10^th position.

According to WEFs Global Competitiveness Report 2016-17, 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 stabilised and now boasts of the highest growth among G20 countries,".

While recent reforms efforts have concentrated on improving public institutions, opening the economy to foreign investors and international trade and increasing transparency in the financial system, WEF said, "still, a lot needs to be done".

Further, the report noted that India is "still long way" from having in place all the competitiveness elements to realise its potential as a major global economy. Its labour market is bound by rigid regulations and centralised wage determination while infrastructure also remains a bottleneck, it added.

The rankings are based on the Global Competitiveness Index (GCI), which is based on country-level data covering 12 categories. These include institutions, infrastructure, macroeconomic environment, health and primary education, financial market development, technological readiness, market size, business sophistication and innovation.

This year, 138 economies have been assessed for their competitiveness while there were 140 economies in the 2015-16 rankings. Globally, WEF said the degree to which economies are open to international trade in goods and service has been declining for 10 years and this could hurt prosperity 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.”