Weighed down by challenging economic conditions for most part of the past year, India has slipped to 71st position - the lowest among BRICS countries - in an annual global competitiveness list, with Switzerland claiming the top spot.
The annual list, released on Wednesday by Geneva-based World Economic Forum (WEF), comes at a time when the new Indian government has completed 100 days in power and has promised further steps to revive its economy and the ease of doing business in the country.
“Continuing its downward trend and losing 11 places, India ranks 71st. The country’s new government faces the challenge of improving competitiveness and reviving the economy, which is growing at half the rate of 2010,” WEF said.
As per the >Global Competitiveness Report 2014-15 , Switzerland is the most competitive economy, followed by Singapore.
Other countries in the top ten are Finland (4), Germany (5), Japan (6), Hong Kong SAR (7), Netherlands (8), United Kingdom (9) and Sweden (10).
China, which has improved its position by one place to 28th spot, leads the BRICS grouping, among which India has the least ranking. Russia is ranked at 53rd position, followed by South Africa (56) and Brazil (57).
“India’s decline of 11 places to 71st, set against the gains of the ASEAN 5 countries, suggests that the competitiveness divide South and Southeast Asia is becoming more pronounced,” WEF said.
Besides India, WEF said that some of the world’s largest emerging market economies continue to face difficulties in improving competitiveness. These include Saudi Arabia (24th rank), Turkey (45), Mexico (61), Nigeria (127th), South Africa and Brazil - all of them have slipped in their rankings.
According to the report, India’s slide in the competitiveness rankings began in 2009, when its economy was still growing at 8.5 per cent (it even grew by 10.3 per cent in 2010).
“Back then, however, India’s showing in the Global Competitiveness Index (GCI) was already casting doubt about the sustainability of this growth.
“Since then, the country has been struggling to achieve growth of 5 per cent. The country has declined in most areas assessed by the GCI since 2007, most strikingly in institutions, business sophistication, financial market development, and goods market efficiency,” it added.
Noting that improving competitiveness would yield huge benefits for India, WEF said it would help re-balance 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,” it added.
WEF further said that India needs to create a sound and stable institutional framework for local and foreign investors as well as improve connectivity.
The rankings are based on WEF’s GCI which is based on scores covering 12 categories.
They are institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.
“The strained global geopolitical situation, the rise of income inequality, and the potential tightening of the financial conditions could put the still tentative recovery at risk and call for structural reforms to ensure more sustainable and inclusive growth,” WEF Founder and Executive Chairman Klaus Schwab said.
As per the report, there is uneven implementation of structural reforms across different regions and levels of development as the biggest challenge to sustaining global growth.
Talent and innovation are the two areas where leaders in the public and private sectors need to collaborate more effectively in order to achieve sustainable and inclusive economic development, it added.
“The leading economies in the index all possess a track record in developing, accessing and utilising available talent, as well as in making investments that boost innovation.
“These smart and targeted investments have been possible thanks to a coordinated approach based on strong collaboration between the public and private sectors,” the report said.