After five years of decline, India has moved up 16 positions to 55 place on a global index of world’s most competitive economies for the year 2015-16, with Switzerland topping the table for the seventh consecutive year.
“This dramatic reversal is largely attributable to the momentum initiated by the election of Narendra Modi, whose pro-business, pro-growth, and anti-corruption stance has improved the business community’s sentiment toward the government,” the World Economic Forum (WEF) said in its latest Global Competitiveness Report.
In the last year’s report, India stood at the 71st position.
However, despite leapfrogging 16 places this year, India still ranks seven notches lower than it did in 2007.
The Geneva-based think-tank stated that while the quality of India’s institutions is judged more favourably (60, up 10 places), business leaders still consider corruption to be the biggest obstacle to doing business in the country, followed by policy instability, inflation, access to finance, government instability and inadequate supple of infrastructure, among others.
Additionally, it said even though infrastructure in the country has improved (81st, up six places), it remains a major growth bottleneck, electricity in particular.
India’s performance in the macroeconomic stability pillar has improved, although the situation remains worrisome (91st, up 10 places). The inflation also eased to 6 per cent in 2014, due to lower commodity prices, down from near double-digit levels the previous year.
The government budget deficit has gradually dropped since its 2008 peak, although it still amounted to 7 per cent of GDP in 2014, one of the highest in the world (131st).
“The fact that the most notable improvements are in the basic drivers of competitiveness bodes well for the future, especially the development of the manufacturing sector. But other areas also deserve attention, including technological readiness,” it said, adding that India remains one of the least digitally connected countries in the world (120th, up one place).
Fewer than one in five Indians access the Internet on a regular basis, and fewer than two in five are estimated to own even a basic cell phone.
Globally, Switzerland is followed by Singapore, the U.S., Germany, the Netherlands, Japan, Hong Kong, Finland, Sweden and the UK in the top-ten.
