India slips in competitive index

India has slipped six notches to 48 over last year in a global ranking of competitiveness spread across 131 countries. It has lost ground due to lack of macroeconomic stability and proper infrastructure facilities, the World Economic Forum (WEF) said in its survey.

Some consolation can be derived from the fact that India is ahead of Russia (rank 58) and Brazil (72), but behind China (34) in the WEF’s Global Competitiveness Index 2007-08, released here today.

The United States topped the list as the world’s most competitive economy. India has also been ranked third in terms of domestic market size.

One reason for India’s rank dipping from 42 last year was due to nine new countries being included in the survey this year, taking the total number to 131.

The quality of the business environment in India has improved tangibly in recent years, with increased efficiency of the goods, labour and financial markets, and greater innovation and sophistication of company operations.

However, a number of weaknesses persist which need to be addressed especially in the area of infrastructure, said Fiona Paua, head (strategic insight teams), WEF.

India has also received positive remarks for the state of its business clusters and the availability of local suppliers, as well as its reliance on professional management rather than friends and relatives.

Though the WEF lauded India’s quality of management schools (ranked eighth globally) and the availability of top-quality scientists and engineers (ranked fourth), it also highlighted the country’s poor performance on various social indicators infant mortality (106), life expectancy (104) and malaria incidence (101).

Enrolment rates in the educational system remain low, with primary education also receiving poor marks for quality, the WEF said.

The report also said that a high government deficit was dragging the country down in the competitive ranking. A lack of macroeconomic stability is a competitive weakness, with a government deficit that places the country 125th and inflation in excess of 6 per cent at a time when inflation has been much reduced around the world, it added.

Source - Business-Standard