India’s Global Competitiveness Shows Great Improvement: WEF Index
World Economic Forum’s (WEF) latest Global Competitiveness Report for 2016-17 ranked India on 39th position. This result shows biggest scale of improvement in competitiveness among all countries and is the second year in a row India has gone up 16 ranks in the WEF index. Compiled by Faiz Askari
NEW DELHI: A much needed acknowledgement, rather a progress report card for India, announced by World Economic Forum. According to the WEF’s Global Competitiveness Index report for 2016-17 India has risen rapidly in the global competitive stakes by climbing 16 notches to the 39th position during the past year. Experts believe that this sharp upsurge of India in this index is a result of multiple efforts and initiatives that Government of India has taken over last few years. Make in India, Digital India and several other initiatives contributed in this.
It suggests that improvements in institutions and infrastructure have increased overall competitiveness along with recent reforms such as opening the economy to foreign investors and increasing transparency in the financial system.
But here are some of the areas, the report highlighted, which needs attention from India’s standpoint.
Labour Market in India: A Concern
The report added that the labour market rigidities and the presence of large, public enterprises especially in the utilities and financial sector make the economy less efficient. Off lately, we witnessed that industry experts have come forward and expressed their perspective towards labour reforms in India.
However, the WEF Global Competitive Index emphasized, “The labor market is segmented between workers protected by rigid regulations and centralized wage determination, especially in the manufacturing sector, and millions of unprotected and informal workers. Lack of infrastructure and ICT use (where India is ranked 120th in the world) remain bottlenecks,” the report said, emphasising that progress in recent years has been slow and further investment is necessary to connect rural areas and ensure they equally benefit from and contribute to India’s development.
Oil Price Challenge
India’s competitiveness has improved, particularly in goods market efficiency, business sophistication and innovation, while lower oil prices and improved monetary and fiscal policies have made the economy not only stable, but also the fastest growing among G20 countries, the report noted.
“Still, a lot needs to be done… huge challenges lie ahead on India’s path to prosperity,” the report added, stressing that despite significant improvements in infrastructure and social indicators such as health and education over the past decade, it lags other nations on such parameters.
According to executives polled for the report, India’s tax regulations, corruption, tax rates and poor public health are the most problematic factors for doing business.
Government of India has shown to the world that their focus towards Digital India is long term and government machinery is found to be committed towards Digital India.
While India is the only South Asian economy in the top half of the rankings, Sri Lanka surprisingly ranks ahead of it in ‘technological readiness’ — one of twelve pillars on which countries are rated.
“The country’s biggest relative weakness today is in technological readiness, where initiatives such as Digital India could lead to significant improvements,” the report said. The efficiency of the goods market in India has also deteriorated over the past decade, and the WEF reckons this would change once the GST regime is implemented.
Also read GST in India