India has seen the biggest leap in ranking for any country in the World Economic Forum’s (WEF) global competitiveness index (pdf).
In the 2016-17 rankings, Asia’s third-largest economy ranked 39th among 138 countries. Last year, it was at 55.
The rankings consider factors and institutions that determine long-term economic growth and prosperity. Those that worked for India include market efficiency, business sophistication, and innovation, the report pointed out. On the other hand, problems such as tax regulation and corruption still hold the country back.
“Recent reform efforts have concentrated on improving public institutions, opening the economy to foreign investors and international trade, and increasing transparency in the financial system,” the WEF report, released on Sept.28, said. “Still, a lot needs to be done.”
The top three ranking countries were Switzerland, Singapore, and the US. China ranked 28th.
But even as India’s overall performance looks excellent, it is ranked low on some parameters such as health and primary education (rank 85). This doesn’t bode well for a country whose working-age population is estimated to be the largest in Asia-Pacific by 2050.
“Even on indicators where India has made progress, comparisons with other countries can be sobering: although life expectancy has increased, for example, it is still low by global standards, with India ranking only 106th in the world; and while India almost halved infant mortality, other countries did even better, so it drops nine places this year to 115th,” the report added.
Technology, too, is a weakness. India is one of the fastest-growing startup ecosystems in the world, and a lack of technological readiness is something that needs immediate attention.
The Narendra Modi government’s ambitious Digital India plan hinges on technology adoption in the country. “The country’s biggest relative weakness today is in technological readiness, where initiatives such as Digital India could lead to significant improvements in the next years,” the WEF report said.
Here’s how India performed in the 12 parameters that the WEF measured:
|Health and primary education||85|
|Higher education and training||81|
|Goods market efficiency||60|
|Labour market efficiency||84|
|Financial market development||38|
The WEF also indicated that the labour market needs some serious reforms. The Modi government has been working on it but in the recent past has met with resistance from trade unions, often resulting in protests and strikes.