For a second time in row, India has successfully jumped 16 spots in Global Competitiveness index prepared by the World Economic Forum. It is the highest jump of any economy this year and is a big boost to Prime Minister Narendra Modi government’s reform initiatives.
World Economic Forum assess the competitiveness landscape of 138 economies in the global competitiveness index, providing understanding into the drivers of their productivity and prosperity. India succeeded in jumping from 55th place last year to 39th this year. We are also the second-most competitive among the BRICS nations behind neighboring country China, which ranked at the 28th position. This is the second time in a row India has jumped 16 spots in the index.
Switzerland topped the list for the eighth time in a row, becoming the most competitive economy. Singapore is second and the US is at third position. At fourth spot is Netherlands, followed in order by Germany, Sweden, the UK, Japan, Hong Kong and Finland. These are the world’s top ten economies. India has a score of 4.52 on the index while that of Switzerland is 5.81.
India has tremendously improved across the board, particularly, in goods market efficiency, business sophistication, and innovation. According to WEF’s Global Competitiveness Report 2016-17, it is all thanks to the improved monetary and fiscal policies along with lower oil prices that Indian economy has stabilized itself and is able to boast of its highest growth among the G20 countries. WEF added that a lot is still left to be done, as recent efforts have concentrated specifically on improving public institutions, opening the economy to foreign investors and international trade and increasing transparency in the financial system. It further noted that India has still a long way to go to realize its potential as a major global economy, because, the labor market in India is still bound by rigid regulations and centralized wage determination while infrastructure also remains a barrier.
The Global Competitiveness Index calculates the rankings based on country-level data covering 12 categories, which are, institutions, infrastructure, macroeconomic environment, health and primary education, financial market development, technological readiness, market size, business sophistication and innovation.
This year, a total of 138 countries got assessed for their competitiveness whereas, there were 140 countries assessed in the 2015-16 rankings. Globally, WEF said the degree to which economies are open to international trade in goods and service has been declining for 10 years and this could hurt prosperity in future.
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