India has slipped 10 places, from 58th in 2018 to 68th in 2019 on GCI

The News:

• India has slipped 10 places to rank 68th on Global competitiveness index, compiled by Geneva-based World Economic Forum (WEF).

About: Global Competitiveness Index

• The World Economic Forum’s Global Competitiveness Index (GCI), launched in 1979, has been mapping the competitiveness landscape of 141 economies through 103 indicators organised into 12 pillars.
• It is a composite indicator that assesses the set of factors that determine an economy’s level of productivity – widely considered as the most important determinant of long-term growth.
• The 12 main drivers of productivity for the index:
  • Institutions
  • Infrastructure
  • Technological readiness
  • Macroeconomic context
  • Health
  • Education and skills
  • Product market
  • Labour market
  • Financial system
  • Market size
  • Business dynamism
  • Innovation

News Summary:

• As per the latest rankings, India has slipped 10 places, from 58th in 2018 to 68th in 2019.
• India is among the worst-performing BRICS nations along with Brazil (which has ranked 71st this time).
  • Note: BRICS is an acronym to represent Brazil, Russia, India, China and South Africa, seen as the world’s fastest growing developing economies.
• However, India is ahead of its neighbours Sri Lanka at 84th place, Bangladesh at 105th place, Nepal at 108th place and Pakistan at 110th place.

Parameters on which India performed well:

• Macroeconomic stability
• Market size
• Corporate governance
• Shareholder governance
• Market size
• Renewable energy regulation.
• Innovation: In Innovation, India is well ahead of most emerging economies and on par with several advanced economies.

Why India’s rank has slipped?

• There are major shortcomings in some of the basic enablers of competitiveness in India, which has led to India’s low ranking. These include:
  • Technological readiness: Information, communication and technology (ICT) adoption in India has been weak;
  • Health: Poor health conditions and low life expectancy
  • Labour market: Lack of worker rights’ protections, insufficiently developed active labour market politics and critically low participation of women with  female workers to male workers of 0.26.
  • The slowdown in the Indian economy is also having a negative effect on the country’s global rankings.
• Better performance by other countries: The improvements in economic and business activities in other world economies also led to India’s low ranking this year.

More from the latest report

Top Rankers of GCI 2019:

1. Singapore
2. United States
3. Hong Kong SAR
4. Netherlands
5. Switzerland

Asia-Pacific is most competitive region:

• The report showed that presence of many competitive countries in Asia-Pacific makes this region the most competitive in the world, followed closely by Europe and North America.
• China is ranked 28th (the highest ranked among the BRICS), while Vietnam is the most improved country in the region this year at 67th place.