India has fallen 10 places in the annual 'Global Competitiveness Index 2019' (GCI) , released by the World Economic Forum (WEF). India now stands at the 68th position globally in 2019, compared to the 58th position last year.
In this year's report, Singapore has overtaken the United States to be the most competitive economy in the world. All countries are ranked on a total attainable score of 100, with 141 countries and territories being in the fray.
Here is all you need to know about the report.
How Does The WEF Define 'Competitiveness?'
The WEF calls competitiveness:
...the attributes and qualities of an economy that allow for a more efficient use of factors of production
The concept, the report says, is rooted in growth accounting theory, which measures growth in labour, capital and total factor productivity (TFP).
What Is The Methodology Of the GCI?
The GCI is what is called a 'composite index'. It is based on 12 'pillars', which has 103 indicators distributed among them.
Select indicators include:
- Freedom of the press
- Social capital
- Electricity access
- Soundness of banks
The 103 indicators are then averaged to their respective pillar among these 12, with the final GCI score being an average of the 12 pillars.
How Has India Performed...
...among its neighbours?
India stands as the most competitive economy among its South Asian peers. Myanmar and Afghanistan have not been included in the index,
...and among BRICS nations?
India has been the only country among the BRICS countries (Brazil, Russia, India, China, and South Africa) which has a decreased score, and a decreased rank year-on-year.
World's 5 Most And Least Competitive Countries
The top five most competitive economies in the study are:
The least competitive economies in the study are:
Where Has India Fared Well, And Where Has It Lagged?
India's decline by 10 ranks in the report is attributed to a small decline in score, but moreover to a larger improvement in score by countries around it. Countries such as Colombia, Azerbaijan, Turkey and South Africa, whose ranks were in India's vicinity last year.
Vietnam, which ranks one position above India in the current survey, saw a its year-on-year position improve by 10 ranks.
India ranks high on the following indicators:
- Market size (3rd)
- Macroeconomic stability (43rd)
The report also recognises the stability of the Indian financial sector (at rank 40th), despite a 10% delinquency rate (106th). On innovation (35th) India is at par with certain developed economies and is ahead of most developing economies
However, the banking system (89th) shows a certain weakness with the financial system. ICT adoption (120th) has improved, but it still has a long way to go.
Life expectancy (109th) is among the lower than the South Asian average, and is the shortest outside Africa. The report says that India needs to also work on its skills base (107th). Further, a lack of trade openness (131st) and product market efficiency is something that India needs to improve, according to the report.
The report can be found here.
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