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India slips 10 places on global competitiveness index

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In News: (India slips Competitiveness Index)

  • India has slipped 10 places to rank 68th on Global Competitiveness Index, compiled by Geneva-based World Economic Forum (WEF).
India slips Competitiveness Index
India’s Overall Performance

News Summary: (India slips Competitiveness Index)

  • As per the latest rankings, India with a score of 61.4 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).
  • 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.
NOTE: BRICS is an acronym to represent Brazil, Russia, India, China and South Africa, seen as the world’s fastest growing developing 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:
    1. Technological readiness: Information, communication and technology (ICT) adoption in India has been weak;
    2. Health: Poor health conditions and low life expectancy;
    3. 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.

Parameters on which India performed well:

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

Top Rankers of the Global Competitiveness Index 2019:

  1. Singapore
  2. United States
  3. Hong Kong SAR
  4. Netherlands
  5. Switzerland
Asia-Pacific is the 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.

India slips Competitiveness Index
Global Rankings

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 organized 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:
    1. Institutions
    2. Infrastructure
    3. Technological readiness
    4. Macroeconomic context
    5. Health
    6. Education and skills
    7. Product market
    8. Labour market
    9. Financial system
    10. Market size
    11. Business dynamism
    12. Innovation

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