Relevance: Mains: G.S paper III: Report and index
India slipping on the global competitiveness index is worrisome, structural reforms are now urgent
- India sliding 10 places in the global competitive index is a problematic trend, but, as argued by this paper earlier (bit.ly/314xAsb), it is the cost of doing business and the risk of doing business that matter more than the ease of doing business.
- Even if a Delhi or a Mumbai has managed to make it easier for a company to get a power connection, that can hardly be the reason behind an MNC, Indian or otherwise, deciding to invest here. This may also hold for the global competitiveness index.
In the latest rankings, the country held its position in terms of macro stability and market size, but factors like ICT adoption and mean years of schooling that is keeping it down.
Although the report does highlight rising NPAs and trade to be irritants as well—India is ranked 106 of 140 countries in terms of non-performing loans and 131 in trade openness—primarily, it is structural problems concerning education, etc, that need to be addressed, and data highlights that India has made progress on these terms.
But what is worrisome is its standing amongst its peers. A primary reason for India’s dramatic fall in the rankings is not the country’s own failings, but others fixing these problems more efficiently.
So, while India witnessed a marginal dip from 61 to 62 in 2018, others like Vietnam have done better in terms of performance.
India may be the leader in South Asia—at 68, it ranks higher than Sri Lanka (84), Bangladesh (105) and Pakistan (110), but it is the second-worst performer in the BRICS grouping. Competitors gaining a considerable lead does highlight an issue—with China ceding space, India would have to do better to attract global investment.