India has fallen 10 places to rank 68th on an annual global competitiveness index compiled by the Geneva-based World Economic Forum.
It is among the worst-performing BRICS nations along with Brazil, which was ranked 71st this year. BRICS is a grouping of Brazil, Russia, India, China, and South Africa.
The forum said India ranked high in terms of macroeconomic stability and market size. It added that India’s financial sector was relatively deep and stable despite the high delinquency rate, which weakens the soundness of the banking system.
India is also ranked high, at 15th place, in terms of corporate governance, and is at second place globally for shareholder governance. In terms of the market size, India is ranked third, while it has got the same rank for renewable energy regulation.
India is well ahead of emerging economies, and on a par with several advanced economies with regard to innovation. “Talent adaptability is critical,” said the forum. “It pays to enable the workforce to contribute to the technology revolution and to be able to cope with its disruptions. As innovation capacity grows in emerging economies such as China, India and Brazil, they need to strengthen their skills and labour market to minimize the risks of negative social spillovers.”
However, the World Economic Forum pointed out major shortcomings in some of the basic enablers of competitiveness. Limited ICT (information, communications and technology) adoption, poor health conditions, and low healthy life expectancy were among the metrics that were pushing down India’s competitiveness score, it added.
The forum said healthy life expectancy in India was one of the shortest outside Africa and significantly below the South Asian average. New Delhi was ranked 109 out 141 countries surveyed.
The World Economic Forum said India needed to grow its skills base even as its product market efficiency is undermined by a lack of trade openness and flaws in the labour market, which is characterised by a lack of protections for workers, insufficiently developed active labour market policies, and critically low participation of women.
Now, follow and debate the day’s most significant stories on Scroll Exchange.