India’s score fell in eight out of 12 parameters while other countries improved their domestic business environment faster than India. Iran (99) is the only other country out of 141 countries surveyed whose ranking also fell by 10 positions.
“India, in 68th position, loses ground in the rankings despite a relatively stable score, mostly due to faster improvements of several countries previously ranked lower," the WEF said.
Countries like Colombia (57), Azerbaijan (58), South Africa (60) and Turkey (61) surpassed India in this year’s survey.
In the overall competitiveness ranking, Singapore replaced the US to take the first position. In South Asia, India is followed by Sri Lanka (84), Bangladesh (105), Nepal (108) and Pakistan (110). India trails China by 40 places and 14 points even though China’s position remained unchanged from last year’s survey at 28.
The WEF ranking comes ahead of the World Bank Doing Business ranking which is expected to be released later this month. India climbed 23 places to 77 among 190 countries in the World Bank survey last year.
In the Global Competitiveness Index, India ranks below 100 on five parameters, and features in the top 50 in just four. However, it ranks high on macroeconomic stability (43) and market size (3). WEF said India’s financial sector (40) is relatively deep and stable despite the high level of loan defaults (106), which contributes to weakening the soundness of its banking system (89).
India performs well when it comes to innovation (35), ahead of most emerging economies and on par with several advanced economies. This contrasts with major shortcomings in some of the basic enablers of competitiveness. ICT (information and communications technology) adoption is limited (120) but has improved sharply by 8 positions since the 2017 edition.
India had mixed results on various aspects of governance (59). Transport (28) and electricity (103) infrastructure have improved significantly over the past two years, though from a low base. The electrification rate was almost 90% in 2017, up 7 percentage points from 2015. At the same time, health conditions remain poor, as reflected in low healthy life expectancy (59.4 years, 109th), which is one of the shortest outside Africa and significantly below the South Asian average.
WEF said India must grow its skills base (107). “Product market efficiency (101st) is undermined by a lack of trade openness (131st) and the labour market is characterised by a lack of worker rights’ protections, insufficiently developed active labour market policies, and critically low participation of women," it said.
For least-developed and emerging economies, WEF said their fragile economic foundations make them highly vulnerable to shocks. With extreme poverty reduction decelerating and nearly one-half of humanity still struggling to meet basic needs, the report suggests the need for sustained, productivity enhancing economic growth remaining critical for improved living standards.