Corruption, Cumbersome Bureaucracy & Infrastructure Keeps India’s Global Competitiveness Down

India ranked 60th, a few places behind its Brazil and China and ahead of Russia, in the latest global competitiveness report. India, an economy the report by World Economic Forum classified as a ‘factor driven’ economy, did not improve its ranking as compared to the previous year. India has been overtaken by many countries as its downward journey in the index continued, said the report.

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The country’s supply of transport, ICTs and energy infrastructure remains largely insufficient and ill- adapted to the needs of the economy, said the report which added that the Indian business community often cites infrastructure as the single biggest hindrance to doing business, ahead of corruption and cumbersome bureaucracy.

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India has lost 15 places since 2006 while Sri Lanka gained 19 ranks. Philippines, once 40 places behind, is now ahead of India, said the report. India is now 29 ranks behind China, whereas it was only 8 places behind the country in 2006. China leads the BRICS economies by a wide margin, well ahead of South Africa (53rd), India (60) and Russia (64).

The overall index was compiled from sub indexes such as basic requirements (including institutions, infrastructure, macroeconomic environment, health and primary education), efficiency enhancers (Higher education etc) and innovation & sophistication factors like business sophistication and innovation.

India’s sustainable competitiveness is also characterized by concerns in both areas of sustainability, said the report. On the social sustainability side, India’s performance is hindered by lack of access to basic sanitation and health services for many of its citizens (only 35 percent of the population has access to improved sanitation). The report also pointed out that the country’s growing income inequality becomes hard to manage as the share of workforce in vulnerable employment and informal sector grows.

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India ranked 96th in the index of basic requirements, behind Brazil (79) and China (31). Educational institutions of India were ranked at 72, infrastructure at 85, macro economic factors at 110 and health and primary education education at 102 out of 148 economies that the report ranked.

In the efficiency enhancers ranking, India ranked at 42, with factors such as higher education, goods market efficiency, labor efficiency, technological readiness and financial market development contributing to the ranking. Financial market development was ranked at 19, contributing to overall better rankings.

Innovation and sophistication index ranked India at 41, behind countries like Japan (3), Israel (8) and China (34).

Other Highlights of the WEF Report

  • As of 2012, there were over 68 mobile telephone subscriptions per 100 population in India.
  • India ranked #32, in the quality of Math and science education while Singapore ranked #1 and Germany was 21.
  • India also ranked fairly well in the quality of Management schools at #30, ahead of Brazil (49) and close to South Africa (23).
  • When it comes to number of procedures required to start a business, India ranked way behind at the 129th position, closer to some of the other nations known to be highly bureaucratic.

Technological readiness

  • India’s rank at 58 for availability of Latest technologies was behind Israel (17) but ahead of Brazil (63) and Sri Lanka (72).
  • In the ranking of Internet users as of 2012, India ranked at 120, behind most countries such as China (78), Brazil (65) and Russia (62). Fixed broadband internet subscription per 100 population in India was one of the lowest at 1.1. Internet bandwidth was also one of the lowest with an average of 5.2 kb/s. The highest average Internet bandwidth was in Luxembourgh (4 Mbps) and Hong Kong (1.2 Mbps).
  • Mobile broadband subscriptions per 100 population in India was at 4.9, ranking the country at 99.

Full report here (pdf).

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