The annual World Competitiveness Index, spearheaded by the Institute for Management Development (IMD), based in Switzerland, was recently released. This report has brought some significant developments to light, particularly for India, which has observed the most pronounced rise among Asian economies. Notably, India has jumped six positions up from its previous 43rd place, largely owing to enhancements in economic performance.
Understanding The World Competitiveness Index
Established in 1989, the IMD World Competitiveness Yearbook (WCY) is a vital yearly report that serves as a global reference point on nations’ competitiveness levels. It assesses and ranks countries based on how they manage their competencies to sustain long-term value creation. The evaluation of a nation’s prosperity and competitiveness is done through four primary factors including economic performance, government efficiency, business efficiency and infrastructure.
An Overview of the Index Highlights
The recent index highlighted Denmark as the top performer globally, moving up from third place last year. Meanwhile, Switzerland slipped to the second position and Singapore reclaimed the third spot. Among Asian economies, Singapore, Hong Kong, Taiwan, China, and Australia made the list of top performers. Russia and Ukraine were not evaluated due to data reliability issues.
India’s Performance on the Index
India demonstrated considerable improvements across all parameters except infrastructure where it retained its rank at 49. It experienced significant advancements in economic performance, improving from 37th in 2021 to 28th in 2022. Similarly, in government efficiency, the nation moved up one place to 45th. In terms of business efficiency, there was an impressive jump from 32nd place in 2021 to 23rd in 2022.
Key Drivers for India’s Enhanced Performance
India’s boosted ranking can be attributed to various factors. These include major improvements in retrospective taxes, the deregulation of several sectors, and enhancements in the competitiveness of the Indian economy. India’s commitment to fighting climate change and achieving net-zero emissions by 2070, as pledged at the COP26 summit, also contributed positively to its ranking.
Identifying India’s Strengths and Weaknesses
Despite its notable advancements, India faces challenges like managing trade disruptions, energy security, maintaining high GDP growth post-pandemic and resource mobilization for infrastructure development. However, India’s economy also has many attractive elements for businesses including a skilled workforce, cost competitiveness, dynamism of the economy, high educational level and open, positive attitudes.
India’s Efforts to Enhance Its Competitiveness
India has made significant strides towards improving its manufacturing capacity and technological advancement. Examples include initiatives like Atmanirbhar Bharat and Make in India, which focus on domestic supply chains and heavy investment in manufacturing hubs. Also, the launch of the Production-Linked Incentive (PLI) Scheme aimed at boosting manufacturing capabilities and exports. To encourage technological progress, India’s Department of Telecom (DoT) has established task forces on 6G technology, and the Ministry of External Affairs ensures India’s active engagement in international forums on technology governance.
Striking a Balance for Progress
A nation balancing economic and social progress can boost productivity, competitiveness, and prosperity. Therefore, forging an environment that encourages businesses in both local and international markets while also enhancing the average citizen’s standard of living is a critical goal. Governments need to facilitate an environment characterized by efficient infrastructures, institutions, and policies that promote sustainable value creation.
Examining Global Gender Gap Index
The Global Gender Gap Report, published by the World Economic Forum (WEF), ranks nations based on the gender gap in health, education, economy, and politics. The 2021 edition also studied skills gender gaps associated with Artificial Intelligence (AI). India ranks 140th in the WEF Gender Gap Index-2021.