India slips on competitiveness

It is in the midst of a full-blown financial crisis, but the United States continues to top the rankings of the best countries for global business for the second year in succession, according to the annual report Global Competitiveness Index (GCI) 2008-09, published by the World Economic Forum. India, on the other hand, slipped to the 50th place in the rankings this year from the 48th position last year.

The report says that India’s overall competitive position has been weakened by the macroeconomic instability— the government runs one of the highest budget deficits in the world, and the inflation rate has been high over the year. The country ranked 109th on macroeconomic stability. And despite being one of the fastest growing economies, insufficient health services and education are limiting a more equitable distribution of the benefits of India’s high growth rates.

Moreover, its labour market efficiency indicators are also poor, the report points out. Interestingly, among BRIC economies, India ranks only behind China, which comes in 30th in the GCI, up four positions from last year. The other two BRIC economies, Russia and Brazil, rank 51st and 64th, respectively.

—Manu Kaushik