.In a confidence booster to the Narendra Modi government for its economic and business policies, India has jumped 16 spots to 39th rank in the World Economic Forum's Global Competitiveness Index.
The index is calculated based on pillars such as institutions, infrastructure, macro economic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.
Here are five takeaways from the report:
1) Only India from South Asia among top half: "Six of the nine East Asian emerging economies feature in the top half of the Global Competitve Index rankings; among the six South Asian economies covered, only India achieves this feat," the report says.
2) Pakistan deteriorating: "Since 2007, the gap between the best - and worst performing economies in the (South Asian) region has increased in some of the drivers of competitiveness, mostly as a result of the deteriorating situation in Pakistan.... The quality of infrastructure has improved significantly (although from low levels) in India, Bangladesh, and Sri Lanka, while it stalls in Nepal and deteriorates in Pakistan. Pakistan is also the only economy that fails to improve its macroeconomic environment and health and primary education levels, falling behind other South Asian economies," the report says.
3) India poor in tech readiness: "Financial market development remains poor across the entire South Asian region, as does technological readiness; this last area improves significantly only in Bangladesh and Sri Lanka, which overtook India to become the best performer in this pillar in the region," the report says.
4) NDA government praised, profusely: "India’s competitiveness score stagnated between 2007 and 2014, and the economy slipped down the GCI rankings. Since the new government took office in 2014, India climbed back up the rankings to 39th in this edition of the Report, from 48th in 2007–2008," the report says. Assessing a decade of India's performance, it says, while health and basic education improved throughout the decade, improvement in infrastructure and institutional environment happened after the new government assumed office. So also is the case in macro economic conditions where global commodity price fall is also a contributing factor.
5) Bank NPAs problem revealed, but no solution: "...Financial market development is the pillar most dragging down India’s competitiveness compared to 10 years ago. Here the efforts of the Reserve Bank of India have increased transparency in the financial market and shed light on the large amounts of non-performing loans, previously not reported on the balance sheets of Indian banks. Banks have not yet found a way to sell these assets, and some need large re-capitalizations," the report says.