World Competitiveness Index

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Recently, India maintained 43rd rank on an annual World Competitiveness Index.

About Index

• The World Competitiveness Index is compiled by the Institute for Management Development (IMD). It was first published in 1989.
• It is a comprehensive annual report and a worldwide reference point on the competitiveness of countries. It provides benchmarking and trends, as well as statistics and survey data based on extensive research.
• The index ranks 64 economies and assesses the extent to which a country promotes the prosperity of its people by measuring economic well-being through hard data and survey responses from executives. 
• It  measures the prosperity and competitiveness of 64 nations by examining four factors — economic performance, government efficiency, business efficiency, and infrastructure
  • This year, the rankings expose the economic impact of the pandemic across the globe.

Major Highlights 

• Top 5 Performers 
  • The index  was led by Switzerland, while Sweden has moved up to the second position 
  • Denmark has lost one place to rank third, the Netherlands has retained its fourth place and Singapore has slipped to fifth place (from first in 2020).

• Asian  
  • The top-performing Asian economies are, in order, Singapore (fifth), Hong Kong (seventh), Taiwan (eighth) and China (16th).

• BRICS nations
  • Among the BRICS nations, India is ranked second after China (16), followed by Russia (45th), Brazil (57th) and South Africa (62th)

• Indian 
  • India’s position has remained unchanged at 43 for the third year in a row.
  • India has maintained its position for the past three years but this year, it had significant improvements in government efficiency.
    • India’s improvements in the government efficiency factor are mostly due to relatively stable public finances (despite difficulties brought by the pandemic.
    •  In 2020 the government deficit stayed at 7 per cent) and to the positive feedback, it  registered among Indian business executives with respect to the support and subsidies provided by the government to the private companies
    • India’s strengths lie in investments in telecoms, mobile telephone costs, ICT services exports, remuneration in services professions and terms of trade index.
    •  India’s performance is the worst in sub-indices such as broadband subscribers, exposure to particulate pollution, human development index, GDP per capita and foreign currency reserves per capita among others..

• Factors responsible for better performance 
  • The report finds that qualities such as investment in innovation, digitalization, welfare benefits and leadership resulting in social cohesion have helped economies better weather the crisis, allowing them to rank higher in competitiveness.  

• The report said top-performing economies are characterised by varying degrees of investment in innovation, diversified economic activities, and supportive public policy, according to the experts at the World Competitiveness Center.
  • Strength in these areas prior to the pandemic allowed these economies to address the economic implications of the crisis more effectively
• Competitive economies succeeded in transitioning to a remote work routine while also allowing remote learning.
• Addressing unemployment has been fundamental.
• Countries that ensure the effectiveness of key public spending, such as public finance, tax policy, and business legislation, are seen as essential policies to relieve the pressure on the economies hit by COVID-19.

Source: FP