New Delhi: Bad news on the economic front seems to be knocking at the doors of the Narendra Modi government almost every day. On Wednesday, a report showed India diving 10 places down on the Global Competitiveness ranking for 2019, at 68 out of 141 countries. The rankings are compiled by the Geneva-based World Economic Forum (WEF).
This is a clear reflection of the economic slowdown impacting the country’s global rankings, even as Prime Minister Modi’s Bharatiya Janata Party keeps hyping India’s ‘improved’ image on foreign shores, more so after the PM’s recent ‘Howdy Modi’ extravaganza in Houston in the US.
According to reports, in 2018, India ranked 58th in the annual Global Competitiveness Index. This year, though, it is among the worst-performing BRICS (Brazil-Russia-India-China-South Africa) nations along with Brazil, which has ranked 71 this time.
Releasing the Global Competitiveness Report 2019: How to end a lost decade of productivity growth, the WEF noted that the “world economy remains locked in a cycle of low or flat productivity growth despite the injection of more than $10 trillion by central banks.”
The report, which paints a gloomy picture, also shows that “those countries with a holistic approach to socio-economic challenges, look set to get ahead in the race to the frontier.”
The report said “some of this year’s better performers appear to be benefiting from global trade tensions through trade diversion, including Singapore (1st) and Viet Nam (67th), the most improved country in 2019.”
It said several countries, such as India, China and Brazil, which have increasing innovation capability, need to improve their talent base and the functioning of their labour markets.
While India's rank was as high as 15th in terms of corporate governance and it ranked second in the world for shareholder governance, the WEF report pointed out certain shortcomings, too, such as “weak” adoption of information, communication and technology and poor socio-economic indicators, such as low life expectancy and poor health conditions of the vast majority of the people, which affected India’s competitiveness rankings.
In terms of healthy life expectancy, India has been ranked 109 out of a total of 141 countries surveyed.
“Sustained economic growth remains the surest route out of poverty and a core driver of human development,” it said.
The study also urges India to grow its skill base and free up the market in terms of trade activities. It also highlights how the lack of worker rights' protections, insufficiently developed active labour market politics and critically low participation of women affected India's competitiveness ranking.
Noting that “economic growth does not happen in a vacuum,” the report said some “basic building blocks” were required to jumpstart the development process, and more were needed to sustain it.
“So as monetary policies begin to run out of steam, it is crucial for economies to rely on fiscal policy and public incentives to boost research and development, enhance the skills base of the current and future workforce, develop new infrastructure and integrate new technologies,” said the report.
The WEF report ranked India 128th when it comes to the ratio of female workers to male workers at 0.26.
Despite the Modi government’s flagship Skill India Mission and setting up of a separate ministry, its skills rank was a dismal 107, even though it was ahead of its neighbours Sri Lanka at 84th place, Bangladesh at 105th place, Nepal at 108th place and Pakistan at 110th place.
The Global Competitiveness Index (GCI), launched in 1979, has been mapping the competitiveness landscape of 141 economies through 103 indicators organised into 12 pillars for almost 40 years.
“The Global Competitiveness Index 4.0 provides a compass for thriving in the new economy where innovation becomes the key factor of competitiveness,” Klaus Schwab, founder and executive chairman of WEF, said in a release.
Noting that the “unfolding climate crisis requires urgent, decisive and coordinated action by policy-makers,” the WEF said “supporting economic growth at all costs can no longer be a sole objective.”