Despite 16 point "jump" in India's competitiveness, it is very difficult to start business in India: WEF

By A Representative
Even as pointing out that, after five years of decline, India has “jumped” 16 ranks to 55th place in global competitive index, the World Economic Forum in its new report has said the situation on the macroeconomic front “remains worrisome.” While pointing out that India is the third biggest market in the world, up for grabs for global investors, the report finds the situation particularly bad on the social front, especially health and education.
The report, titled “Global Competitive Report 2015-16”, gives full mark to the “momentum initiated by the election of Narendra Modi, whose pro-business, pro-growth, and anti-corruption stance”, though at the same time underlines, “Business leaders still consider corruption to be the biggest obstacle to doing business in the country.”
While India may have jumped 16 places in the competitive index, the WEF the ranking at 55th of 140 countries, as against the 71st position in 2014-15, is till not good enough – after all, despite the “massive jump”, which follows five years of a decline on the list, India still ranks seven notches lower than it did in 2007, when the UPA government was strong and in power.
While agreeing that “inflation eased to 6 percent in 2014, down from near double-digit levels the previous year”, the report says, issues of “technological readiness” particularly need attention. India remaining “one of the least digitally connected countries in the world (120th, up one)”, it says, adding, “Fewer than one in five Indians access the Internet on a regular basis, and fewer than two in five are estimated to own even a basic cell phone.”
The report ranks India 114th on infant mortality rate (41.4 per 1000), one of the worst, out of 140 countries surveyed. It ranks India 107th in live expectancy at 66.5 years. Ranking 105th, the report states, there was 68.5 per cent of gross enrollment at the secondary level schooling. Then, India ranks No 100th in Internet access in schools.
Coming to other areas, the report says India ranks No 120th in flexibility of wage determination; 132nd in women in labour force, one of the wost the world; 102nd in the availability of latest technology; 102nd in firm-level technology absorption; 107th in individuals using Internet, and so on.
It is not just in the social sector that India remains a poor performer; it is equally poor in allowing businesses to start. Thus, the report finds that in number of procedures to start a business, India ranks No 129, in number of days to start a business it ranks No 110, in trade tariff as percentage of duty it ranks No 124, and in imports as a percentage of gross domestic product, it ranks No 116 .
The report has ranked Switzerland No 1, followed by Singapore, United States, Germany and the Netherlands. Among the BRICS nations, the report ranks China 28th, Russia 45th (up from 53rd a year ago), South Africa 49th (up from 46th a year ago), and Brazil 75th (down from 57th a year ago).
The Global Competitiveness Report 2015–2016, the 36th edition in the series, the index combines 114 indicators that capture concepts that matter for productivity. These indicators are grouped into 12 pillars: institutions, infrastructure, macroeconomic 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.
These are in turn organized into three subindexes, in line with three main stages of development: basic requirements, efficiency enhancers, and innovation and sophistication factors”, the report says, adding, “The three subindexes are given different weights in the calculation of the overall index, depending on each economy’s stage of development, as proxied by its GDP per capita and the share of exports represented by raw materials”, the report says.
Pointing towards the reasons why why it looked into health and primary education, the report says, “A healthy workforce is vital to a country’s competitiveness and productivity. Workers who are ill cannot function to their potential and will be less productive. Poor health leads to significant costs to business, as sick workers are often absent or operate at lower levels of efficiency. Investment in the provision of health services is thus critical for clear economic, as well as moral, considerations.”

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