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India's 25 most competitive cities

Last updated on: December 10, 2010 17:08 IST

India's 25 most competitive cities

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Rediff Busines Desk


The City Competitiveness Report unveiled by the Institute for Competitiveness is a comprehensive study of India's major cities.

The report's competitiveness ranking is based on the Porter's Diamond Model, which is a benchmark model based on the seminal work on strategy and competitiveness by Michael E Porter, Bishop William Lawrence University Professor, based at Harvard Business School and used widely by leading academic institutions across the world.

The model proposes that four interlinked advanced factors -- demand conditions, factor conditions, context for firm strategy and rivalry and supporting and related industries -- are instrumental in determining competitiveness for a particular region or country.

A city would need to improve along all these factors to increase its competitiveness. Each of these factors is further divided into sub-indices, which in turn are measured through indicators.

The India City Competitiveness Report 2010 uses hard data published by the government through reports disseminated by the various ministries, government-funded research organisations and other credible organisations to eliminate the possibility of personal bias or sampling errors.

Over 800 indicators were used to measure the competitiveness of Indian cities.

The Institute for Competitiveness is an international think tank dedicated to conducting and disseminating meaningful research in the core fields of strategy, economic development, productivity and prosperity in order to create value for all.

So check out which are the most competitive cities in India. Click NEXT to read on . . . 


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1. Delhi

According to the City Competitiveness Report, Delhi ranks No.1. It is the most competitive city in India in 2010.

With an overall competitive score of 82.55, and an infrastructure score of 75.71, Delhi leads all other cities in competitiveness.

The national capital was the most competitive city to do business in the country, as per the report, which based its findings on the metropolitan's infrastructure and business environment.

According to the City Competitiveness report by the Institute for Competitiveness, Delhi is the most competitive.

'Its position is augmented by its surrounding hinterland forming the National Capital Region (NCR) and an improved physical infrastructure and an enabling business environment,' the report noted.

The national capital has the second highest GDP in the country. And although it cannot rival Mumbai in terms of contribution to the growth of the Indian economy, Delhi is no pushover. It contributes 4.94 per cent to all-India GDP.

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2. Chennai

Chennai ranks number 2 in India's most competitive cities list.

Chennai has been benefited by a steady performance across all the sub-indices used in this report, and particularly by its educated workforce and logistics infrastructure.

Chennai, the capital of Tamil Nadu, the fourth largest metropolitan city in India, has an estimated population of 7.5 million.

With an overall competitive score of 77.87, and an infrastructure score of 72.32, Chennai is second.

The economy of the city is supported by industries like automobile, technology, hardware manufacturing, and healthcare.

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3. Mumbai

With an overall competitive score of 77.58, and an infrastructure score of 72.19, Mumbai ranks 3rd.

Mumbai dropped to 3rd place from the 2nd place last year. Mumbai's drop in ranking is primarily owing to a decline in its physical infrastructure.

Mumbai, India's commercial capital, is not only the city with the highest GDP in India, it also ranks among the world's top ten trade centres. The city contributes 25 per cent of industrial output and 70 per cent of capital transactions to India's economy.

The city accounts for about 1 per cent of the total population in India but has a per capita income which is almost three times that of India. Mumbai accounts for 14 per cent of India's income tax collections and 37 per cent of the corporate tax collections in the country.

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4. Bengaluru

What was knows as the Pensioners' Paradise some years back, has grown 10-fold today and a study reveals that the rupee millionaire club in Karnataka's capital is the most crowded in India. Bengaluru also boasts of having the largest number of households with an annual income of Rs 10 lakh (Rs 1 million) or more.

With an overall competitive score of 69.35, and an infrastructure score of 64.78, Bengaluru is 4th.

With an estimated population of 6.5 million, Bengaluru is one of India's most populous cities. Its main business activity is information technology and information technology-enabled services.

Being the leading contributor to India's IT industry, the city is often referred to as the Silicon Valley of India. Software majors Infosys and Wipro are headquartered here.

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5. Kolkata

Kolkata, the capital of West Bengal, has a population of over 15 million. Like its many other metropolitan cousins, Kolkata suffered from economic stagnation in post-independence India.

However, since 2000, the city has witnessed an economic rejuvenation, thanks to the development of IT industry in Rajarhat in Greater Kolkata. The city's IT sector is growing at 70 per cent yearly -- twice that of the national average.

With an overall competitive score of 64.94, and an infrastructure score of 63.03, Kolkata is 5th.

The city has seen a surge of investments in the housing infrastructure sector. Several new projects have come up in recent times.

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6. Hyderabad

With an overall competitive score of 61.47, and an infrastructure score of 59.72, Hyderabad is sixth.

Hyderabad, the financial capital of Andhra Pradesh, is also known as the city of pearls. With an estimated population of 7 million, the city is the biggest contributor to Andhra Pradesh's gross domestic product, state tax and excise revenues.

Hyderabad, which used to be primarily a service city, is now the seat of many businesses, including trade, transport, commerce, storage, communication and lately IT.

Major pharmaceutical companies like Dr Reddy's Laboratories, Matrix Laboratories, Aurobindo Pharma Limited and Vimta Labs are located here.

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7. Ahmedabad

Ahmedabad is the largest inland industrial centre in Gujarat and has been an important base of commerce, trade and industry. Ahmedabad has seen great prosperity because of its proximity to Surat and its access to the hinterland of Gujarat.

Though dusty roads and bungalows used to dot the city once, Ahmedabad is now witnessing a major construction boom and an increase in population. In recent years, the city has seen a significant rise in information technology and scientific industries.

With an overall competitive score of 59.57, and an infrastructure score of 64.25, Ahmedabad is the seventh most competitive Indian city.

Apart from these, chemicals and pharmaceutical industries contribute to the state's economic growth, with two of the biggest pharmaceutical companies of India -- Zydus Cadila and Torrent Pharmaceuticals being based here.

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8. Pune

The growth of this major industrial city, located roughly 150 km east of Mumbai, has become the topic of discussion these days.

Starting from automobile majors like Tata Motors, DaimlerChrysler, Pune will soon house units of global biggies like General Motors, Volkswagen, Fiat, et cetera. A number of important engineering goods industries like Cummins Engines Co Ltd and Bharat Forge Ltd, electronic goods companies like LG, Whirlpool, food companies like Frito Lay and Coca Cola are also located here.

With an overall competitive score of 59.18, and an infrastructure score of 57.63, Pune is the 8th most competitive city in India.

Of late, Pune's software industry has grown by leaps and bounds. IT parks like Rajiv Gandhi IT Park at Hinjewadi, Magarpatta Cybercity, MIDC Software Technology Park at Talawade, Marisoft IT Park at Kalyani Nagar are seats of technology that the city can boast of.

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9. Nagpur

Nagpur, the City of Oranges and the second capital of Maharashtra, boasts of superb infrastructure, excellent educational institutions, and a booming services hub.

It is one of the fastest growing Indian cities with a strong trading community. Nagpur is the biggest centre of commerce in the Vidarbha region.

With an overall competitive score of 54.87, and an infrastructure score of 55.28, Nagpur is India's ninth most competitive city.

The real game changer for India's overall performance, as per the report are the tier 2 and tier 3 cities, some of which are outperforming the metros along certain sub-indices.

Ahmedabad, is performing well in administrative efficiency and governance, and Pune's ranking is benefited by good physical attributes and strong institutional support for industry.

Nagpur and Indore, too, have increased in competitiveness substantially since last year, by 4 and 3 ranks respectively.

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10. Jaipur

With an overall competitive score of 54.63, and an infrastructure score of 55.13, Jaipur is the 10th most competitive Indian city.

The pink city of India, Jaipur, is famous for gems and jewellery, food products and garments. It comes second among all cities in terms of gems and jewellery manufacturing. Overall it ranks ninth.

"Based on the findings this year, it is clear that Indian cities are yet to develop a clear vision of their future and identify a definite competitive edge.

"Policy makers, too, are struggling with ways of managing infrastructural and developmental challenges that plague even the most competitive Indian cities. It is more important than ever for Indian cities to put into place the fundamentals underpinning economic growth and development in order to propel overall growth for the country as a whole," Institute for Competitiveness honorary chairman Amit Kapoor said.

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11. Chandigarh

The capital of the states of Punjab and Haryana, Chandigarh is one of the best planned cities in India.

It is ranked 3rd in purchasing power, 4th in housing options, 8th in economic environment, 9th in education and 10th in healthcare. It falls in terms of safety at 29th position.

With an overall competitive score of 54.53, and an infrastructure score of 57.37, Chandigarh is 11th in the list.

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12. Surat

Surat is Gujarat's second largest city with a population of 4 million. It is the fastest growing Indian city in terms of economic prosperity. The city has registered an annualised GDP growth rate of 11.5 per cent over the past seven fiscal years, according to the data compiled by economic research firm Indicus Analytics.

With an overall competitive score of 54.38, and an infrastructure score of 55.03, Surat ranks 12th.

Known for its thriving diamond and textile industry, Surat is situated on the banks of the Tapti river. More than 90 per cent of world's diamonds are cut and polished here.

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13. Gurgaon

Gurgaon is the one of the most-preferred cities in India for entrepreneurs.

Gurgaon has in the last few years received huge amounts of foreign direct investment, especially in the ITeS sector. Gurgaon was ranked as the best city in India to set up a software unit or a BPO centre.

With an overall competitive score of 53.91, and an infrastructure score of 53.29, Gurgaon is 13th most competitive.

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14. Indore

With an overall competitive score of 53.86, and an infrastructure score of 53.65, Indore is 14th.

Indore is a fast growing city in Madhya Pradesh and a major business centre in central India.

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15. Coimbatore

Coimbatore houses a large number of small and medium texitle mills, and is a major centre for auto components, pump manufacturing and also ITeS firms.

With an overall competitive score of 53.34, and an infrastructure score of 55.97, Coimbatore is 15th most competitive Indian city.

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16. Kochi

The 'Queen of the Arabian seas', Kochi is the second largest city in Kerala. The commercial hub of Kerala, it also has one of the major seaports.

With an overall competitive score of 53.21, and an infrastructure score of 51.95, Kochi comes next at 16th.

The city is ranked third in education and health facilities. However, it falls in safety, housing options and economic environment.

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17. Noida

With an overall competitive score of 53.20, and an infrastructure score of 53.18, Noida ranks 17th.

New Okhla Industrial Development Authority, or Noida, is a thriving business centre for numerous multinationals in the IT services sector.

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18. Goa

It is not surprising that India's tourism hotspot, Goa is among the top ten liveable places in India.

Goa is ranked at 4th position in terms of socio-cultural political environment, purchasing power, 7th in healthcare facilities and 13th in education. It scores low on safety and economic environment.

With an overall competitive score of 53.10, and an infrastructure score of 55.40, Goa is next at no. 18.

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19. Shimla

The capital of Himachal Pradesh, Shimla is a favourite destination for tourists. It is rated as the 5th best in education, economic environment and healthcare. The city is ranked 10th in housing options.

With an overall competitive score of 52.63, and an infrastructure score of 52.19, Shimla ranks 19th.

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20. Kanpur

With an overall competitive score of 52.61, and an infrastructure score of 54.14, Kanpur stands at the 20th position.

Kanpur in Uttar Pradesh is a major centre of leather products and textiles. The city also has a booming steel, chemicals, two-wheelers, engineering, and fertilizer industries. There are also numerous small- and medium-scale enterprises in the city.

A throbbing financial nerve centre in UP, Kanpur is also home to many a major banks. The3 city's locational advantage, the availability of skilled manpower, good educational institutions, fairly developed infrastructure, etc. It also boasts of the prestigious Indian Institute of Technology.

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21. Dhanbad

Dhanbad, in Jharkhand, is famous for coal mining. Many major firms, like Tata Steel, BCCL, IISCO, etc, have coal mining operations here.

With an overall competitive score of 52.37, and an infrastructure score of 52.52, Dhanbad is in the 21st spot.

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22. Ludhiana

Ludhiana is one of India's richest cities. Last year, the World Bank ranked Ludhiana as the best Indian city for business environment.

With an overall competitive score of 52.30, and an infrastructure score of 52.85, Ludhiana is the 22nd most competitive Indian city.

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23. Varanasi

Varanasi has many small-scale industries and is famous for the production of excellent Banarasi silk. With an overall competitive score of 52.21, and an infrastructure score of 52.85, Varanasi is the 23rd most competitive city.

The Indian Railways also has a huge locomotive factory here.

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24. Vadodara

Vadodara is a big centre for pharmaceuticals, chemicals, cotton textiles and machine tools in Gujarat.

With an overall competitive score of 52.13, and an infrastructure score of 53.46, Vadodara ranks 24th in the list of most competitive Indian cities.

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25. Madurai

With an overall competitive score of 52.04, and an infrastructure score of 52.11, Madurai is the 25th most competitive Indian city.

Madurai has many large business houses engaged in the production of tyres, industrial rubber products, machinery, textiles, conveyor belts, chemicals, etc, says Wikipedia.

Even the city's IT industry has been booming over the last few years.


Image: Hindu devotees leave the Meenakshi Amman temple after offering prayers in Madurai.
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