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India stays at 27th spot in competitiveness

May 10, 2007 09:53 IST

India has remained at the 27th place in competitiveness in 2007, according to a survey by IMD, a Lausanne-based premier business school. However, the country's position has improved substantially since 2003, when it was ranked 42.

The parameters for the survey included domestic economy, international trade, international investment, labour market, social framework and employment.

In the Asia-Pacific region, India has been ranked ninth for the second year in a row. Among the countries with population of more than 20 million, India has secured the 10th ranking, compared with 18th in 2003.

According to the survey report, India has improved the most in the number of mobile phone subscribers, direct investment in stocks abroad, export of commercial services, Internet users, high-tech exports, total reserves, per capita number of computers, stock market capitalisation, export of goods, direct investment inflows, trade-to-GDP ratio, and urbanisation.

The areas in which India has seen the sharpest decline are personal income tax rates, consumer price inflation, direct investment flows abroad, ease of doing business, long-term employment, brain drain, emphasis on science in schools, freedom to foreign investors to acquire control of domestic companies, bureaucracy, exchange rates, current account balance, and water transportation.

India has fallen to the 10th position in economic performance. It was seventh in 2006, a quantum leap from the 20th place it was at four years ago.

The Indian economy's strengths, according to the survey report, include relocation of R&D facilities, services and production not being a threat to the economy's future, besides the real GDP growth and long-term employment prospects. GDP per capita, export of goods, portfolio investment assets and trade-to-GDP ratio have been mentioned as some of the key weaknesses.

While the report says the efficiency of the government has worsened, efficiency in business has recorded some improvement. Compensation levels, working hours, attraction and retention of talent and remuneration to management staff have been recognised as strengths.

Labour, however, continues to suffer, with the report identifying labour force, particularly the presence of women, labour productivity, investment risk and overall productivity as weaknesses.

After showing some improvement in infrastructure in the last three years, India has been ranked 50th, the same as in 2003. Pupil-teacher ratio in primary schools, number of mobile phone subscribers, Internet users and human development index have pulled down India's performance in infrastructure.

The challenges that India will face in 2007 are a large poverty base, job creation, gender discrimination, public finance management and infrastructure bottlenecks, according to the IMD report.
BS Reporter in New Delhi
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