Position of India in Global Competitiveness Report 2013-14

            World Economic Forum has just released the Global Competitiveness Report, 2013-14. The report defines three stages types of economy. The first stage is factor driven wherein countries compete on the basis of their factor endowments—primarily unskilled labor and natural resources.  Competitiveness at this stage depends upon factors categorized under basic requirements i.e. public and private institutions, infrastructure, macroeconomic environment and a healthy workforce that has received at least a basic education. In the second stage countries move into efficiency-driven stage of development,  which requires development of more efficient production processes and increasing product quality. In this stage competitiveness is driven by higher education and training, efficient goods markets, well-functioning labor markets, developed financial markets, the ability to harness the benefits of existing technologies and a large domestic or foreign market. In the final stage countries move into the innovation-driven stage of development where increased wages and associated standard of living could be sustained only if their businesses are able to compete with new and unique products. At this stage, production of goods by using the most sophisticated production processes and by innovating new processes become the driving factors.

            The report lists 148 countries. As per the report, Switzerland is the most competitive country with the first position and Chad is the last at 148^th position. India is at the 60^th position one down from the report of 2012-13, four down from the report of 2011-12 and 11 down from the report of 2009-10. India has been placed along with 38 other countries in the stage 1 (factor driven economy).  Our regional competitor, China is at 29^th rank and has been placed in the second stage of Efficiency driven economy.  Important indicators of Indian economy as per this report are as under:

Rank of India as per indicators in the Global Competitive Index 2013

Sl. No.	Category/Pillars as per the report	Score 1-7	Rank	Details of important indicators
Basic Indicators (60%)		4.2	96
1	Institutions	3.9	72	This category is further divided into 21 indicators. Out of these in four cases India ranks below 100. These are Public trust in politicians (115), Irregular payments and bribes (110), Burden of Government regulation (104) and Business cost of terrorism (113). In three cases the country ranks above 50. These are Judicial Independence (40), Efficiency of legal framework in challenging regulation (48) and Strength of Investor Protection (41).
2	Infrastructure	3.7	85	This category is divided into nine indicators. Out of these in three cases the country ranks below 100. These are Quality of Electric Supply (111), Mobile Telephone Subscriptions/100 population (123) and Fixed Telephone Lines/100 population (118). In two cases the rank is below 50. These are Quality of Railroad Infrastructure (19) and Available airline seat per km/week (13).
3	Macroeconomic Environment	4.1	110	The category comprises of 5 indicators. In three cases the country ranks below 100. These are Government Budget Balance-% GDP (141), Inflation-annual % change (130), General Government Debt-% GDP (116). In other two indicators rank of the country is below 50. These are Gross National Savings - % GDP (28) and Country Credit Rating (47).
4	Health and Primary Education	5.3	102	This category has 10 indicators out of which India ranks below 100 in six. These are Business Impact of Malaria (112), Malaria cases per 100,000 population (116), Business Impact of Tuberculosis (103), Tuberculosis cases per 100,000 population (114), Infant Mortality-deaths per live 1000 births (120) and Life Expectancy (111).
Efficiency Enhancers (35%)		4.4	42
5	Higher Education and Training	3.9	91	The category has eight indicators out of which in one case rank is below hundred. This is Secondary Education Enrolment (110). In four indicators, the rank is below 50. These are Quality of the Educational System (33), Quality of Math and Science Education (32), Quality of Management Schools (30) and Availability of Research and Training Services (47).
6	Goods Market Efficiency	4.2	85	The category has 16 indicators out of which in 5 cases the rank is below 100. These are Total Tax Rate-% profits (128), Number of procedures to start a business (129), Number of days to start a business (103), Trade Tariffs-% duty (128) and Imports as a percentage of GDP (107). In four cases, rank is below 50. These are Intensity of local competition (24), Extent of market dominance (26), Effectiveness of Anti-Monopoly policy (29) and Effect of taxation on incentives to invest (44).
7	Labor Market Efficiency	4.1	99	The category has 10 indicators in which in one case the rank is much below 100. This is Women in Labor Force-ratio to men (137). In two cases the rank is 50 and above. These are Reliance on professional management (46) and Country capacity to retain talent (50).
8	Financial Market Development	4.8	19	The category has 8 indicators and in all of these the rank of country is below 50. These are Availability of financial services  (45), Affordability of financial services (38), Financing through local equity market (18), Ease of access to loans (38), Venture capital availability (27), Soundness of banks (49), Regulation of securities exchanges (27) and Legal Rights Index (28).
9	Technological Readiness	3.2	98	The category has 7 indicators out of which in 3 cases rank is below 100. These are Individuals using internet (120), Fixed broadband internet subscription (106) and International Internet bandwidth (113). In two cases, the rank is below 50. These are Firm level technology absorption (48) and FDI and technology transfer (32).
10	Market Size	6.2	3	The market has four indicators out of which one has a rank below 100. This is Export as a percent of GDP (125). In all other three cases the rank is below 5. These are Domestic Market Size (3), Foreign Market Size (4) and GDP (PPP) (3).
Innovation and Sophistication Factors (5%)		4.0	41
11	Business Sophistication	4.4	42	The category has 9 indicators out of which one is below 5 and three lie between 16-40. These are Local Supplier Quantity (2), State of cluster development (16), Value chain breadth (40) and Control of International distribution (38).  The remaining five indicators rank between 50-80.
12	Innovation	3.6	41	The category has 7 indicators which are Capacity for innovation (41), Quality of scientific research institutions (37), Company spending on R&D (39), University-industry collaboration in R&D (47), Government procurement of advanced tech products (92), Availability of scientists and engineers (15) and PCT Patents (64).

Most Problematic Areas for Conducting Business

Sl. No.	Problematic Area	Weightage of response
1	Inadequate supply of infrastructure	18.1
2	Inefficient Government Bureaucracy	17.5
3	Corruption	17.3
4	Tax regulations	7.6
5	Policy Instability	6.6
6	Restrictive Labor Regulations	5.8
7	Inflation	4.3
8	Access to Financing	3.9
9	Tax Rates	3.4
10	Poor work ethic in national labor force	3.0
11	Foreign currency regulations	2.9
12	Government instability	2.8
13	Insufficient capacity to innovate	2.8
16	Inadequately educated workforce	2.2
17.	Crime and Theft	1.2
18.	Poor Public Health	0.7