IMD World Competitiveness: While India had posted a 30 spot jump in World Bank’s ‘Ease of Doing Business Index’ to crash into the top 100 in a major boost to Narendra Modi-led government, the country’s rank has improved only marginally in in World Competitiveness to the 44th position in the annual rankings compiled by International Institute for Management Development (IMD). The United States has bagged the top spot followed by Hong Kong and Singapore in the 2nd and 3rd spot respectively.
Noting that India has improved in various parameters including bandwidth speed, mobile broadband subscribers, pupil-teacher ratio in primary education and total health expenditure, among others, the report says also highlighted various risks that pose a risk to the country in 2018. The various issues that weigh include skilling of manpower and employment generation, streamlining GST and infrastructure development. Interestingly, in the last four years under the Narendra Modi-led government, India’s ranking hovered near the 44th spot. India started from the 40th position in 2013 and dropped to 44th rank in 2014, and then retained 44th rank in 2015. Notably, in 2016 India’s rank had improved to to 41 in 2016, but plunged to 45 in 2017. We take a closer look at the challenges facing the country, that weigh in 2018.
Skilling of manpower and employment generation
Job creation is one area where more needs to be done, in order for the country to improve its position. According to a report by Centre for Monitoring Indian Economy, the unemployment rate in India has doubled between July 2017 and April 2018, whereas the number of jobs in the country in the last financial year 2017-18 also fell to 406 million from 406.7 million in the previous year. The unemployment rate in the country rose from 3.39% in July 2017 to 6.23% in March 2018, and is projected to reach 6.75% in April 2018, according to the CMIE data. According to IMD, the unemployment rate for India in 2017 was 4.68%, and it ranked 20th in the parameter.
While it has been almost an year since the implementation of the new indirect tax regime, India has to focus on streamlining the implementation of goods and services tax and balancing high growth with sustainable development goals, the report said. India’s economic growth was pushed downward in 2017 due to the Goods and Services Tax (GST), according to a UN report which said the country is expected to recover gradually and grow at 7.2% in 2018.
IMD report notes that digital literacy and adequate bandwidth at rural areas and mobilisation of resources for infrastructure development needs are few more key areas where the government needs to concentrate. India needs to spend at least Rs 50 lakh crore in next five years through the year 2022 to develop infrastructure, the country will see close to Rs 3,000 crore investment per day, according to a recent CRISIL report.