The fall in India’s ranking in Global Competitiveness Index not only highlights the need for reforms but also underscores their urgency to implement them effectively. Explain (200 Words)
Refer - Business Standard
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· In the competitiveness rankings, India slipped 10 notches to 68th position among 141 countries.
· Although India’s overall score declined only marginally in absolute terms, improvement by other countries pushed India’s ranking down.
· This underscores an extremely important point that an economy like India needs to keep improving its competitiveness to maintain its position.
Need for reforms
· Capital flows are extremely mobile in today’s world and tend to move to markets where they are likely to get the best risk-adjusted returns.
· India ranks better in macroeconomic stability and the depth of the financial sector. Stress in government finances and renewed risks in the financial system could affect India’s growth prospects and competitiveness in the near to medium term.
· Although India has gained in the adoption of information and communication technology, it still has a fair distance to cover. India ranks poorly in product market efficiency, largely because of a lack of trade openness.
· The government has increased tariffs in recent years, which will affect India’s competitiveness. Further, India slipped from 75th to 103rd position in labour market competitiveness.
· The government is in the process of reforming labour laws, but other countries are moving at a much faster pace. It is important to note that in a globalised economy, where countries are competing for markets and capital, changes on the margin may not help.
· Slow and inadequate reforms in the labour market, among other things, will not allow India to attract firms looking to relocate from China. Besides, India is lagging behind in health and skill development.
· India needs to move faster than its peers to improve its attractiveness as an investment destination.
· Although structural reforms may not immediately push economic growth, they will help increase potential growth in the medium term. What can work in India’s favour at the moment is that it has a strong and stable government, which is not averse to taking swift decisions.
Deepesh 5 years
Pls review. Thanks
IAS Parliament 5 years
Good attempt. Keep Writing.
Sandip Das 5 years
Please review
IAS Parliament 5 years
Try to elaborate more on need for reforms. Keep Writing.
Madeshwaran 5 years
Kindly review
IAS Parliament 5 years
Good attempt. Keep Writing.
DHARU 5 years
Kindly review!!
IAS Parliament 5 years
Try to explain the need for reforms seperately. Keep Writing.
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