New study highlights India’s key economic strengths and weaknesses

Desirée Mohindra, Communications Dept.
Tel.: +91 (0)9650893041; desiree.mohindra@weforum.org

• World Economic Forum’s India Competitiveness Review 2009 launched today ahead of the India Economic Summit
• India benefits from well-functioning institutions, fairly developed financial market, innovative and sophisticated businesses, and sheer market size
• Shortcomings in the areas of health, education, infrastructure, fiscal management, ICT diffusion and labour market efficiency
• The full study is available at http://www.weforum.org/pdf/ICR2009.pdf and watch the video interview with Thierry Geiger, Economist, World Economic Forum’s Global Competitiveness Network here

New Delhi, India, 5 November 2009 – The World Economic Forum released today The India Competitiveness Review 2009, in the lead-up to the India Economic Summit in New Delhi on 8-10 November. The study analyses India’s performance in an international context. It makes comparisons with a number of countries, including the People’s Republic of China, Indonesia, the Philippines and Brazil, revealing significant differences in performance. The review’s in-depth findings will be presented and discussed at the upcoming Summit.

“As the world slowly emerges from the crisis, the time is propitious for India to take stock of its competitive strengths, as well as those areas hindering its rapid growth and development. This year also marks the 25th anniversary of the World Economic Forum’s engagement in India, providing an excellent opportunity to reflect upon how India’s competitiveness has progressed over this period and what remains to be achieved,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

The India Competitiveness Review 2009 draws on the findings of the World Economic Forum’s Global Competitiveness Index 2009-2010. It provides a comprehensive overview of the country’s current competitiveness landscape, highlighting strengths and problematic areas, and shedding light on India’s future economic prospects.

India ranks 49th out of 133 countries in the Global Competitiveness Index as a result of mixed performance across the 12 categories covered by the Index. India displays competitive strengths in areas of business sophistication, innovation and financial market sophistication. The country can also rely on fairly well-functioning institutions. On the other hand, there is considerable room for improvement in several of the basic drivers of competitiveness, in particular infrastructure, health and primary education, while the runaway fiscal situation prevents the government from making much-needed investments. The diffusion of information and communication technologies remains very low by international standards. Bureaucracy, over-regulation and corruption still affect the functioning of markets, in particular in the labour market.

In addition to analysing India’s performance in the Global Competitiveness Index, the Review includes two other contributions. The first is by the Confederation of Indian Industry (CII), and examines India’s recent growth drivers as well as challenges presently facing policy-makers in their efforts to foster more inclusive growth and development. “The India Competitiveness Review enables benchmarking of India's performance in comparison to her peers in critical areas of global competitiveness and will allow India to improve on these indicators. India remains a favourable destination for global trade and investment as we see the signs of economic recovery,” said Chandrajit Banerjee, Director-General, Confederation of Indian Industry (CII), India.

The second contribution is by PricewaterhouseCoopers, and presents the results of the 13th annual CEO Survey in India, shedding light on how India’s business leaders see the nation’s resilience and competitiveness at a time of crisis and recovery. “Despite the economic downturn, most Indian CEOs are confident about the future. Sixty-three per cent of respondents said they were ‘very confident’ of their revenue growth prospects over the next 12 months. Yet, they are also realistic and understand that there are challenges ahead,” explained Jairaj Purandare, Executive Director and Leader, Markets and Industries, PricewaterhouseCoopers, India, a co-author of the study.

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