Context

• India has witnessed the sharpest rise among the Asian economies, with a six-position jump from 43rd to 37th rank on the annual World Competitiveness Index 2022 compiled by the Institute for Management Development, largely due to gains in economic performance.

• IMD business school in Switzerland and Singapore released the 2022 World Competitiveness Ranking.

• Its think-tank, IMD World Competitiveness Center, ranks 63 economies and assesses the extent to which a country promotes the prosperity of its people by measuring economic well-being via hard data and survey responses from executives.

Key Rankings of World Competitiveness Index 2022

• Denmark has moved to the top of the 63-nation list from the third position last year, while Switzerland slipped from the top ranking to the second position and Singapore regained the third spot from fifth.

  

• Others in the top 10 include Sweden at the fourth position, followed by Hong Kong SAR (5th), the Netherlands (6th), Taiwan (7th), Finland (8th), Norway (9th), and the USA (10th).
• Meanwhile, the top-performing Asian economies are Singapore (3rd), Hong Kong (5th), Taiwan (7th), China (17th), and Australia (19th).

Indian Scenario

• India ranked 37th with a six-position jump from 43rd on the annual World Competitiveness Index 2022.
• After a stable but stagnant five years, 2022 witnessed significant improvement in the competitiveness of the Indian economy, adding that this is largely due to gains in economic performance (from 37th to 28th).
• The domestic economy has experienced a stratospheric rise from 30th to 9th position in a year
• The labor market, a key sub-factor in the business efficiency parameter, moved up from 15th to 6th, while management practices and business attitudes and values also made major leaps.
• Major improvements in the context of retrospective taxes in 2021, India appears to have restored the trust of the business community. Its re-regulation of several sectors, including drones, space, and geo-spatial mapping, also likely played a role in the country’s stellar performance in the 2022 WCR.
• India is also a driving force in the global movement to fight climate change and India’s pledge of net-zero by 2070 at the COP26 summit in November 2021, sits in harmony with its strength in environment-related technologies in the ranking.
• The challenges that India has to face include
  • managing trade disruptions and energy security,
  • maintaining high GDP growth post the pandemic,
  • skill development, and employment generation,
  • asset monetization, and resource mobilization for infrastructure development.
• The top five attractive factors of India’s economy for business are
  • a skilled workforce,
  • cost competitiveness,
  • dynamism of the economy,
  • high educational level, and
  • open and positive attitudes.

Global Scenario

• Inflationary pressures are affecting the competitiveness of national economies along with COVID, and the invasion of Ukraine by Russia.
• The three most important trends found to be impacting businesses in 2022 are inflationary pressures (50 percent), geopolitical conflicts (49 percent), and supply chain bottlenecks (48 percent) with COVID being the fourth (43 percent).

Reference:

https://indianexpress.com/article/india/india-economy-growth-world-competitiveness-index-denmark-china-usa-7970806/

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