India leapt 16 places to 55th position in the latest ranking of economies’ competitiveness released by the World Economic Forum Wednesday.
The Geneva-based think tank says India is a “bright spot” among larger emerging markets, which have shown a broader trend of either a decline or stagnation. It attributes the country’s big rise–which comes after five years of decline–to the election of Prime Minister Narendra Modi last year, which ignited optimism about the country’s limping policy changes.
“This dramatic reversal is largely attributable to the momentum initiated by the election of Narendra Modi, whose pro-business, pro-growth, and anti-corruption stance has improved the business community’s sentiment toward the government,” the WEF says in the report, which includes the Global Competitiveness Index 2015–2016 Rankings.
The ranking is based on the assessment of 140 countries on 12 parameters such as infrastructure, macroeconomic environment, institutions, health and education, among others.
The report says the quality of India’s institutions was judged more favorably in the latest ranking while its macro-economic stability has improved, with easing inflation and a gradual drop in the government’s budget deficit since its 2008 peak. Infrastructure has also improved, the report said.
“The fact that the most notable improvements are in the basic drivers of competitiveness bodes well for the future, especially the development of the manufacturing sector,” the report said.
However, India needs to improve its technological readiness: it is one of the least digitally connected countries in the world.Fewer than one in five Indians use the Internet regularly, and fewer than two in five own even a basic cell phone, according to the report.
The ranking of regional rival China has barely budged in the past six years as it has been dealing with rising production costs, an aging population and diminishing returns on the massive capital investments of the past three decades.
However, its 28th position–unchanged from the previous year–is still much higher than India’s.
China remains by far the most competitive among larger emerging economies. “However, its lack of progress moving up the ranking shows the challenges it faces in transitioning its economy,” the report said.
Switzerland, Singapore and the U.S. were the top three ranked, unchanged from the previous year.
In Asia, Malaysia ranked 18th, up two places, Indonesia ranked 37th, down three notches while Thailand ranked 32nd, down one position.
Among the remaining BRICS group of countries, Brazil was at number 75, plummeting from 57 last year. The Russian Federation was at number 45, up from 53 and South Africa was at 49, better than 56 last year.