usiness & Economy World Competitiveness Year Book-2004 India shines in competitiveness

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By Daya Krishna

ACCORDING to the World Competitiveness Year Book (WCY) 2004, Indian economy has been growing like it has never done before, a fact that rest of the world is coming to recognise. India jumped a massive 16 ranks and now stands at 34th, up from 50th position in 2003. This is the largest jump by any economy among the 60 countries ranked annually in the WCY, and this is the best rank for India so far.

The report essentially seeks to assess whether countries across the world can create an environment in which enterprises can compete freely. The marked improvement in India´s position in 2004 is because of a huge jump in three of the four parameters on which the competitiveness rankings are based.

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The four parameters are: (i) economic performance (macro-economic performance of the domestic economy); (ii) business efficiency (extent to which enterprises are performing in an innovative, profitable and responsible manner; (iii) government efficiency (the extent to which government policies are conducive to competitiveness; and (iv) infrastructure (the extent to which basic technological, scientific and human resources meet the needs of business).

India´s huge jump of 16 places in its overall ranking is due to the rising of its ranking from 22 to 12 for economy; from 51 to 22 for business efficiency; from 43 to 34 for government efficiency; and from 58 to 57 for infrastructure.

India´s huge jump of 16 places in its overall ranking is due to the rising of its ranking from 22 to 12 for economy; from 51 to 22 for business efficiency; from 43 to 34 for government efficiency; and from 58 to 57 for infrastructure.

The significance of the overall increase of 16 in India´s ranking lies in the facts that (i) as many as 37 of the 60 countries have seen a drop in their ranking, and (ii) India has particularly improved its position against European countries and the emerging economics of South-east Asia.

Also, India´s gain of 16 points in its ranking has taken place in spite of poor progress in regard to infrastructure for which its ranking has improved only marginally from 58 in 2003 to 57 in 2004.

The economy of the US has continued to get top ranking in competitive strength because of a very high ranking in technology, which is largely due to the excellent work of a large number of Indians working in the US. This relationship has brought high competitiveness to India´s industrial sector which accounts for about 15 per cent of India´s population. Another 15 per cent of India´s population in the services sector has benefited from the rich countries outsourcing their work to India. Consequently, some prosperity has come to most of the 30 per cent of India´s population living in the urban centres and the economy looks like having acquired a sort of sheen of unprecedented nature.

But, this prosperity has remained confined to the 30 per cent of India´s population living in urban centres and most of the remaining 70 per cent of India´s population living in rural areas has continued to grovel in poverty. The distribution of incomes has become extremely inequitous. While 70 per cent of India´s population living in rural areas account for only 22 per cent of India´s GDP, the 30 per cent of India´s population living in urban areas account for as much as 78 per cent of India´s GDP!!

The continuation of this situation has brought down several governments in the states and also in the Centre in the elections held during the last six months. This kind of lappling of governments will continue if effective steps are not taken by the governments for reducing the large and growing chasm between the rich and the poor of India.

A famous President of America had said: ?If a government cannot help the majority which is poor, it cannot protect the minority which is rich.?

A sage of ancient India has said: ?cqHkqf{kr% fdUu djksfr ikia {kh.kk% ujk% fu´d:.kk HkofUrA?

(A hungry person can commit any crime, the physically weak are devoid of any compassion.)

Source: World Competitiveness Year Book-2004 published by the World Economic Forum (WEF)