India has fallen five notches in the latest annual rankings of the Global Competitiveness Report released by the World Economic Forum. India was place 48 in the list of 131 economics covered under the Global Competitiveness Index (GCI) which tracks twelve parameters to come out with the rankings. Among the top emerging markets, India is second this year behind China.

Last year India ranked 43 and was ahead of other BRIC markets. This year China, at 34, is the top ranked BRIC market. Russia at 58 and Brazil at 72 are behind India. Among the three sub- indices under GCI, India improved its ranking from 41 to 31 in ‘efficiency enhancers’ but dropped form 60 to 74 in ‘basic requirements’. Its ranking on ‘innovation factors’ remained unchanged this year at 26.

The quality of the business environment in India has improved tangibly in recent years, with increased efficiency of goods, labour and financial markets and greater innovations and sophistication of firm operations. However, a number of weaknesses persist that need to be addressed especially in the area of infrastructure quality. Moreover, dealing with shortcomings in the provision of health services and education will ensure that the benefits of economic growth are more broadly distributed.

The neighbouring countries of India, Nepal’s GCI slips to 114 from 105, Pakistan is ranked at 92 which was at 83 in the last ranking and Sri Lanka became the only country to score ahead of earlier rank form 81 to 70.

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The ranking are calculated from both publically available data and the Executive Opinion Survey, a study conducted by World Economic Forum with its network of partner institutes in the countries covered by the report.

With a record 1,1000 poll form these countries, this index is designed to capture a broad range of factors affecting an economy’s business climate. The report also included the listing of main strengths and weaknesses of countries which makes it possible to identify key priorities for policy reforms.

GCI was developed for the World Economic Forum by Columbia University Professor Xavier Sala-i-Martin and originally introduced in 2004. The GCI is based on 12 pillars of competitiveness and includes Institutions, Infrastructure, Macroeconomic Stability, Health and Primary Education, Higher Education and Training, Goods Market Efficiency, Labour Market Efficiency, Financial Market Sophistication, Technological Readiness, Market Size, Business Sophistication and Innovation.