India’s global competitiveness declining?
In industrial competitiveness surveys of 2007-8 India seems to be taking a beating. In an IMD survey India was ranked 29th (out of 55), a slight fall as compared to last year. The criteria here was economic performance, government efficiency, business efficiency and infrastructure and it was infrastructure where India scored very low.
The latest report is the competitiveness scorecard released by The United Nations Industrial Development Organization (UNIDO). It evaluates competitiveness on the basis of industrial performance and development the ability to compete in a global market and the share of manufacturing in GDP amongst other things.
As expected the industrialised countries lead the pack. Here is a partial list, with the ranking in brackets:
- Singapore (1)
- Japan (4)
- Sweden (6)
- Germany (8]
- Republic of Korea (9)
- USA (12)
- Hong Kong SAR (13)
- Austria (14)
- Slovenia (15)
- UK (16)
- Malaysia (18]
- Italy (19)
- China P R (26)
- Thailand (27)
- Spain (28]
- Brazil (39)
- India (41)
- Pakistan (55)
- Russia (66)
- Bangladesh (67)
- Sri Lanka (75)
One of the reasons why India scores badly is that manufacturing value per capita and manufacturing exports per capita are taken into account as well.
In any case, our manufacturing sector isn’t doing well, a sector which “fuels growth, productivity, employment, and strengthens agriculture and service sectors.” Projections of manufacturing growth may be bright, with an expectation that there will be a 17 percent growth (crossing the $300 billion mark by 2015), but the present scenario isn’t too good. An article in Business Week by Manjeet Kripalani has a strong pessimistic tone. He mentions these red flags:
- 11.4% inflation
- large government deficits
- rising interest rates
- Loss of foreign investment in India’s stock market
- Falling rupee
- Stock market down over 40 percent from the year’s highs
He doesn’t blame our government completely for the mess, but he does blame it for its gargantuan subsidies and criticizes the loan waivers in the last budget.
I will leave you with these very interesting visuals which are available at scribd.com, put up there by Shabbir Ghadiali and the link sent to me by Vishal Sharma. Please note that not all figures are the latest figures:
The first chart is a global GDP comparison. To get a larger image, click on the picture.
Next is the sector wise contribution to Indian GDP:
Here is a brief overview of India’s competitive advantage:
And lastly I leave you with a very interesting map which tells you which are the high growth cities in India.
The cities are growing at different rates and it looks like Gujarat is steaming ahead of the rest of India. So if you are looking for a job you know now which city is likely to be most welcoming!
- Surat: GDP growth is 11.5 percent
- Bangalore – 10.3 percent
- Ahmedabad – 10.1 percent
- Mumbai – 8.5 percent
- New Delhi – 8.4 percent
- Hyderabad – 7.8 percent
- Pune – 7.4 percent
- Kolkata – 6.3 percent
- Chennai – 6.2 percent
Other information on the map is total GDP, total foreign investment and also the important sectors in each city. If you click on the map you will get a bigger picture.
Update: After Vivek Mittal’s comment I cross-checked the accuracy of the above map, and I discovered that Surat is indeed the fastest growing city in terms of GDP. You can read about it in this article which says that Surat’s GDP is growing at 11.5 percent. Ahmedabad is 10.1 percent, and these are Jan 2008 figures. The article also confirms the growth figures of some other cities. However as mentioned in the map, these are just growth figures and in actual contribution in terms of actual GDP size Mumbai is still number 1, followed by Delhi, Kolkata and Chennai.