Statsguru: Making sense of India's rise in WEF rankings

Last week, the World Economic Forum (WEF) released its global competitiveness report, which showed that India had jumped 16 places for the second year in a row to 39th rank in 2016-17, as shown in Chart 1. This is the largest gain made by any country on the list.The report indicates India has made substantial gains on most of the sub-indices. On "institutions" for example, India has jumped 18 spots, from 60 in 2015-16 to 42 in 2016-17, as shown in Chart 2; on "infrastructure" it has moved up from 81 to 68, while on "goods market efficiency" it has climbed to the 60th spot, up from 91 a year ago.

But while improvements on some indices such as "macroeconomic environment" (it has jumped from 91 to 75) seem plausible, on others it elicits scepticism. On "labour market efficiency" for example, the country has jumped from 103 to 84. While part of the improvement in the overall labour index could reflect recent changes in labour laws (the government has initiated labour reforms in the textiles sector), on others it is perplexing. On "hiring and firing practices", the country now ranks 15th in the world, up from 25 a year ago.

Similar improvements on WEF's other indicators do not seem to gel with other data sources. On "higher education", the WEF report indicates that India has made considerable progress in its ranking on the quality of education, improving from 43 in 2015-16 to 29 in 2016-17, as shown in Chart 3. This is perplexing given that not a single Indian university ranks in the top 200 in the world. Only one university, Indian Institute of Science, ranks between 201 and 250, while another, Indian Institute of Technology, Bombay, ranks between 351 and 400, as Chart 4 shows.

Similarly, India's efficiency in "settling disputes" on WEF's ranking has improved from 42 in 2015-16 to 32 in 2016-17, as Chart 5 shows, even as a staggering 23 million cases are still pending in courts, as seen in Chart 6. Of these, roughly 10 per cent cases have been pending for over 10 years. On "innovation" too, there exists similar confusion. While on the WEF's innovation index the country ranks 29th, on the Global Innovation Index, it ranks 66th, as Chart 7 shows.