Vibrant financial markets and a sound banking sector has helped Indian economy move up a notch to 49th place on the global competitive scale, while Switzerland has toppled the US as the top-ranked nation, the World Economic Forum (WEF) said today.
The US has slipped to the second place and is followed by Singapore, Sweden and Denmark in the top five, according to the annual ranking of the world's most competitive economies.
Among the 133 countries featuring in the list, three nations in the BRIC grouping -- India, China and Brazil -- have moved up the competitiveness ladder while Russia has witnessed a sharp drop.
Both India and China have moved up one place to 49th and 29th positions, respectively, in the latest ranking. Last year, India was at the 50th spot while China stood at 30th place. Brazil has improved its rank by eight places to 56 this year.
However, Russia has slumped to the 63rd place from 51 in the Global Competitiveness Index 2009–2010.
"India's competitive performance continues to exhibit a rather reversed development pattern. It precedes many advanced economies in terms of business sophistication and innovation capacity. India also boasts bustling financial markets and a sound banking sector, supported by well-functioning institutions," WEF said.
In terms of well-functioning institutions, India is at the 54th place while at 16th and 25th spots in terms of bustling financial markets and a sound banking sector supported by a vast domestic market.
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On the other hand, the report noted that India under performs in some of the basic determinants of competitiveness, in particular infrastructure, health and primary education.
"In addition, penetration rates for mobile telephony (116th), the Internet (104th), and personal computers (96th) remain among the lowest in the world, while inefficiencies in the labour market (83rd) prevent an optimal allocation of human capital.
"Improvement in these areas would place India on a stronger growth trajectory going into the future," WEF said.
The ranking is based on twelve factors of competitiveness, including institutions, infrastructure, macroeconomic stability, health and primary education, higher education and training.
Other criteria taken into consideration are goods market efficiency, labour market efficiency, financial market sophistication, technological readiness, market size, business sophistication and innovation.