India's ranking has also improved significantly in terms of public trust in politicians, as also with regard to diversion of public funds and for the 'irregular payments and bribery' at government institutions, as per an annual study by the World Economic Forum (WEF).
India was ranked 94th last year, while China's position has improved by seven places to 22nd in the latest ranking of countries for 'favouritism shown by government officials'.
The countries have been ranked on the basis of a survey of the extent to which "government officials show favouritism to well-connected firms and individuals when deciding upon policies and contracts".
In the BRICS block of five major emerging economies, India's ranking is better than that of Russia (87th), South Africa (104th) and Brazil (108th) on this list.
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India is also ranked better than countries like Mauritius, Spain, Israel, Thailand, Sri Lanka, Pakistan, Myanmar and Bangladesh, among others, on this list which forms part of the WEF's annual Global Competitiveness Report.
Those ranked better than India also include Luxembourg, Germany, Malaysia, Hong Kong, Saudi Arabia, Bahrain, Australia, France, Indonesia, Bhutan, Macedonia and Morocco.
According to the WEF methodology, the countries have been ranked on a scale of 1-7, where one means 'always show favouritism' and a score of 7 means 'never show favouritism'.
India's score stands at 3.4, while top ranked Qatar has scored 5.6 points. India had scored 2.79 last year.
In terms of instances of 'diversion of public funds' also, India's ranking has moved up to 60th place, from 98th last year. This sub-ranking measures a country's score on how common is diversion of public funds to companies, individuals, or groups due to corruption.