Infrastructure has been looked upon as the single biggest hindrance for doing business in India followed by corruption and cumbersome bureaucracy, a World Economic Forum report said on Wednesday.
New Delhi/Geneva: Infrastructure has been looked upon as the single biggest hindrance for doing business in India followed by corruption and cumbersome bureaucracy, a World Economic Forum report said on Wednesday.
According to WEF's global competitiveness report, inadequate supply of infrastructure was cited by a majority of respondents as the most problematic factor for doing business in India, followed by bureaucracy, corruption, tax regulation, policy instability and restrictive labour regulations.
Some of the other factors that were cited as problematic factors for doing business in India include, inflation, access to financing, tax rates, government instability, inadequately educated workforce, crime and theft; and poor public health, among others.
According to WEF, efficient infrastructure is critical to ensuring the effective functioning of the economy as a well-developed infrastructure reduces the effect of distance between regions, helps integrating the national market and connecting it to markets in other countries and regions.
In terms of competitiveness, India now ranks 60th, continuing its downward trend that began in 2009. Moreover, the country has fared badly with respect to its BRICS peers.
Once ahead of Brazil and South Africa, it now trails them by several places and is behind China by a margin of 31 positions, while Russia (64th) has almost closed the gap.
According to WEF, public trust in politicians has been eroding since 2009 and has now reached an all-time low at 115th, while bribery remains deeply rooted (110th).
Meanwhile, the situation has deteriorated further on the macroeconomic front, with India now 110th in this pillar. The inflation rate and public deficit-to-GDP ratio were dangerously close to double digits in 2012, and the debt to-GDP ratio is the second highest among the BRICS, the report said.
Although businesses adopt new technologies relatively promptly (47th), penetration rates of fixed and mobile Internet and telephony among the population remain among the lowest in developing Asia.
Furthermore, the situation has worsened in terms of labour market efficiency (99th), where the most salient problem remains the dismally low participation of women in the workforce, it added.
"With a ratio women-to-men of 0.36 (137th), India has the lowest percentage of working women outside the Arab world," the report said.