By Arun Kumar, IANS,
Washington : India is down by 11 places to the 75th in the Forbes ‘Best Countries For Business’ list with Denmark and the US rated the top two nations “better equipped to bounce back”.
India’s ranking among the world’s 127 economies slipped as it lost ground in areas like trade freedom (125), technology (64), corporate tax rate (118) and corruption (71), according to the list compiled by the US magazine.
India retained its place in areas like monetary freedom (107), property rights (44), innovation (30), red tape (90), investor protection (30) and personal freedom (54).
Canada is rated third after the US followed by Singapore (4), New Zealand (5), UK (6), Sweden (7), Australia (8), Hong Kong (9) and Norway (10).
Forbes noted that New Delhi has reduced controls on foreign trade and investment with higher limits on foreign direct investment permitted in a few key sectors, such as telecommunications.
However, tariff spikes in sensitive categories, including agriculture and incremental progress on economic reforms still hinder foreign access to India’s vast and growing market.
“Privatisation of government-owned industries remains stalled and continues to generate political debate; populist pressure from within the United Progressive Alliance (UPA) government had restrained needed initiatives,” it said.
The economy has posted an average growth rate of more than seven percent in the decade since 1997, reducing poverty by about 10 percentage points. India achieved 8.5 percent GDP growth in 2006, 9.0 percent in 2007 and 7.3 percent in 2008, significantly expanding manufactures through late 2008, Forbes noted.
India is also capitalising on its large numbers of well-educated people skilled in the English language to become a major exporter of software services and software workers, it said. Strong growth combined with easy consumer credit, a real estate boom, and fast-rising commodity prices fuelled inflation concerns from mid-2006 to August 2008.
Rising tax revenues from better tax administration and economic expansion helped New Delhi make progress in reducing its fiscal deficit for three straight years before sky-rocketing global commodity prices more than doubled the cost of government energy and fertilizer subsidies, Forbes said.
The ballooning subsidies, amidst slowing growth, brought the return of a large fiscal deficit in 2008, Forbes said suggesting, “In the long run, the huge and growing population is the fundamental social, economic and environmental problem.”