Competitive Advantage In India

COMPETITIVE INDIA

PRESTIGE INSTITUTE OF MANAGEMENT GWALIOR

ADITI UPADHYAYANKIT PANDEYMOHIT GARGBBA 4TH (A)

CompetitivenessIn General termIt is an ability and performance of a firm, sub-sector or country.

In Nation`s Point of viewThe set of institutions, industries, policies, and factors that determine the level of productivity of a country

• World Economic Forum, in its Global Competitiveness Report

• The Institute for Management Development, in its World Competitiveness Yearbook.

Basis to Achieve Competitiveness

CLASSIFICATION OF THE TRANSFORMATIONAL PHASES OF INDIA INTO THREE PARTS:-

1950-19701971-19901991-TO PRESENT

1950-1970(Achievements & Motives)

• Focus on National Income.• Focus on remove the economic inequalities.• Green Revolution was Introduced• Literacy rate was around 20-30%.• Cement Industries and Fertilizers Plant were

built.• The highest growth was around 3-4%.• IIM and IIT`s were Introduced during this Period.

1971-1990 (Achievements & Motives)

• Focus was to bring rapid Industrialization along with price stability and unemployment issues.

• Operation Flood was Introduced• India`s GDP was around 5-6%.• Unemployment rate was reduce to 6%• Several Space missions were launched.• Investment in Road and Railway Networks

were • Computerization

1991- To Present(Achievements & Motives)

• Golden Era• L.P.G was introduce .• Market Oriented• Foreign Investment and Foreign Technology• Computerisation was highly evolved in this

period• GDP Rate was 8-9%• India is having second biggest road network

and one of the biggest railway network in World

India`s Competitiveness• Rank of India is 49 out of the 133 nations in the Global

Competitiveness Index• India performs extensive poor in Health and Primary

Education with a rank of 101• Energy and transport infrastructure ranked at 76th • India’s financial system ranks 16th • India has a strong banking system ranked at 25th

• India ranks 4th in market size• India’s market efficiency reasonably good at rank 48th

1ST PILLAR: INSTITUTION• Government• JUDICIARY SYSTEM• PRIVATE INSTITUTION

2ND PILLAR: INFRASTRCTURE• ELECTRICITY• ROAD TRANSPORT• PORT INFRASTRUCTURE• AIR TRANSPORT• RAILROAD

India’s performance could be analysed on the basis of each of the 12 pillars of competitiveness.

3RD PILLAR: MACRO ECONOMIC STABILITY• Government Borrowing• Inflation

4TH PILLAR: HEALTH AND PRIMARY EDUCATION

5TH PILLAR: HIGHER EDUCATION AND TRAINING

6TH PILLAR: GOODS/SERVICES MARKET EFFICIENCY• TAX STRUCTURE• MARKET COMPETITION• FORMAL SECTOR

7TH PILLAR: LABOUR MARKET EFFICIENCY• FIRING COST• EMPLOYER AND EMPLOYEE RELATION• LABOUR EFFICIENCY• BRAIN DRAIN

8TH PILLAR: FINANCIAL MARKET SOPHISTICATION• EQUITY MARKET

9TH PILLAR: TECHNOLOGICAL READINESS

10TH PILLAR: MARKET SIZE• SALES TAX• EXPORT MARKET

11TH PILLAR: BUSINESS SOPHISTICATION

12TH PILLAR: INNOVATION

• ACADEMICS• RESEARCH ORGANIZATIONS• PRIVATE SPENDING• IPR

COMPETITIVE GROWTH OF INDIA DURING DIFFERENT FIVE YEAR PLANS

S.no. Various

Parameters for Competitiveness

9th Five year plan

(1997-2002)

10th Five year plan

(2002-2007)

Growth Rate

between(9th and 10th

plan)

11th Five year plan

(2007-2012)

Growth Rate

between (10th and 11th plan)

1. GDP 5.55% 7.8% 40.54%* 7.9% 1.28%*

2. Infrastructure US$ 107.4 billion

US$ 173.3 billion

61.35%* US$ 387.3 billion

123.48%*

3. Literacy Rate 64.8% 67.8% 04.62%* 74.4% 9.73%*

4. Unemployment Rate

6.0% 5.1% -15%* 3.7% -27.45%*

5. Agricultural Growth Rate

3.9% 3.8% -02.56%* 4.0% 5.26%*

6. Industrial Growth 8.2% 9.7% 18.29%* 11.0% 13.40%*

7. Poverty Rate 36.1% 29.2% -19.11%* 22% -24.82%*

8. Per Capita Income 2240 3640 62.5%* 5380 47.80%*

CHALLENGES BEFORE ACHEIVEING COMPETITIVENESS

Concluding Remark

India has to surpass each of these barriers in order to compete globally. Inefficient government bureaucracy and corruption should be the primary focus of government. India has successfully implement reforms in 1991. But the World economic Forum’s executive survey demonstrates the need of further reforms in terms of restriction and liberalization. Access to financing, tax regulation and policy stability are viewed as hurdles in India. The policy makers have to focus on factors like sustainability, environment, inclusive growth and social sector both during drafting the policy and implementing it.