Friday, March 20, 2009

India 75th in world's best nations for business: Forbes

NEW YORK: India has slipped 11 positions to be ranked 75th in a list of world's best countries for business, compiled by US publication Forbes, as the country lost ground in areas like trade freedom, technology, corporate tax rate and corruption.

The list has been topped for the second year in a row by Denmark, while India has moved down from its 64th position in Forbes' annual list, which ranks 127 nations on the basis of business climate in a country for entrepreneurs, investors and workers.

The US has moved up two positions to be ranked second on the list. Besides, Canada and Singapore have moved up four spots each to number three and four respectively. Other countries in the top 10 this year include New Zealand, UK, Sweden, Australia, Hong Kong and Norway.

Three countries -- New Zealand, Australia and Norway -- are new to the top-ten this year, while three others -- Finland, Ireland and Switzerland -- have fallen out of this league.

"Sliding the most this year was Ireland (No. 14, down 12), which even saw plans for a Guinness mega-brewery shelved by parent Diageo as exports slowed," Forbes said, adding Uruguay, Armenia, Paraguay and Latvia also moved down considerably.

China has moved ahead of India to 63rd position in this year's list, up from its 79th spot last year, primarily due to improvements in areas like innovation and investor protection. The Communist nation has been ranked at top position across the world in terms of investor protection, although it is ranked among the lowest at 122nd in terms of personal freedom.

About India, the report said the country declined on the rankings on four metrics -- trade freedom, technology, corporate tax rate and corruption.

In terms of trade freedom, India was ranked among the lowest at 125th position, while it was down to 118th on corporate tax rate front. In technology and corruption, the country slipped to 64th and 71st positions respectively.

Besides, India is ranked at the 107th spot in terms of monetary freedom, 90th on red tape basis and 54th on personal freedom front. The rankings are, however, better at 30th each on the basis of investor protection and innovation and 44th on intellectual property rights.

In terms of GDP growth, India ranks 14th among these 127 countries with a growth rate of 7.3 per cent, while China is fourth with 9.8 per cent growth. Azerbaijan has topped this tally with a 15.6 per cent growth rate.

"This is not a tally of economies with the highest gross domestic product growth, or lowest unemployment. The goal is to quantify for entrepreneurs and investors the often- qualified information about dynamic economies and what they would consider desirable conditions for business," Forbes said.

The report said the ranking took into consideration the right to participate in free and fair elections, freedom of expression and organisation and investor protection safety among other factors.

"Amid the financial turmoil this year, we added stock market performance to reflect the extent of disrepair in countries' banking systems, as well as investor confidence in a recovery. Intellectual property rights, the promotion of free trade and low inflation, combined with low taxes on income and investment, give a snapshot of the conditions for business in each," it added.

About India, the report added the government has reduced controls on foreign trade and investment and higher limits on foreign direct investment were permitted in a few key sectors, such as telecommunications.