India 60th in WEF inclusive development list below Nepal, Pakistan

Davos, Jan 17 (IANS) India has been ranked 60th among 79 developing economies, even lower than China and Pakistan, in the World Economic Forums latest inclusive development index (IDI) report.

The WEF's Inclusive Growth and Development Report 2017, released here on Monday, said that most countries were missing major opportunities to raise economic growth, as well as reduce inequality at the same time, because the growth model and measurement tools require significant readjustment.

"India, with a score of only 3.38, ranks 60th among the 79 developing economies on the IDI, despite the fact that its growth in GDP per capita is among the top 10 and labour productivity growth has been strong."

"Poverty has also been falling, albeit from a high level," the report said.

The IDI is based on 12 performance indicators, and evaluation is based on three key parameters of Growth and Development, Inclusion and Intergenerational Equity, and Sustainability.

While India is placed at the 60th spot, among its neighbours China is ranked 15th, Nepal is 27th, Bangladesh is ranked 36th and Pakistan is closest ahead of India at 52nd.

Lithuania tops the list of 79 developing economies that also features Azerbaijan and Hungary at second and third positions, respectively.

Others countries in the top ten are Poland (fourth), Romania (fifth), Uruguay (sixth), Latvia (seventh), Panama (eighth), Costa Rica (ninth) and Chile (10th).

The report also noted that India's debt-to-gross domestic product (GDP) ratio is high, raising some questions about the sustainability of government spending.

Meanwhile, the International Monetary Fund has cut India's growth forecast for the current fiscal by as much as one percentage point due mainly to the disruptions caused by demonetisation of 500 and 1,000 rupee currency notes.

The IMF had earlier predicted a 7.6 per cent growth for the Indian economy during the current fiscal ending March 31.

"In India, the growth forecast for the current (2016-17) and next fiscal year were trimmed by one percentage point and 0.4 percentage point, respectively, primarily due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative," the International Monetary Fund (IMF) said in its latest World Economic Outlook (WEO) update released in Washington on on Monday.

In its first projection on India post the demonetisation of high value currency, the World Bank has also lowered the country's GDP growth estimate for this fiscal to 7 per cent, from the 7.6 per cent estimate made in June last year. US firm Fitch Ratings has also reiterated its late November downgrading of India's growth outlook.

"Growth in India is estimated to reach 7 per cent in financial year (FY) 2017 ... reflecting a modest downgrade to India's expansion," the multilateral lender said in its Global Economic Prospects report released last week.

"Unexpected demonetisation -- the phasing out of large denomination currency notes -- weighed on growth in the third quarter of FY 2017," it said.

"Weak industrial production and manufacturing and services purchasing managers' indexes further suggest a setback to activity in the fourth quarter of FY 2017," the report added.

Earlier this month, India's official statistician in New Delhi also lowered the country's gross domestic product growth estimates for 2016-17 to 7.1 per cent, compared with the 7.6 per cent growth in 2015-16.

American rating agency Fitch has also downgraded India's growth outlook to 6.9 per cent for 2016-17, from the earlier 7.4 per cent, citing the "short-term disruptions" caused by demonetisation.

"The demonetisation of large denomination bank notes has caused short-term disruption in India's economy and led us to downgrade our growth forecasts for 2017," Fitch Ratings said in its latest bi-monthly newsletter released last week.