World Economic Forum

The Global Competitiveness Report

We define competitiveness as the set of institutions, policies, and factors that determine the
level of productivity of a country. The level of productivity, in turn, sets the level of prosperity
that can be reached by an economy. The productivity level also determines the rates of return
obtained by investments in an economy, which in turn are the fundamental drivers of its
growth rates. In other words, a more competitive economy is one that is likely to grow faster
over time.
This open-endedness is captured within the GCI by including a weighted average of many
different components, each measuring a different aspect of competitiveness. In addition,
Appendix A assesses statistically the robustness ( the quality or condition of being strong and in
good condition) of the GCI as an appropriate estimate of the level of productivity and
competitiveness of an economy.
The components are grouped into 12 pillars of competitiveness:
Appendix A
Overview on Performance & Ranking of Pakistan compare with India
As of 2020, With $2,709 bn, India's GDP is around ten times higher than Pakistan's gdp of $263
bn. In nominal terms, the gap is wider (above ten times) than ppp terms (8.3 times). India is the
5th largest economy in the world in nominal method and on 65 number according to GCI
(Global Competitiveness Index) . While the nominal ranking of Pakistan is 48, and on 122
number according to GCI (Global Competitiveness Index) . India's economically largest state,
Maharashtra, has GDP ($398 billion) much greater than Pakistan. Even the second largest
economy Tamil Nadu ($247 bn), is very close. The margin between these two countries was
lowest in 1993 when the Nominal GDP of India was 5.39x of Pakistan, and the highest was in
1973 (13.4x).

.
What are the Factors affecting most for doing business in both countries:

Factors Pakistan India

Factors Pakistan India
(%) (%)
Corruption 15.6 10.9 Population (millions) 230.84 1,417.0
Crime 10.8 7.4 Population growth (%) 1.85 1.41
Taxes 9.2 9.6 Literacy Rate 62.3 77.7
Government Instability 7.9 5.7 GDP per capita (USD) 1250.00 2,321.10
Tax Regulations 6.5 11.7 Economic growth (%) 2.0 7.3
Policy instability 5.8 3.6 Inflation (%) 7.96 5.1
Inflation 7.96 5.1 Unemployment rate (%) 12.0 6.43
Infrastructure 5.1 4.2 Exports (USD billions) 32.8 128.1
Foreign Currency Regulations 4.3 4.6 Imports (USD billions) 80.02 172.1
Restrictive labor regulations 2.4 4.4 Foreign debt (% of GDP) 34.5 19.9
Innovation 2.3 7.3 Exchange rates (USD) on
223.00 82.82
7-10-2022
Poor Public Health 1.9 8.5 Exchange rates (EUR) on
217.17 80.66
7-10-2022

According to world bank Pakistan has ranked on 108 position while india is placed higher at the
63 position. India manufacturing sector is growing strongly over the years and service sector
contributing 60% and the most important reason for failing in Pakistan manufacturing sector is
political instability Pakistan contributing 9% in GDP while india contributing 10% of US GDP and
service sector contributing 6.2% in GDP. Both countries have been neck-to-neck in GDP per
capita terms. GDP per capita of Pakistan was 1.54x of India in 1970. Margin is being wider in
favor of India since 2009. In 2020, India's per capita income was 1.56 times higher than
Pakistan's on an exchange rate basis, with an all-time high of 1.63x in 2019.

After 19 years, India's GDP growth rate (-7.97) is lower than Pakistan's (-0.39) in 2020. India
attains a maximum GDP growth rate of 9.63% in 1988 and a minimum of -5.24% in 1979.
Pakistan reached an all-time high of 11.35% in 1970 and a record low of 0.47% in 1971. From
1961 to 2017, Pakistan grew by more than 10% in 3 years while India never. The GDP growth
rate was negative in four years for India, but Pakistan has never shown a negative growth rate.