It notes that even though the country's gross domestic product (GDP) rose 6.6 percent annually since 1991, the per capita income remains just above $1,000 - a third and a tenth, respectively, of China and Russia. Speaking about the dichotomy between rural and urban incomes, the survey describes the country's competitiveness as displaying 'reversed development'.

This comment once again underscores the need for the government to ensure that greater attention is paid to rural development. Otherwise, economic and technological growth in urban areas would be meaningless as the country would continue to have an unacceptable disparity in standards of living.

Merely providing incentives for industry and services is not going to bring India higher on the competitive indices of the world. Unless there is uniformity in development of rural and urban areas, India will continue to lag behind.

On the plus side, the forum ranks India 28th in the most complex areas measured by the business sophistication and innovation subindex, ahead of several advanced economies. It also rates highly the fairly well-functioning institutions, bustling financial markets and a sound banking sector along with a vast domestic market. But despite these positive indicators, China is still ranked higher at 29th on the overall index, though Brazil is lower at 56th and so is Russia at 63rd. Pakistan is way down at 101st.

These relative ratings are enlightening, especially since India is way behind other South Asian countries in the World Bank-International Monetary Fund (IMF) Doing Business Index for 2010. Pakistan, Bhutan, Nepal, Bangladesh, the Maldives and Sri Lanka are all ranked higher. India's ranking slipped owing to the fall in parameters like starting a business, obtaining credit and investor protection. It has, however, improved on the 'closing a business' indicator by taking steps to ease resolution of insolvency cases.

On the parameter of starting a business, India fell three ranks to 169th and on getting credit, it fell by three notches to the 30th rank. Here too, the stress is on credit in rural areas. Citing a recent research report, the survey said poor women in rural areas have difficulty in gaining access to the formal financial system. In other words, the concerns are not just about foreign investors but also about the poor in rural areas in this country.

The one issue that appears paramount in both these indices is that it is not just enough to bring about deregulation and ease investment procedures for either foreign and Indian entrepreneurs. There has to be a simultaneous developmental process in rural areas, especially involving the poorest and the marginalised segments of society.

It is thus clear that unless the dichotomy of uneven growth in this country is eliminated, there is no way it can qualify to be among the most competitive or most attractive business destinations in the world.

(13-09-2009 Sushma Ramachandran is an economic and corporate analyst. She can be reached at sushma.ramachandran@gmail.com)