India is breathing down the dragon’s neck. Jumping five places, India was ranked 50th in the World Economic Forum’s Global Competitiveness Report, released on Wednesday. With China dropping three places to 49, India has closed the gap vis-a-vis its neighbour.

Finland remains the most competitive economy and tops the world rankings for the third year. The US is second, followed by Sweden, Denmark, Taiwan and Singapore. Brazil fell 8 places to the 65th slot.

China’s rank dropped, as its macroeconomic environment score took a marginal hit. “Both China and India have had an excellent growth performance in recent years but both countries continue to suffer from institutional weaknesses,” it said.

The rankings are drawn from a combination of hard data, publicly available for each of the economies studied, and the results of the Executive Opinion Survey, a comprehensive evaluation conducted by the WEF, together with its network of partner institutes in the countries covered by the report. This year nearly 11,000 business leaders were polled in a record 117 economies worldwide.

The survey is designed to capture a broad range of factors affecting an economy’s business environment. “Particular attention is placed on elements of the macroeconomic environment, the quality of public institutions which underpin the development process, and the level of technological readiness and innovation,” WEF said.

“The increasing inflows of FDI to skill and technology-intensive sectors observed over the past few years have certainly succeeded in boosting the mood of the business community,” said Augusto Lopez-Claros, Chief Economist and Director of the World Economic Forum’s Global Competitiveness Programme.

Remaining worries in India, however, stem from the slight progress made in fiscal adjustment — the country has been running some of the world’s largest budget deficits, close to 10 per cent of GDP and ranked 116th among the 117 countries covered in the report — the low penetration rates of new technologies, such as mobile telephones, PCs, Internet use and low enrolment rates for higher education.