India's economic growth hit a three-year low during the April-June period, enveloping Prime Minister Narendra Modi in a barrage of criticism for poor execution of major reforms such as the recent national sales tax and demonetization.
But a new World Economic Forum study indicates his government has made progress in strengthening overall business sentiment.
The South Asian giant ranked 40th out of 137 countries on the organization's 2017 global competitiveness ranking — one spot lower than last year's edition, but still its highest-ever score in WEF's current methodology.
National competitiveness is defined as a set of institutions, policies and factors that determine a country's level of productivity.
Improvement across most pillars of competitiveness, particularly infrastructure and higher education, reflects recent public investments in these areas, WEF said. Strides in labor market efficiency, especially the nation's ability to attract and retain talent, also helped India's 2017 ranking, the Swiss foundation added.
"The quality of institutions has increased further, especially in terms of efficiency of public spending."
Modi's government has pledged to spend a record $60 billion on infrastructure this financial year, but concerns are rampant that lower tax collections and weak economic growth could force New Delhi to cut expenditures.