Economic Freedom Index 2020: India slips 26 spots to 105th position

India has fallen 26 spots to rank at the 105th position on the Global Economic Freedom Index 2020, as per an annual report released on September 10, 2020. The country was ranked at the 79th spot in last year's rankings.

The rankings were published in the Economic Freedom of the World: 2020 Annual Report by Canada's Fraser Institute, which was released in India in conjunction with the Indian think tank Centre For Civil Society.

As per the report, prospects for increasing economic freedom in India depend on next-generation reforms in factor markets and in greater openness to international trade.

Report: Key Highlights

• Hong Kong topped the index yet again, followed by Singapore at the second rank, based on 2018 data. 

• The other countries ranked in the top 10 include New Zealand, Switzerland, US, Australia, Mauritius, Georgia, Canada and Ireland. 

• India was ranked at 105th position, 26 places below its last year's rank. However, it was still ranked higher than China, which was ranked at the 124th position.

• Other notable rankings include Japan that was ranked at the 20th position, Germany at the 21st position, Italy at 51st rank, France at 58th, Mexico at 68th spot and Russia at 89th rank.

• The 10 lowest-ranked countries include the African Republic, Democratic Republic of Congo, Zimbabwe, Republic of Congo, Algeria, Iran, Angola, Libya, Sudan and Venezuela.

The report analysed the policies and institutions of 162 countries and territories across the world and ranked them on the basis of the following parameters:

- Levels of personal choice

- Ability to enter markets

- Security of privately owned property

- Rule of law

Economic Freedom in India

As per the report, India reported marginal decrease in government size from 8.22 to 7.16 and legal system and property rights from 5.17 to 5.06, freedom to trade internationally from 6.08 to 5.71 and regulation of credit, labour and business from 6.63 to 6.53. The closer the score is to 10, it indicates a higher level of economic freedom.

According to the President of the Centre for Civil Society, Partha J Shah, the 2020 rankings are based on 2018 data. Hence, many new restrictions on international trade, tightening of the credit market due to NPAs and COVID-19's impact on debt and deficits are not reflected in India's score.