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India ranks 143rd in 2017 Index of Economic Freedom

Feb 19, 2017 09:00 IST

India ranked a dismal 143rd in 2017 Index of Economic Freedom, which released in the third week of February 2017.

The index was released by a top US based Think Tank, The Heritage Foundation. The Think Tank in its Index of Economic Freedom report stated that despite India sustaining an average annual growth of about 7% over the last five years, growth is not deeply rooted in policies that preserve economic freedom.

In its 23rd edition, the Index analyzed economic policy developments in 186 countries. Countries are graded and ranked on 12 measures of economic freedom that evaluate the rule of law, government size, regulatory efficiency, and the openness of markets.

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Top 5 countries in the 2017 Index of Economic Freedom

Ranking

Country

Score

1

Hong Kong

89.8

2

Singapore

88.6

3

New Zealand

83.7

4

Switzerland

81.5

5

Australia

81.0

Key highlights of the 2017 Index of Economic Freedom

Per capita incomes are much higher in countries that are more economically free. Economies rated “free” or “mostly free” in the 2017 Index generate incomes that are more than double the average levels in other countries.

Greater economic freedom is strongly correlated to overall well-being, taking into account factors such as education, environment, health, innovation, democratic governance and societal progress.

No matter what their existing level of development may be, countries can get an immediate boost in their economic growth by implementing steps to increase economic freedom through policies that reduce taxes, rationalize the regulatory environment, open the economy to greater competition, and fight corruption.

Global average economic freedom increased by 0.2 point to a record level of 60.9 on the 0–100 scale used in the Index of Economic Freedom.

Surprisingly, 49 countries achieved their highest economic freedom scores ever. These countries include China and Russia.

Among South Asian countries, only Afghanistan (163) and Maldives (157) were ranked below India. Nepal (125), Sri Lanka (112), Pakistan (141), Bhutan (107), and Bangladesh (128) surpassed India in economic freedom.

India in the 2017 Index of Economic Freedom

India slipped to 143rd spot in the 2017 Index of Economic Freedom. India’s overall score of 52.6 points is 3.6 points less than that of 2016, when India ranked 123rd.

Corruption, poor management of public finance and underdeveloped infrastructure continue to undermine overall development of the country. However, the economy has sustained an average annual growth rate of about 7% over the past five years.

In addition, growth is not deeply ingrained in policies that preserve economic freedom. Progress on market-oriented reforms has been uneven.

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