India’s rank in the Global Economic Freedom Index 2020 dropped 26 spots from 79 to 105, according to the Economic Freedom of the World: 2020 Annual Report released on Thursday.
The report, prepared by Canada’s Fraser Institute, was released in India in collaboration with New Delhi-based think tank Centre For Civil Society. The report pointed out that the prospect of improved economic freedom in India depended on the next generation of reforms in factor markets and in being more open to global trade.
India recorded a marginal decrease in government size – from 8.22 to 7.16 – legal system and property rights – from 5.17 to 5.06 – regulation of credit, labour and business – 6.63 to 6.53 – freedom of trading globally – 6.08 to 5.71. The highest point on a scale of 10 indicates more economic freedom.
“Hong Kong and Singapore retain the top two positions with a score of 8.94 and 8.65 out of 10, respectively,” the report, based on 2018 data said. “The rest of this year’s top scores are New Zealand, Switzerland, Australia, United States, Mauritius, Georgia, Canada, and Ireland.”
India ranks higher than China, which has been accorded the 124th spot. However, Centre for Civil Society President Partha J Shah told PTI that as the ranking is based on 2018 data, several new curbs on global trade, tightening of the credit market due to non-performing assets and Covid-19’s impact on debt and deficits were not taken into consideration in India’s score.
The United States has also dropped to sixth place, the report said, adding that it had “ranked 5th in the previous two years”. The rankings of some other major countries are Japan (20th), Germany (21st), Italy (51st), France (58th), Mexico (68th), Russia (89th), Brazil (105th) and China (124th).
The Central African Republic, Democratic Republic of Congo, Zimbabwe, Republic of Congo, Algeria, Iran, Angola, Libya, Sudan and Venezuela are among the ten lowest‐rated countries.
“Nations in the top quartile of economic freedom had an average per capita GDP of US $44,198 in 2018, compared to $5,754 for bottom quartile nations,” the statement read. “Moreover, the average income of the poorest 10% in the most economically free nations is more than twice the average per capita income in the least free nations. Life expectancy is 80.3 years in the top quartile compared to 65.6 years in the bottom quartile.”
The first Economic Freedom of the World Report was published in 1996 and contained a decade of research by a team, including Nobel laureates and more than 60 leading scholars of several fields. This is the 24th edition of the report and this year’s publication ranks 162 countries and territories for 2018, the latest year for which data is available. The aim of the report is to evaluate personal choice, voluntary exchange and open markets.