India has slipped 26 spots in the Global Economic Freedom Index and is now on 105th position while last year, the country was at the 79th spot. India has been ranked above China which is on 124th.
The countries topping the index included New Zealand, Switzerland, the US, Australia, Mauritius, Georgia, Canada, and Ireland while at the last were the African Republic, Democratic Republic of Congo, Zimbabwe, Republic of Congo, Algeria, Iran, Angola, Libya, Sudan, and Venezuela.
What is the Economic Freedom Index?
It is an index to measure the “economic freedom” that means the power one individual possesses to make their own economic decisions by analyzing policies and institutions of the country, it also involves observation of indicators like regulation, the freedom to trade internationally, size of government, property rights, government spending, and taxation.
What was the reason for the slip?
As per the reports, the reason for slippage has been a deterioration in the condition of the government regarding size, the judicial system, and property rights, freedom of trade globally, regulation of finance, labor, and business.
A drop in the size of government from 8.22 to 7.16 was observed, while in the legal system and property rights, a drop from 5.17 to 5.06 was marked, fall in freedom to trade internationally which fell from 6.08 to 5.71 and in terms of regulation of finance, labor, and business, 6.53 from 6.63.
(The scoring is done on a scale of 10)
Centre for Civil Society President, Partha J. Shah stated that the ranking was based on 2018 data, many new restrictions on international trade, tightening of the credit market due to NPAs and COVID-19’s impact on debt and deficits were not reflected in India’s score.
The report even marked prospects for increasing economic freedom in India depend on next-generation reforms in factor markets and in more openness to international trade.
Which country performed well?
“While Hong Kong remains the most economically-free jurisdiction in the world, interference from China, including the violent crackdown on pro-democracy protests, severely undermines Hong Kong’s rule of law, which helps ensure equal freedom for all,” mentioned Fred McMahon, Dr. Michael A Walker Research Chair in Economic Freedom at the Fraser Institute.