India’s ranking for economic freedom fell to 105th in 2018 from 79 the previous year despite the report to this effect not taking into account the impact of Covid-19 which would be available in 2020.
The major disappointment for India comes from the “international trade freedom” parameter on which India ranks 139th against 137 in 2017, showed the annual report on World Economic Freedom: 2020, released today by the Center for Civil Society in collaboration with Canada’s Fraser Institute.
The other big disappointment was the ranking of India on “regulation” where it occupied the 122nd place in 2018 against 114th a year ago.
However, the country gained a place to finish 88th on “healthy money” in the last report compared to 89 in the previous one.
It retained its position at the 79th on “Legal systems and property rights”.
When it comes to the size of government, the main claim of the Modi government, the country’s ranking fell to 54th place in 2018, from 36 the previous year.
India reported decreases in each of the components of economic freedom. A score closer to 10 indicates a higher level of economic freedom. Its score fell to 7.16 from 8.22 on the size of government, to 5.07 from 5.17 on the legal system and property rights, to 8.34 from 8.37 on sound money, at 5.71 out of 6.08 on international trade freedom and 6.53 out of 6.69 on credit, labor and business regulation.
Parth J Shah, president of the Center for Civil Society, said, “The center and state governments have initiated business process reengineering to simplify business registration and compliance. There is no doubt that some of these efforts impacted India’s score. “
He said that with the ranking based on 2018 data, many new restrictions on international trade, the credit market tightening due to NPAs and the impact of Covid on debt and deficits are not reflected in India’s score.
The government continues to play a leading role in many areas of economic life. Prospects for increased economic freedom in India depend on next-generation reforms in factor markets and greater openness to international trade, he said.
World economic freedom measures how well countries’ policies and institutions support economic freedom. This year’s publication ranks 162 countries and territories.