India has fallen 26 spots to the 105th position on the Global Economic Freedom Index 2020, according to a report released on Thursday. The country was at the 79th spot in last year’s rankings. The Economic Freedom of the World: 2020 Annual Report by Canada’s Fraser Institute has been released in India in conjunction with New Delhi-based think tank Centre For Civil Society.
The report said prospects for increasing economic freedom in India depend on next generation reforms in factor markets and in greater openness to international trade. India reported marginal decrease in size of government (from 8.22 to 7.16), legal system and property rights (from 5.17 to 5.06), freedom to trade internationally (6.08 to 5.71) and regulation of credit, labour and business (6.63 to 6.53).
A score closer to 10 indicates a higher level of economic freedom. According to the report, based on 2018 data, Hong Kong and Singapore once again topped the index, continuing their streak as first and second ranked, respectively.
India has been ranked higher than China, which stands at the 124th position.
New Zealand, Switzerland, US, Australia, Mauritius, Georgia, Canada and Ireland round out the top-10.
The report measures economic freedom (levels of personal choice, ability to enter markets, security of privately owned property, rule of law, among others) by analysing the policies and institutions of 162 countries and territories.
The 10 lowest-rated countries are African Republic, Democratic Republic of Congo, Zimbabwe, Republic of Congo, Algeria, Iran, Angola, Libya, Sudan and Venezuela. Other notable rankings include Japan (20th), Germany (21st), Italy (51st), France (58th), Mexico (68th), Russia (89th) and Brazil (105th).
Centre for Civil Society President Partha J Shah said since the ranking is 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 are not reflected in India’s score.