Index of Economic Freedom

India was ranked 143rd out of 186 economies in the annual Index of Economic Freedom 2017 that measures the degree of economic freedom in the countries of the world. 

• The index was released by top US based Think Tank, The Heritage Foundation with Wall Street Journal. 

What is economic freedom?

• Economic freedom is the fundamental right of every human to control his or her own labor and property. 
• In an economically free society, individuals are free to work, produce, consume, and invest in any way they please. 
• In economically free societies, governments allow labor, capital, and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.

• Thus, essentially, economic freedom is dependent on the following broad dimensions:
  • Security of privately-owned property,
  • levels of personal choice,
  • ability to enter markets and
  • the rule of law.

In this edition, India’s overall score was 52.6 points, 3.6 points less than scored in 2016 when it was ranked 123rd. 

How countries are ranked? 

The Index of Economic Freedom ranks countries based on score ranging 0 to 100, with 0 being the least free and 100 the most free. 

The score is based on ten factors of economic freedom, separated into four categories, using statistics from international organizations like World Bank, IMF, Economist Intelligence Unit and Transparency International. 

Based on the score, countries are grouped in 5 different categories, 

• Free (80–100), 
• Mostly Free (70.0–79.9), 
• Moderately Free (60.0–69.9), 
• Mostly Unfree (50.0–59.9) and 
• Repressed (0–49.9)

Key Highlights of 2017 Economic Freedom Index 

• Top 5 countries in this edition of index are Hong Kong (1st), Singapore (2nd) and New Zealand (3rd), Switzerland (4th) and Austria (5th). 
• India with 52.6 points score was ranked 143rd. It was placed in the category of “Mostly Unfree” Economies (points ranging from 50.0-59.9). 
• India’s neighbours, Nepal (125th), Sri Lanka (112th), Pakistan (141st), Bhutan (107th), and Bangladesh (128th) have surpassed India. Only Afghanistan (163rd) and Maldives (157th) were ranked below India. 
• China with a score of 57.4 points ranked 111th which is 5.4 points above 2016 score. United States was ranked 17th with a score of 75.1 points. 
• The world average score was 60.9, highest recorded in the 23-year history of the index. 
• 49 countries majority of developing countries and also Norway and Sweden have achieved their highest-ever index scores.