India’s one-position drop to 87th in the Economic Freedom Index underscores the nation’s need for pivotal reforms, especially in international trade and regulation.
India has experienced a minor slide in its global economic freedom ranking, landing at the 87th spot out of 165 countries according to a recent report. While there has been considerable improvement since 1980, India’s relative progress seems to lag compared to other countries.
Details of the Report
The ‘Economic Freedom of the World: 2021 Annual Report’ was disclosed by Canada’s Fraser Institute, in association with New Delhi-based think tank, Centre For Civil Society. It highlighted India’s slip from its previous 86th position, in spite of enhancements in certain economic dimensions.
India’s Progress and Setbacks
India has witnessed a steady growth in its rating since 1980, moving from 4.90 to 6.62. Although this indicates substantial improvement in absolute terms, it also reflects India’s insufficient progress relative to other nations, causing a drop in its ranking. In specific domains like the size of the government and regulation of credit, labour, and business, India reported marginal increases, indicating a positive stride in economic freedom.
Within South Asia, India’s economic freedom is commendable as per the report. Globally, however, Singapore leads the index, followed by nations like Hong Kong, Switzerland, and New Zealand. Interestingly, India has surpassed China, which is positioned at 111th, showcasing relative superiority in economic freedom within the Asian context.
India has seen mixed results in various sectors. It scored slightly higher in the size of government and regulation, while it witnessed a dip in the legal system, property rights, and freedom to trade internationally. A score nearing 10 is indicative of greater economic freedom, guiding where reforms are paramount.
Focus on Reforms
With India ranking 114th in freedom to trade internationally and 116th in regulation, strategic reforms in these areas are imperative. These rankings highlight the critical areas where India needs to enhance its policies to improve its stance in economic freedom and to foster a more conducive economic environment.
While the country has made substantial absolute progress over the decades, its relative global stance indicates there is considerable room for improvement. Prioritizing and implementing strategic reforms in the identified areas are crucial for India to climb the economic freedom ladder and create a more liberal and prosperous economic landscape. This becomes especially significant in the competitive global economic arena, where each stride counts towards achieving comprehensive economic freedom and development.
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