By RACHEL SUNDHARAM / ETIG - TIMES NEWS
Shining it may be, but as far as economic freedom goes India is ‘mostly unfree’, according to the ‘04 Index of Economic Freedom. The main culprits cited by the study are a trade policy still highly protective of domestic industry, the notoriously onerous set of regulations and licences required to do business in India, a thriving black economy, a high maximum rate of corporate taxation and a financial sector dominated by state-run banks and directed lending.
India is ranked 121 out of 155 countries, roughly in the same category as neighbouring Pakistan and Sri Lanka, both of which rank above India in the degree of economic freedom available to its denizens.
Political freedom is not one of the criteria for ranking, however.
The study, published annually by The Heritage Foundation and The Wall Street Journal, seeks to measure economic freedom as a composite of scores in 10 categories, including government intervention, trade and monetary policy, foreign investment, banking, wages and property rights.
Scores in each of these categories are aggregated to arrive at an overall score — ranging from 1, representing most free, to 5, least free — for the country.
Based on the score, the countries are categorised as ‘free’, ‘mostly free’, ‘mostly unfree’ and ‘repressed’. India received an aggregate score of 3.53 in ‘04, better than the 3.58 achieved in ‘03. However, its rank deteriorated marginally, from 119 to 121.
The Asia-Pacific region is a classic study of contrasts. It is home to both the most free country — Hong Kong reigning as the freest country for the tenth year in a row — as well as the most ‘repressed’ country — North Korea.
While the three freest economies (Hong Kong, Singapore and New Zealand) in the world belong to the Asia-Pacific, the region is dominated by countries in the ‘mostly unfree’ category. Interestingly, China, which ranked 127 in ‘03, was not ranked this year as data was unavailable.
Times - India Times