Arun Kumar | 15 Jan, 2014
Asia's two economic giants, India and China, have been rated
"unfree" and ranked 120th and 137th respectively, in the 2014 Index
of Economic Freedom by US think tank Heritage Foundation and the Wall Street
"The foundations for long-term economic development continue to be fragile
in the absence of effectively functioning legal frameworks," the editors
of the Index wrote.
"Progress with market-oriented reforms has been uneven and has often
backtracked at the urging of those with a political interest in maintaining the
The world's largest economy, the United States, fell out of the top 10, its
score declining enough to leave it in the 12th slot overall as Hong Kong and
Singapore finished first and second in the rankings for the 20th straight year.
Australia, despite a drop in its score, held on to third place.
The 2014 Index finds notable declines for the US in fiscal freedom, business
freedom and property rights, placing it again behind its neighbour to the
north, Canada, a media release said.
Launched in 1995, the Index evaluates countries in four broad areas of economic
freedom: rule of law; regulatory efficiency; limited government; and open
Based on an aggregate score, each of 178 countries graded in the 2014 Index is
classified as "free" (i.e. combined scores of 80 or higher);
"mostly free" (70-79.9); "moderately free" (60-69.9);
"mostly unfree" (50-59.9); or "repressed" (under 50).
In the Asia-Pacific region, India, with a score of 55.7, is ranked 25th among
43 countries. Over the 20 year history of the index, India has advanced its economic
freedom score by almost 11 points, according to the index.
"India has been slowly but surely improving its economic freedom in recent
years. However, the economy still continues to perform below its
potential," said Terry Miller, co-author of Index and director of the
Heritage Foundation's Centre for International Trade and Economics.
From a low base, India has achieved double-digit improvement in half of the 10
indicators of economic freedom, most notably trade, which improved by over 65
"The government efforts to combat corruption have been well noted, and
seem to be making a difference. However, the economy remains relatively closed
off from the rest of the world, and government officials have resorted to
protectionist controls this year," Miller said
"Economic freedom must be on the agenda as the country prepares for
elections in May," he added.