India slips to 112th on World Economic Freedom Index

Q.  India slipped by how many positions to 112th in the World Economic Freedom Index?
- Published on 22 Sep 16

a. 10
b. 11
c. 12
d. 13

ANSWER: 10
 
India slips to 112<sup>th</sup> on World Economic Freedom IndexIndia slipped by 10 ranks to 112th in a list of 159 countries and territories.
  • It fared badly in all categories including legal system and regulation according to the Economic Freedom of the World; 2016 Annual Report
  • THe report say China, Bangladesh and Pakistan ranking back at 113, 121 and 133
  • Bhutan, Nepal and Sri Lanka fared better
  • India fared badly in legal system and property rights (86) sound money policies (130) freedom for global trade (144) and regulation(132)
  • Except for size of government where it fared better (8) a negative performance was evident across the index
  • Report is based on 2014 data and measures economic freedom by analysing policies and institutions of the countries and territories studied
  • The report uses 42 distinct variables, from for example the World Bank, to measure this. Some examples: tax rates, degree of juridical independence, inflation rates, costs of importing, and regulated prices.
  • Each of the 5 areas above is given equal weight in the final score.

    The cornerstones of economic freedom are:

  • Personal choice rather than collective choice;
  • Voluntary exchange coordinated by markets rather than allocation via the political process;
  • Freedom to enter and compete in markets; and
  • Protection of persons and their property from aggression by others

    In practice, the index measures:

  • Size of Government;
  • Expenditures, Taxes, and Enterprises;
  • Legal Structure and Security of Property Rights;
  • Access to Sound Money;
  • Freedom to Trade Internationally; and
  • Regulation of Credit, Labor, and Business.

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