India remains a low 120th in economic freedom index

Despite its much-touted economic 'reforms', India continues to languish near the bottom of the table in ease of doing business, a fresh study confirms.

The Index of Economic Freedom 2014, released today by the Washington-based think-tank Heritage Foundation along with The Wall Street Journal, showed India ranking 120th globally, and 25th among 43 countries studied in the Asia-Pacific region.

But the study also noticed the impact of recent reforms. Although it rated India as a "mostly unfree" economy, the country has achieved its highest-ever score in the 2014 Index.

The country's economic freedom score is 55.7, which is unchanged from last year. But over the 20-year history of the economic freedom 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 the 2014 Index of Economic Freedom and director of the Heritage Foundation's Center 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 points.

"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. Economic freedom must be on the agenda as the country prepares for elections in May," Miller said.

The Index of Economic Freedom rates 186 countries in 10 categories of economic performance such as rule of law, regulatory efficiency, limited government and open markets.

Hong Kong and Singapore finished first and second in the rankings for the 20th straight year, while the United States, the world's largest economy, slipped to 12th place from its earlier ranking of 10 (See: US slips to 12th place, Mynmar scores big in economic freedom index)

The world average score of 60.3, which is seven-tenths of a point above the 2013 figure, is the highest in the history of the index. Singapore and Sweden were among 43 countries that achieved their highest scores yet. Among the 178 countries ranked, scores improved for 114 countries and declined for 59.