Free economy a dream? Asian tiger, dragon caged

ECONOMY CLASS: Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao at a press briefing in Beijing.

ibnlive.com is on mobile now. Read news, watch videos
be a Citizen Journalist. Log on to m.ibnlive.com NOW!

Related Stories

• Indian brains helped US more than their money helped us

• India 4th most secure country, claims security index

• Losing heritage, an Indian habit

Top Headlines

Top Videos

Most Popular

• Gujarat dry status an ideological hangover? 

• India dry, Pawar says well-stocked for 13 months | Drought diary 

• Manmohan, Gilani fix up meeting without a date 

• India puts it in writing: Pak planned 26/11 

• Burger King apologises to Hindus for offensive ad 

• SC takes up plea against gay sex, issues notice 

• Suspected Dawood aide acquitted in fake currency case 

• Another 'lover' arrested at Sania Mirza's house 

• Mumbai, Pune and Delhi face 30-40 pc water shortage 

• Politicos get into the ABC of Varun's Z-plus security 

• MP drought-hit 

• Sariska tigers siblings, incest dangerous: Experts 

• 2016 Games contenders go all out to woo voters 

• Watch: Zardari admits to nurturing terrorists 

• SC takes up plea against gay sex, issues notice 

• CJ: Delhi-based builders make off with money 

• Pune reels under 40 per cent water cuts 

• RTI against college lands DCE student in trouble 

• Sports officer attacked for fighting corruption 

• Watch: Ferreira talks about sports and Union Budget 

• Forbes India: 20 stocks you must own 

• Dry state Gujarat reels under hooch tragedy 

• Burger King apologises to Hindus for offensive ad 

• India puts it in writing: Pak planned 26/11 

• Army honours Mohanlal with Lieutenant Colonel post 

• Another 'lover' arrested at Sania Mirza's house 

• MP drought-hit 

• Sariska tigers siblings, incest dangerous: Experts 

• Mamata dismisses corporate structure for railways 

• Mysore: PFI activists clash with police, lathicharged 

Photogallery

Find us on Facebook | Join IBNLive community

Stay ahead with G-Talk Buddy | Click now!

New Delhi: India and China, the two fastest growing major economies of the world, may be hot investment destinations globally, but they are placed abysmally low on a list of nations in terms of their economic freedom.

While India ranks 115th, China is even lower at 126th in the Economic Freedom Index compiled by US-based think-tank Heritage Foundation.

Hong Kong, which prides itself on its laissez-faire economic policy, emerged as the Asian giant and was ranked world's freest economy on Tuesday for a 14th straight year.

Singapore – which was ranked No. 2 – is catching up fast. Ireland, Australia and New Zealand are among the top five.

Other countries in the top ten include the US, the UK, Chile, Switzerland and Canada.

Heritage Foundation said in its annual review of economic freedom across the world that India's economy is 54.2 per cent free, which makes it the world's 115th freest economy.

A score of 50-59.9 per cent reflects "mostly unfree", it said.

"Its (India's) overall score is 0.1 percentage point higher than last year, partly reflecting improved labour freedom. India is ranked 21st out of 30 countries in the Asia-Pacific region, and its overall score is lower than the regional average," Heritage Foundation said.

India has no significantly strong economic institution, and the few areas that score better than the world average are smaller government size, labour freedom, and property rights. Government expenditure is relatively lower, it noted.

The study said India could improve in several areas, including freedom to do business, engage in trade, invest and freedom from corruption.

The United States fell to fifth place from fourth last year, and was set back by relatively high tax rates following tax cuts in other advanced economies and by government spending amounting to more than a third of gross domestic product.

Countries like China could grow even faster and in a more sustained manner if they embraced financial liberalisation, the foundation said.

Mauritius and Bahrain made it into the top 20 freest economies, while Mongolia, jumped 16 places to 62nd place and into the "moderately free" economy category, from "mostly unfree" last year, following trade liberalisation and fiscal reforms, including a flat tax.

Hong Kong was rated slightly less free than a year ago due to a pick-up in inflation which resulted in less monetary freedom. Arch-rival Singapore saw a slight improvement from last year's survey and was rated the freest market for business and labour.