Economists since the time of Adam Smith have pointed to the strong relationship between prosperity and open markets. But it was not until the work begun in the 1980s by the Fraser Institute on measuring economic freedom, culminating in the now annual Economic Freedom of the World report (published by the Cato Institute in the United States), that the relationship was studied in such a systematic way. More economic freedom is indeed associated with greater wealth, higher growth, and improvements in the whole range of human development indicators. Research spawned by the Economic Freedom of the World report at universities, international organisations and think tanks around the globe continue to enrich our knowledge about the central role of economic freedom in human progress, including its importance in sustaining civil and political liberty.
The Cato Institute is pleased to co-publish the present report on India with Indicus Analytics and the Friedrich Naumann Foundation in New Delhi, and thus add to our knowledge about the effects of policies on outcomes. At a time when India has benefited from sustained high growth as a result of liberal reforms, we considered it important to measure economic freedom within this vast country and to highlight the diverse levels of freedom from state to state. The uneven spread of economic freedom in India is a reminder to state-level policymakers that there is much they too can do to improve the welfare of their citizens. In that sense, we hope that this report can help as an empirical guide to better policies.
The following points come from the data presented here.
- India's economic freedom rating has improved notably since the early 1990s but it is still low and it ranks poorly on a global scale (111th place out of 144 countries).
- The levels of economic freedom from state to state within India vary greatly.
- Numerous states have shown significant increases and significant declines in their economic freedom rankings.
- Greater economic freedom is positively associated with growth at the state level.
Economic Freedom of the States of India: 2013
 By Swaminathan S. Anklesaria Aiyar, Research Fellow, Center for Global Liberty and Prosperity; Bibek Debroy, Professor, Centre for Policy Research, Delhi; Laveesh Bhandari, Founder/Director, Indicus Analytics. |
The Economic Freedom of the States of India 2013 report shows how the states have become freer over time and how Gujarat has widened its lead on the index. The report also includes a chapter on how Bihar, India’s poorest state, took advantage of improved national policies to achieve double-digit growth. Another chapter documents how centralization at the national level violates the Constitution and constrains the economic freedom of the states.
Chapters: |
Economic Freedom of the States of India: 2012
 By Swaminathan S. Anklesaria Aiyar, Research Fellow, Center for Global Liberty and Prosperity; Bibek Debroy, Professor, Centre for Policy Research, Delhi; Laveesh Bhandari, Founder/Director, Indicus Analytics; Ashok Gulati, Chairman of the Commission for Agricultural Costs and Prices (CAP), Government of India. |
The Economic Freedom of the States of India 2012 report demonstrates the significant differences in economic governance that exist in India. It thus has focused attention on state-level reforms to improve growth. The index is based on the Fraser Institute's Economic Freedom of the World report. This year's survey also features chapters on the state of Punjab's long decline and India's urgent need for reform in agriculture and the labor market.
Chapters: Foreword by Ian Vásquez |
Economic Freedom of the States of India: 2011
 By Swaminathan S. Anklesaria Aiyar, Research Fellow, Center for Global Liberty and Prosperity; Bibek Debroy, Professor, Centre for Policy Research, Delhi; Laveesh Bhandari, Founder/Director, Indicus Analytics. |
The major innovation in this year's survey is a separate chapter on Andhra Pradesh, the state that improved economic freedom the most in 2009. Future annual surveys will continue to have a chapter focussing on a state that stands out for very good or very poor performance or a chapter that focuses on significant policy findings from the overall report.
Chapters: Foreword by Ian Vásquez |