INDEX OF ECONOMIC FREEDOM

Subject : International Reports

Context : Recently, the Heritage Foundation has released the 2021 Index of Economic Freedom.

Concept :

Index of Economic Freedom

It is an annual guide published to measure the progress made in advancing economic freedom which it claims brings greater prosperity.
The index ranks 12 indicators from property rights to financial freedom under four categories i.e. rule of law, size of government, regulatory efficiency and open markets.
It believes that the ideals of economic freedom are strongly associated with healthier societies, cleaner environments, greater per capita wealth, human development, democracy, and poverty elimination.
The 2021 edition measures economic freedom only in independent countries where governments exercise sovereign control of economic policies.
It relies primarily on the World Trade Organization’s annual World Tariff Profiles for trade-weighted average tariff rates in order to reflect the most authoritative and consistent tariff information.

Key Highlights of 2021 Index of Economic Freedom

184 countries were covered in the study this time and the period of study is July 2019 to June 2020.
The Heritage Foundation decided to exclude Hong Kong from its rankings for the first time ever.
Singapore topped the global ranking for the second year in a row in the latest Economic Freedom Index.
The global top five are New Zealand in second place with 83.9 points, Australia in third (82.4 points), Switzerland in fourth with 81.9 points and Ireland (81.4 points).
The Asia-Pacific nations generally scored lower than the world average in seven of 12 indicators such as property rights, judicial effectiveness, government integrity, monetary freedom, trade freedom, investment freedom and financial freedom.

India and 2021 Index of Economic Freedom

India came in around the middle of the pack among Asia-Pacific countries ranking 26th out of 40 countries, scoring 56.5 points.
Globally, the Foundation rates India’s economy as the 121st freest.