Index of Economic Freedom-2016

2016 Index of Economic Freedom

Question: In the recently released Index of Economic Freedom-2016 India is ranked –
(a) 158th
(b) 123rd
(c) 125th
(d) 120th
Ans (b)
Related facts:

  • The Index of Economic Freedom is an annual index and ranking to measure the degree of economic freedom in the world’s nations.
  • It is created by The Heritage Foundation and The Wall Street Journal in 1995 and published every year.
  • The index scores nations on 10 broad factors (Business Freedom, Trade Freedom, Monetary Freedom, Government Size/Spending, Fiscal Freedom, Property Rights, Investment Freedom, Financial Freedom, and Freedom from Corruption and Labor Freedom) of economic freedom using statistics from organizations like theWorld Bank, the International Monetary Fund and the Economist Intelligence Unit.
  • The American think-tank released the Index of Economic Freedom-2016 on 1 February 2016.
  • In the Index of Economic Freedom-2016, a total of 186 countries included and 178 are ranked.
  • In the index the ranking of Afghanistan, Iraq, Libya, Liechtenstein, Somalia, Sudan, Syria and Yemen is not provided.
  • A total of 178 countries included in the index and are classified into the following categories:
  1. 5 economies earned the Index’s designation of “free” (scores of 80 or above)
  2. 87 are classified as “mostly free” (70-79.9) or “moderately free” (60-69.9).
  3. 62 are considered “mostly unfree” (50-59.9) and
  4. 24 are “repressed” (scores below 50)
  • Of the 178 economies ranked in the 2016 Index, only five in top ten (Hong Kong-88.6, Singapore-87.8, New Zealand-81.6, Switzerland-81, and Australia-80.3) earned the designation of “free” with scores above 80.
  • Others in the top ten but rated “mostly free” were Canada, Chile, Ireland, Estonia and United Kingdom.
  • The last five ranked countries in the index are respectively -178. North Korea (score -2.3), 177. Cuba (Score -29.8), 176. Venezuela (Score -33.7), 175. Zimbabwe (Score -38.2) 0.174 Turkmenistan (Score -41.9).
  • In 2016 Index of Economic Freedom: Though still rated as “mostly unfree”, India with a score of 56.2 and ranked 123 is out of 100 was among 32 countries which achieved their highest economic freedom scores ever in the 2016 Index.
  • India recorded an increase of 1.6 points in the score compare to the last year.
  • It may be noted that India was ranked 128th in last year Index.
  • According to this year release, among 41 countries of Asia-Pacific region India ranks 25th.
  • India scored its best scores on government spending (78.1), fiscal freedom (77.1), monetary freedom (72.8) and trade freedom (71.0).
  • Among other BRICS nation, Russia plunged 10 places in the rankings to 153rd, with its score deteriorating by 1.5 points. The rankings of South Africa, Brazil, and China declined to 80th, 122nd, and 144th, respectively.

Reference:
http://www.heritage.org/index/
http://www.heritage.org/research/reports/2015/12/2016-index-of-economic-freedom-yet-more-evidence-of-free-trades-benefits