Whither Modi’s Minimum Governance? India slips in economic freedom

From 123 last year, India this year ranked a dismal 143 in an annual index of economic freedom compiled by the conservative American think-tank Heritage Foundation. India in fact is ranked below Nepal (125), Sri Lanka (112), Pakistan (141), Bangladesh (128) and Bhutan (107).

Only Afghanistan (163) and Maldives (157) among South Asian countries were ranked below India. Hong Kong, Singapore and New Zealand topped the index. China was placed at 111th position and the US 17th.

The Foundation, however, credited Prime Minister Narendra Modi with "reinvigorating" India's foreign policy. It said Modi, who in June 2016 made his fourth visit to the US in two years, has bolstered bilateral ties, particularly in defence cooperation.

India is a significant force in world trade, the report noted, but corruption, underdeveloped infrastructure and poor management of public finance undermine overall development.

The Foundation in its report said despite India sustaining an average annual growth of about 7% over the past five years, growth is not deeply rooted in policies that preserve economic freedom.

It said the state "maintains an extensive presence" in many areas through public sector enterprises. "A restrictive and burdensome regulatory environment discourages the entrepreneurship that could provide broader private sector growth."

"India has technology and manufacturing sectors as advanced as any in the world as well as traditional sectors characteristic of a lesser developed economy. Extreme wealth and poverty coexist as the nation both modernises rapidly and struggles to find paths to inclusive development for its large and diverse population," it said.