India has slipped by 10 positions to 112th, out of 159 countries and territories according to the Economic Freedom of the World: 2016 Annual Report.China, Bangladesh and Pakistan lagged behind India at 113th, 121st and 133th ranks respectively; Bhutan (78), Nepal (108) and Sri Lanka (111) were better placed on the World Economic Freedom Index.

• India has fared badly in all categories i.e. legal system and property rights (86), sound money (130), freedom to trade internationally (144) and regulation (132) except the size of the government (8),” the report said.

• According to the report, Hong Kong has the highest level of economic freedom worldwide, followed by Singapore, New Zealand, Switzerland, Canada, Georgia, Ireland, Mauritius, the UAE, Australia, and the UK.

• The 10 lowest-ranked countries are: Iran, Algeria, Chad, Guinea, Angola, Central African Republic, Argentina, Republic of Congo, Libya and lastly Venezuela.The report is based on data from 2014 and measures the economic freedom by analysing the policies and institutions of all 159 countries and territories.

World Economic Freedom Index

The Index of Economic Freedom is an annual index and ranking created by The Heritage Foundation and The Wall Street Journal in 1995 to measure the degree of economic freedom in the world’s nations. The creators of the index took an approach similar to Adam Smith’s in The Wealth of Nations, that “basic institutions that protect the liberty of individuals to pursue their own economic interests result in greater prosperity for the larger society.