Of the 104 countries analysed this year, India ranks a poor 70th. Reason: low quality of secondary education, high cost of starting a business, and lack of government effectiveness.

So check out which are most prosperous nations on earth and how do India's neighbours do.

India; Rank 70

"India has a relatively entrepreneurial culture. It requires government effectiveness and the tackling of corruption," Alan McCormick, managing director, Legatum Institute, which has brought out the index, told PTI.

India has an exceptionally weak score in commercialising new ideas via entrepreneurship, a factor which the Index identifies as a major contributor to growth.

India's score in terms of entrepreneurship is surprisingly better than Austria at 2 and Canada at 14. It, however, is doing a lot in terms of commercialising innovation.

The increase in capital and education costs contributes directly to the value of physical and human capital and thus directly increases economic output.

Poor governance and excessive bureaucracy impose costs on business and thus restrain growth, said the report, which was released last week.

The Institute also ranks India at No 10 on its 'Who's Going Places' list, with China on No 6.

"India outstrips many South Asian nations in various aspects of wealth creation. It ranks stronger with reference to other Asian countries in terms of avoiding dependence on commodity exports and foreign aid," McCormick said.

Text: The 2008 Legatum Prosperity Index and PTIM

Image: A boy sells the national flag on India's 61st anniversary of Independence at a junction in Mumbai on August 15, 2008. | Photograph: Pal Pillai

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