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This article was first published 10 years ago

India's top 20 states in economic freedom

March 20, 2014 09:05 IST

Image: Gujarat Chief Minister Narendra Modi with Reliance Industries chairman Mukesh Ambani.
Photographs: Reuters

The states are ranked on various parameters like size of the government, legal structure and security of property rights and regulation of business and labour.

Gujarat tops the list of states in terms of economic freedom, improving its position from fifth place in 2005.

"Gujarat is not only the freest state, but it has also registered the fastest rate of improvement (from 0.46 to 0.65),” the report on Economic Freedom of the States of India (EFSI) by Cato Institute said.

The three states recording the fastest improvement in economic freedom have been among the fastest-growing states. Growth has averaged 12 per cent in Gujarat.



India's top 20 states in economic freedom

Image: Tamil Nadu bags the second position.
Photographs: Reuters

Tamil Nadu

Rank: 2

Score: 0.54

After Gujarat, Tamil Nadu bags the second position.

The study states that the states have become freer over time.

The median score for economic freedom among states had earlier declined from 0.38  in 2005 to 0.36 in 2009, but has now improved to 0.43.

Tags: India

India's top 20 states in economic freedom

Image: Second fastest improver is Andhra Pradesh.
Photographs: Reuters

Andhra Pradesh

Rank: 3

Score: 0.50

The second fastest improver is Andhra Pradesh (from 0.40 to 0.50)," said the report.

The report, jointly authored by economists Ashok Gulati, Bibek Debroy, Laveesh Bhandari and journalist Swaminathan Aiyar, is based on an index which takes into account parameters like size of the government, legal structure and security of property rights and regulation of business and labour.

India's top 20 states in economic freedom

Image: Haryana
Photographs: Courtesy, NHAI

Haryana

Rank: 4

Score: 0.49 

Haryana suffered a significant fall in economic freedom. Haryana ranks first in relation to size of government.

It has also been one of the most rapidly growing states of India and has attracted large investments in the services sector and manufacturing.

India's top 20 states in economic freedom

Image: Himachal Pradesh among top performers.
Photographs: Reuters

Himachal Pradesh

Rank: 5

Score: 0.47

Himachal Pradesh has emerged as one of the top performers in 2013. It has moved up from 10th rank in 2011 to 5th rank in 2013.

...

 

Tags: India

India's top 20 states in economic freedom

Image: Madhya Pradesh, one of the best governed states.
Photographs: Reuters

Madhya Pradesh

Rank: 6

Score: 0.47 

One of the best governed states, Madhya Pradesh scores on legal structure and security and size of government.

The growth in GDP has not been commensurate with the increase in the size of the government, the stuffy points out.

 

India's top 20 states in economic freedom

Image: Rajasthan has shown much improvement.
Photographs: Reuters

Rajasthan

Rank: 7

Score: 0.46 

Rajasthan has shown much improvement in economic freedom, moving up from 12th to 7th position.

Tags: India

India's top 20 states in economic freedom

Image: Biggest improvement has been recorded by Chhattisgarh.
Photographs: Courtesy, Chhatisgarh Tourism

Chhattisgarh

Rank: 8

Score: 0.44 

The biggest improvement has been recorded by Chhattisgarh, which has moved up from 16th to 8th position.

"This state has an even worse problem of Maoism than Jharkhand, but has shown that improved governance and rapid gross domestic product (GDP) growth are nevertheless possible in such difficult circumstances," the report said.

Tags: GDP , India

India's top 20 states in economic freedom

Image: Karnataka scores high on regulation of labour and business.
Photographs: Dipti Desai/Reuters

Karnataka

Rank: 9

Score: 0.43 

Karnataka scores high on regulation of labour and business. Improvements in economic freedom require wide-ranging reforms, not just excellent performance in  one or two areas, the report states.

India's top 20 states in economic freedom

Image: Kerala has sharply improved its index value.
Photographs: Rediff Archives

Kerala

Rank: 10

Score: 0.42

Kerala has sharply improved its index value, from 0.27 to 0.42 in two years. 

An rise in the market wage rate is a major reason.

Tags: Kerala , India

India's top 20 states in economic freedom

Image: Businessmen at BSE offer prayers as part of a ritual to worship the Hindu deity of wealth "Goddess Lakshmi" on Diwali.
Photographs: Amit Dave/Reuters

Maharashtra

Rank: 11

Score: 0.42 

Maharashtra has seen moderate improvements (ranging from 0.01 to 0.09  points).

Maharashtra is among the better performers; the size of  the government has not increased as much as economic growth in recent years. 

Tags: India

India's top 20 states in economic freedom

Image: Kashmiri vegetable sellers gather at a floating market on Dal Lake in Srinagar.
Photographs: Kamal Kishore/Reuters

Jammu & Kashmir

Rank: 12

Score: 0.41 

Jammu & Kashmir had a major setback this year.

The slowest growing state has seen a fall in GDP as well.

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India's top 20 states in economic freedom


Photographs: Kamal Kishore/Reuters

Punjab

Rank: 13

Score: 0.40 

Punjab's rank has slipped substantially, from 6th to 13th position.

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India's top 20 states in economic freedom

Image: Buildings destroyed during floods are seen next to the Alaknanda river in Govindghat in the Himalayan state of Uttarakhand.
Photographs: Reuters

Uttarakhand

Rank: 14

Score: 0.39 

Uttarakhand has suffered a significant decline in their index values since 2011. Poor police investigations and low rates of recovery of stolen property are factors leading to this decline, says the Cato report. 

India's top 20 states in economic freedom


Photographs: Reuters

Odisha

Rank: 15

Score: 0.36 

Odisha has seen a moderate fall in their ratings (0 to 0.02 points). Improvements in economic freedom require wide-ranging reforms.

Tags: Odisha , India

India's top 20 states in economic freedom

Image: Employees attend a training session inside Tech Mahindra office building in Noida.
Photographs: Adnan Abidi/Reuters

Uttar Pradesh

Rank: 16

Score: 0.36 

Uttar Pradesh was second-worst in 2005 (at 19th position) and has now improved to 13th position.

It has shown improved performance in registration of cases under the Prevention of Corruption Act. 

India's top 20 states in economic freedom

Image: New Kolkata International airport.
Photographs: Abhiroop Dey Sarkar

West Bengal

Rank: 17

Score: 0.35 

West Bengal is among the worst performers this year.

India's top 20 states in economic freedom


Photographs: Mitrabarun/Wikimedia Commons

Jharkhand

Rank: 18

Score: 0.33 

Jharkhand has worsened more than any other state, with its index score falling from 0.40 in 2005 to 0.33 in 2013. Because of this, it has slipped from 8th position to 18th.

Tags: India

India's top 20 states in economic freedom

Image: NH2, Guwahati
Photographs: Courtesy, Ministry of Road Transport & Highways

Assam

Rank: 19

Score: 0.32

Assam remains at 19th position. Its economic growth rate has also fallen.

Tags: India

India's top 20 states in economic freedom

Image: A furniture showroom is seen in Patna.
Photographs: Adnan Abidi/Reuters

Bihar

Rank: 20

Score: 0.31 

"Bihar has long been last in this league and continues to be last despite significant improvement after Nitish Kumar became Chief Minister in 2005," states the report.

Tags: India