2009 index of economic freedom

India’s economic freedom score is 54.4, making its economy the 123rd freest in the 2009 Index. Its score is only 0.3 point higher than last year because improvements in financial freedom, government size, and business freedom were offset by significant decreases in investment freedom and labor freedom. India is ranked 25th out of 41 countries in the Asia–Pacific region, and its overall score is below the world average.

Renouncing its previous insistence on central planning, India continues to move forward slowly with market-oriented economic reforms. Achieving average growth of about 8 percent over the past five years, the economy has emerged as a leader in information technology and other business process sectors. However, progress in strengthening institutional capacity and enhancing overall economic freedom and prosperity has been rather slow and marginal. India has no notably strong economic institutions, and the few areas that score better than the world average are government size, labor freedom, and property rights.

India could improve in business freedom, trade freedom, financial freedom, investment freedom, and freedom from corruption. The average tariff rate is high, and non-tariff barriers further impede trade. Foreign investment is overly regulated, and the judicial system remains clogged by a large case backlog. Public debt is high, and the general government fiscal deficit continues to grow.