India may be the fastest growing economy in the world, but it still finds itself way behind other economies in preserving economic freedom.
In a recent study on economic freedom, India ranked 143 out of 180 countries. What is more interesting is the fact that India's neighbouring countries, including Pakistan, performed better. The study was conducted by US-based think tank the Heritage Foundation which rates economic freedom.
"Although the economy has sustained an average annual growth rate of about 7 per cent over the past five years. Growth is not deeply rooted in policies that preserve economic freedom. Progress on market-oriented reforms has been 'uneven'," the Heritage Foundation said.
From India's rule of law to regulatory efficiency to open markets, the report has taken multiple economic aspects into consideration. "A restrictive and burdensome regulatory environment discourages the entrepreneurship that could provide broader private-sector growth," the report highlighted.
The report also said that the corruption, underdeveloped infrastructure, and poor management of public finance continue to undermine overall development of the country.
The Economic Freedom report underlined some of the problems in India's open market. It said: "State-owned enterprises in India distort its economy."
"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," the report added.
Other neighbouring countries who did better than India are Nepal (125), Sri Lanka (112), Pakistan (141), Bhutan (107), and Bangladesh (128). These countries were ranked higher than India.