Gujarat tops in economic freedom among states: study

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New Delhi: Giving a thumbs up to BJP’s prime ministerial candidate Narendra Modi ahead of the general elections, a report said Gujarat tops the list of states in terms of economic freedom, improving its position from the 5th 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 second fastest improver is Andhra Pradesh (from 0.40 to 0.50),” said the report on Economic Freedom of the States of India (EFSI)- 2013.

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.

Coming just ahead of the general elections, the report said Gujarat has widened its lead at the top of the economic freedom table, with an index score of 0.65 (on a scale from 0 to 1.0).

Tamil Nadu, it added, remains in second position, but some distance behind, with a score of 0.54. Next in line come Andhra Pradesh (0.50), Haryana (0.49), Himachal Pradesh (0.47) and Madhya Pradesh (0.47).

As per the report, Bihar ranks at the bottom with a score of 0.31, preceded by Assam (0.32) and Jharkhand (0.33).

“Bihar has long been last in this league and continues to be last despite significant improvement after Nitish Kumar became Chief Minister in 2005,” it added.

Assam remains at 19th position. 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.

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.

Rajasthan is another state that has shown much improvement, moving up from 12th to 7th position. On the other hand, Punjab’s rank has slipped substantially, from 6th to 13th position. Its score has remained almost unchanged, but many other states have improved their scores while Punjab has not, it added.

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