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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
Rajasthan
Rank: 7
Score: 0.46
Rajasthan has shown much improvement in economic freedom, moving up from 12th to 7th position.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
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
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
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.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
West Bengal
Rank: 17
Score: 0.35
West Bengal is among the worst performers this year.
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India's top 20 states in economic freedom
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.
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India's top 20 states in economic freedom
Assam
Rank: 19
Score: 0.32
Assam remains at 19th position. Its economic growth rate has also fallen.
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India's top 20 states in economic freedom
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.