Seminar on 'Economic freedom index' today

The Federation of Andhra Pradesh Chambers of Commerce and Industry (Fapcci), in association with Hyderabad-based India Institute of Economics and the Rajiv Gandhi Institute of Contemporary Studies, New Delhi, is organising a half-day seminar on 'Economic Freedom Index: Its relevance for economic development' in Hyderabad on November 23.

Briefing mediapersons here on Wednesday, B Yerram Raju, director of Indian Institute of Economics, said, "The economic freedom index helps states access foreign direct investments and foreign investment institutions with considerable ease as it measures the ability of the state to facilitate investments. Revenue expenditure, GDP and large employment in the public sector are indicators of the size of the government, and power subsidy to domestic consumers, taxes on income, commodities and services, property and capital transactions and other duties are indicative of the extensive role played by the government in the economy. These have been factored into the economic freedom index of the state."

The other important area is in relation to enabling environment for entrepreneurs to take decisions relating to investment and employment.

The ability of the state to restructure such high transaction costs in terms of effective policies of regulating credit, labour and business is an important measure to economic freedom. The seminar proposes to discuss all these aspects," he said.

According to him, in this year's index, Hong Kong retained the highest rating for economic freedom with 8.7 out of 10, closely followed by Singapore at 8.5, while New Zealand, Switzerland and the US tied for the third position with ratings of 8.2.

India's ranking was 53, and the Composite Economic Freedom of India ranked Andhra Pradesh as number two in 2005.