Gujarat ranked 'Top State in Economic Freedom' for second time in a row

Published By : Admin | March 19, 2014 | 17:00 IST
"Economic Freedom of the State of India 2013 report lauds development in Gujarat"
"Gujarat, which was ranked at 5th position in the first report in 2005 with a score of 0.46, has been ranked at 1st position in the 2013 report with a score of 0.65."
"The report on Economic Freedom reaffirms the fact that the Gujarat model of development is based on global best practices and is robust, sustainable and all inclusive."
"Major successes in agriculture, social welfare programmes and water resource management has been achieved in Gujarat without an inordinate increase in the size of the government: Report"

According to the latest Economic Freedom of the States of India 2013 report, Gujarat is the top state in economic freedom.

The Economic Freedom of the States of India (EFSI), 2013, estimates economic freedom in the 20 biggest Indian states, using a methodology adapted from the Fraser Institute’s Economic Freedom of the World (EFW) annual reports.

According to the report, 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). Gujarat, which was ranked at 5th position in the first report in 2005 with a score of 0.46, has been ranked at 1st position in the 2013 report with a score of 0.65.


Prepared by renowned economists Mr. Bibek Debroy (Professor – Centre for Policy Research), Mr. Laveesh Bhandari (recipient of best thesis award by the EXIM Bank of India in 1996) and Mr. Swaminathan S. Anklesaria Aiyar (research fellow at the Cato Institute), the report has been published through a joint effort of the Friedrich-NaumannStiftung für die Freiheit, the Cato Institute and the Academic Foundation, New Delhi. The report seeks to measure the level of economic freedom within vast, diverse India, and has, this year, highlighted the importance of state-level policy improvements and experimentation to produce better economic and social outcomes.

The Economic Freedom Index is based on 3 parameters – 1. Size of Government (expenditures, taxes and enterprises) 2. Legal structure and security of property rights and 3. Regulation of Labour and Business. Each state is scored and ranked on these three areas and then given an overall score and rank.

Analyzing the aspect of Size of Government, the report states, “Gujarat’s is a well-known success story through much of the 2000s.  Moreover, it has had major successes in agriculture, social welfare programmes and water resource management.  All of this is being achieved without an inordinate increase in the size of the government.” It may be noted that Shri Narendra Modi has served as the state’s Chief Minister for the entire period that is being mentioned by the authors of the report.


Gujarat has also witnessed significant improvement in its index values and retains its pre-eminent position in ‘Regulation of Labour and Business.’ The report states, “Gujarat has consistently been the best state in this area. It has also recorded the maximum improvement in index score since 2011, and its score of 0.87 is far ahead of the state at the second position. A host of factors have contributed to Gujarat’s continuing improvement. A sharp decline in man-days lost due to strikes and lock-outs, higher market wage rates compared with minimum wage rates, and a decline in pendency of cases are some major factors.”

Enhancing the growth & accolades: A robust vision, a determined mission 

From USA Congressional Think Tanks, Brookings Institutions, Financial Times, Wall Street Journal, policy organization Legatum Institute  to TIME Magazine and India’s ASSOCHAM and India Today, among several other organizations and groups, Gujarat’s development has been hailed universally.

Giving a strong impetus to these dazzling heights of progress is a solid vision, a mission to ensure that each and every citizen of Gujarat is integrated in the develop journey of the state. It is the farsightedness of Chief Minister Shri Narendra Modi that has made the state a strong engine of growth over the last 13 years.

As far as economic freedom is concerned, Shri Narendra Modi has a very clear vision that has been appreciated far and wide. Speaking to the Economic Times in a past interview, Shri Modi had said that the government has no business to be in business. He envisions the role of the Government as that of a facilitator, helping stimulate growth in every way possible. Shri Modi went on to share how in Gujarat things such as greasing the palms of bureaucrats and politicians simply do not exist - there is coherence in polices which is more than enough.

He encapsulated his stand as - “No Red Tape, only Red Carpet is my policy towards investors.”

Today, in a time when crony capitalism and policy paralysis is plaguing the nation, Gujarat comes across as a breath of fresh air. Shri Modi himself says on many occasions that he has no son or son-in-law so who will he accumulate money for? Under his watchful eyes, the money that was earlier used up in enriching the pockets of a handful of middlemen, is now being utilized for the development of the state. Thus, on one hand there is freedom to grow and innovate, while on the other, the fruits of development are reaching the common people of Gujarat!

The force behind Gujarat’s development - 6 crore people of Gujarat!

On many occasions Shri Modi has been asked to whom can the development in Gujarat be attributed? And each time he is asked this question, quickly comes his reply – the 6 crore people of Gujarat! The development that the state has seen in the past 13 years has the scent of hardwork and sweat of 6 crore Gujaratis. The people of the state have shown amazing determination, zeal and commitment to take the state to newer heights of progress every single moment.

Recently, Asia’s leading brokerage house CLSA called Gujarat among the fastest growing states in India and called its development model most unique. It lauded Gujarat’s success in industry, agriculture and particularly praised the Government policies that have drawn investment in the state.

One of the key points CLSA noted is that Gujarat’s growth is characterized by low reliance on central funds. This yet again vindicated what Shri Modi says - that the growth of Gujarat is due to the people of Gujarat, no Hand can take imaginary credit for the growth of the state!

It is great to see Gujarat’s growth receive such encouraging words very often. It surely will inspire the people to further work hard and touch heights of progress never-seen-before, by following the Mantra of ‘Sabka Saath, Sabka Vikas’ (Collective efforts, inclusive growth).

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