Maximum economic freedom in Tamil Nadu, least in Bihar: Study

Published: Monday, Mar 14, 2011, 21:33 IST 
Place: New Delhi | Agency: PTI

Tamil Nadu enjoys maximum economic freedom - greater wealth and improvement in human development - among the 20 largest states in the country, a study said today.

As per the Economic Freedom of the States of India 2011 report, which ranked the economic status of the states in 2009, Gujarat and Andhra Pradesh were the next most prosperous states.

This is significantly different from 2005, when Tamil Nadu was still on top but Madhya Pradesh came second and followed by Himachal Pradesh, Haryana and Gujarat, it said.

The study ranks economic freedom in the 20 biggest Indian states, using a methodology from Fraser Institute' Economic Freedom of World Annual Report.

The bottom three states in 2009 were Bihar, Uttrakhand and Assam, in that order, the study said.

Back in 2005, Bihar was still ranked at the bottom (20th) while Assam was at the 19th position and West Bengal at 18th.

The report said the state with fastest improvement in economic freedom was Andhra Pradesh, moving up from 7th position in 2005 to third position in 2009.

The index score for Andhra Pradesh went up from 0.4 to 0.51 on a scale from zero (no freedom) to 1 (high freedom), an improvement of 27.25%.

The second fastest improvement was in Gujarat, which moved up from the fifth to second position.

Economic freedom is associated with greater wealth, higher growth and improvement in whole range of human development indicators.

"Even as some states improved in economic freedom, others worsened, showing that there is no uniform all India trend," the study said.

As per the study, only two states - Andhra Pradesh and Gujarat -- registered large increases in economic freedom. Haryana, Tamil Nadu, West Bengal, Rajasthan and Jammu and Kashmir registered moderate increases in economic freedom.

States with largest decrease in economic freedom were Madhya Pradesh, Orissa, Uttarakhand, Punjab and Himachal Pradesh.

Punjab, once among the best performers, slipped from 6th position in "States with higher level of economic freedom tended to perform better across a range of economic variables. They also had a higher levels of in-migration, while states with least economic freedom had higher level of out-migration," the study said.

Bibek Debroy, Laveesh Bhandari and Swaminathan Aiyar are the authors of the report