By Arun Kumar

Washington, Jan 21 (IANS) With an economic freedom score of 53.8, India has been rated the 124th freest economy in the world, according to the 16th annual Index of Economic Freedom, released by The Heritage Foundation and The Wall Street Journal.

India's score is 0.6 point lower than last year as a result of declines in freedom from corruption, business freedom, and monetary freedom. India is ranked 24th out of 41 countries in the Asia-Pacific region, and its overall score is below the world average of 59.4 on a scale of 100.

The level of economic freedom in the world dipped slightly in 2009, according to the index released Wednesday as Hong Kong and Singapore finished 1st and 2nd in the rankings for the 16th straight year.With Australia in 3rd place and New Zealand moving up to number 4, the Asia-Pacific region boasts a clean sweep at the top

This is only the second time in the history of the Index that average scores for countries measured in successive years have declined.

According to the index one reason for the dip in world economic freedom was: To help ward off recession, many governments launched unsuccessful attempts to spend their way to prosperity.

India continues to move forward with market-oriented economic reforms and has achieved average growth of about 9 percent over the past five years, the report said.

"Despite sluggish progress in reducing onerous non-tariff barriers, the trade regime has gradually become more open, with its average tariff rate decreasing," it said but "The state still plays a major role in over 200 public-sector enterprises."

"Public debt is 80 percent of GDP, leaving little fiscal room to react to the global downturn. India's overly restrictive regulatory environment does not facilitate entrepreneurship or realization of the economy's full potential," the report said.

"Corruption is pervasive, and the judicial system remains inefficient and clogged by a large backlog of cases. Labour freedom is especially weak, with rigid regulations a costly impediment to further economic growth and job creation."

Europe registered three top 10 placements: Ireland, Denmark and Switzerland. As a cautionary tale about the dangers of government intervention, the United Kingdom dropped out of the top 10 for the first time in Index history.

The United States also dropped significantly, to 8th place. Both countries increased government spending, and each lost more than 2.0 points on its Index score.