This is the Cato Daily Podcast for Thursday, April 24th, 2014.

I'm Caleb Brown.

India has made great strides in human well-being, but which states provide the highest level of economic freedom.

Swami IAR is a research fellow at the Cato Institute's Center for Global Liberty and Prosperity

and co-author of the new report, Economic Freedom of the States of India.

We spoke last week.

The Cato Institute and Friedrich-Nerman Institute, every year we produce this annual report called the Economic Freedom of the States of India.

How do we measure economic freedom?

It's a methodology adapted from the Fraser Institute's annual report which is called Economic Freedom of

the World. That report measures relative freedom between countries. We attempt to adapt that model between different states of India.

Based on that model, the state of Gujarat has been number one for the last three years and has been widening its lead at the top.

It is well clear of the second state, Tamil Nadu and others.

The reason this is relevant is we have a situation where the chief minister of Gujarat, the man who has won

three elections in a row, he appears to be the leading candidate to be the next prime minister

of India.

So then the question is the kind of economic freedom

he has brought in Gujarat, can he bring that in Delhi? Will that make a difference to

India? Why has Gujarat been more amenable to economic improvements in economic freedom than other states?

Well every state has a certain amount of freedom in what it wants to do. Certainly Mr. Modi belongs

to a Hindu nationalist party and he is not a classic liberal. For instance a

classic liberal might want to privatize all the public sector undertakings.

No, he says, I'll make them efficient and work very well.

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