The Economist Intelligence Unit's 2010 democracy index ranks India 40th out of 167 countries, putting it among the 52 countries considered to be "flawed democracies". This designation includes neighbouring countries such as Sri Lanka, Thailand, the Philippines, Indonesia and Malaysia, as well as another emerging-market giant, Brazil. However, India is highly placed within this category, ranking above all of these countries. Its relatively strong position owes much to its high scores in the electoral process and pluralism and civil liberties categories; its status as the world's largest democracy, and the country's vibrant free press and pluralistic society, have long been justly celebrated. In these areas India outscores even some long-established democracies that we designate "full democracies", including the US and the UK.

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Political culture has become even weaker

However, India fares much worse in the political participation and political culture categories. The phenomenon of the "argumentative Indian" may facilitate public debate, but this does not necessarily translate into a high level of political participation. Voter turnout in the most recent general election, in April-May 2009, stood at 57%, but this figure masks wide variations between different parts of the country, ranging from a turnout figure of 90% in the small north-eastern state of Nagaland to just 46% in Uttar Pradesh, India's largest and most politically influential state. However, it is the significant decline in the score for political culture, to 4.38, from 6.25 in our 2008 index, that bears greatest responsibility for India's lower overall score of 7.28 out of 10 in the 2010 index (compared with 7.8 in the 2008 index). This in turn helps to account for the fact that India's global ranking in the index is now five places lower than it was in the 2008 index. The political culture category incorporates less tangible indicators of the foundations for democracy, including the population's perceptions of, and desire for, rule by the military or by technocrats rather than by an elected government. India's relatively poor score in this category probably reflects the impatience of at least some segments of society with the country's cumbersome, slow-moving system of government and their desire for a potentially more efficient form of leadership. This is particularly noteworthy given that comparisons continue to be made between the economic growth rates and prospects of India and China: debate still flourishes about whether the ability of China (which is categorised as an "authoritarian regime" in our index) so far to achieve faster rates of economic growth than India owes at least something to the fact that it is non-democratic and therefore perhaps more efficient. India's score for government functioning is fairly high but is constrained by lingering issues relating to corruption and government accountability. Moreover, the country's continuing reliance on governments consisting of unwieldy and sometimes unco-operative coalitions often hinders rather than advances economic reforms, and this works against India's overall score.

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Democracy index 2010: Democracy in retreat, a free white paper containing the full index and detailed methodology, can be downloaded from www.eiu.com/DemocracyIndex2010.

Note on methodology

There is no consensus on how to measure democracy, and definitions of democracy are contested. Having free and fair competitive elections, and satisfying related aspects of political freedom, is the sine qua non of all definitions. However, our index is based on the view that measures of democracy which reflect the state of political freedom and civil liberties are not "thick" enough: they do not encompass sufficiently some crucial features that determine the quality and substance of democracy. Thus, our index also includes measures of political participation, political culture and functioning of government, which are, at best, marginalised by other measures.

Our index of democracy covers 167 countries and territories. The index, on a 0-10 scale, is based on the ratings for 60 indicators grouped in five categories: electoral process and pluralism; civil liberties; functioning of government; political participation; and political culture. The five categories are interrelated and form a coherent conceptual whole. Each category has a rating on a 0-10 scale, and the overall index of democracy is the simple average of the five category indices.

The category indices are based on the sum of the indicator scores in the category, converted to a 0-10 scale. Adjustments to the category scores are made if countries fall short in the following critical areas for democracy:

• whether national elections are free and fair;
• the security of voters;
• the influence of foreign powers on government; and
• the capability of the civil service to implement policies.

The index values are used to place countries within one of four types of regime:

• full democracies-scores of 8 to 10;
• flawed democracies-score of 6 to 7.9;
• hybrid regimes-scores of 4 to 5.9;
• authoritarian regimes-scores below 4.