The Modi government has gone into a self-congratulatory overdrive over the World Bank’s latest Ease of Doing Business index (EODB) rankings. Higher EODB rankings are signified by a low numerical value and are meant to indicate better, usually simpler, regulations for businesses and stronger protection of property rights.

The EODB index is meant to measure regulations directly affecting businesses and does not directly measure more general conditions such as a nation's proximity to large markets, quality of infrastructure, inflation, or crime.

A nation's ranking on the index is based on the average of 10 sub-indices: These relate to time taken for starting a business; getting building sanctions, but not buying the land; getting a power connection; registering purchase of property; getting credit sanctioned; protection of investors; taxation; foreign trade; enforcement of contracts; filing for insolvency or forcing bankruptcy. All these steps should be about automatic, but they are not.

Extortion the norm

Each represents a rent collection point, which usually require bribes to move further. Our problem is not that we don’t have well worn procedural tracks. The problem is the vulnerability to extortion even for the routine and normal. Usually if one is willing to pay the rent collectors, the ease of doing business index score will be very good. Only going by shortness of procedures and whether the forms can be filled online will give us an erroneous feeling of comfort.

In real India it takes 123 days to get a building plan sanctioned, and 1445 days in the court to get a judicial verdict on a civil dispute.

Incidentally India has shown improvement in only four sub indices, with the other six being as before or have fallen behind. This suggests that declared reforms on insolvency, getting a company registration or SEBI regulations to protect shareholders have boosted our ranking without much change in the real world.

No Indian business can start or function without enabling agents or consultants. A large part of wealth of South Delhi is due to this activity. It’s the same in state capitals and district headquarters. Business consultancy masks many activities. The biggest among them is the business of liaising, and this is increasingly a part of the services corporate lawyers and chartered accountants offer.

Very little has changed here. To judge by the EODB index is like judging a policeman for the cleanliness and crispness of his uniform rather than his proclivity to corruption and professional skills. As a nation we are good at dressing up for the occasion.

More relevant indexes

There are indexes that are more relevant and more useful in setting national priorities. Recently the International Food Policy Research Institute (IFPRI) released the Global Hunger Index (GHI). The IFPRI report said: “India is ranked 100th out of 119 countries, and has the third-highest score in all of Asia — only Afghanistan and Pakistan are ranked worse.”

The report further went on to say: “At 31.4, India’s 2017 GHI (Global Hunger Index) score is at the high end of the ‘serious’ category, and is one of the main factors pushing South Asia to the category of worst performing region on the GHI this year, followed closely by Africa south of the Sahara.”

India keeps a pretty low place in most development indexes. In the world’s Human Development Index (HDI) India ranks at 131 out of 168 countries ranked, and is in the company of all other South Asian countries except Sri Lanka (73). Sri Lanka is better placed than even China, which is ranked 90.

Only Kerala can be compared to Sri Lanka. The HDI of Kerala is India’s highest with 0.790, which would place it ahead of China, while the other end of the spectrum is Chhattisgarh with 0.358, which would place it just alongside Chad, one of the world’s poorest and most backward countries. At 0.790 Kerala would find a high place in the HDI list of nations.

Others indices are just as damning. India's abysmal track record at ensuring basic levels of nutrition is the greatest contributor to its poverty as measured by the new international Multi-dimensional Poverty Index (MPI). About 645 million people or 55% of India's population is poor as measured by this composite indicator made up of ten markers of education, health and standard of living achievement levels.

The new data also shows that even in states generally perceived as prosperous such as Haryana, Gujarat and Karnataka, more than 40% of the population is poor by the new composite measure, while Kerala is the only state in which the poor constitute less than 20%.

The MPI measures both the incidence of poverty and its intensity. A person is defined as poor if he or she is deprived on at least 3 of the 10 indicators. By this definition, 55% of India was poor, close to double India's much-criticized official poverty figure. Almost 20% of Indians are deprived on 6 of the 10 indicators.