Punjab: The Way Ahead

Not electoral populism but fiscal health of State

The long and excruciating wait would finally get over on Tuesday. Which party will shape the political destiny of Punjab for the next five years would become clear after an election which failed to generate any wave for or against any party even though the polling percentage was the highest ever in the history of the state.

Ask any Congress leader and they will tell you that though the battle is close, they will pip their SAD-BJP rivals and romp home. You will get a similar response from any SAD-BJP leader you talk to. And mind you, this is not public posturing. Even in off the record conversation, both the two formations – Congress on one side and SAD-BJP on the other- admit that the battle of ballot is close and could go either way this time round and the margin would be very small, something like Kerala where four MLAs made the difference between the winning UDF and the losing LDF in the 2011 elections.

My hunch is that in Punjab, the results would be as close as it was in Kerala and until the last vote is counted, it will swing from one side to the other throughout the counting process. The only unpredictable element in the episode is Punjab People’s Party and half a dozen independents. It remains to be seen if they would come in the picture post March 6, in case of an indecisive result. The exit polls of various agencies and media organisations too point to a close contest.

People have made their choice and at this point of time, let us not deliberate where they have voted but what the people of the state want.

The new government in Punjab, whether it is the Akali Dal-BJP combine or the Congress stares at myriad problems which it will have to engage with the first thing after assuming office.

Punjab perhaps holds the dubious distinction of being the most indebted state in the country and the new government will have to decide whether electoral populism is more important than fiscal health and long-term policies for making it the economic power horse of the nation. As next Assembly election would be five years away and even parliamentary polls over two years away, it was time Punjab boosted its economy with the right mix of healthy economic policies with an eye on selective subsidy for the marginalised sections of society.

The state used to have highest per capita income along with being the harbinger of green revolution but gradually the advantage was lost, initially due to militancy throughout the 1980s and early 90s and then due to populism and frittering away the resources to subsidy and excessive expenditure. So much so that the economy is now debt-stressed and it has a debt of Rs 70,000-72,000 crore. It was now among the three states which had been declared debt-stressed states. Despite this, the state government continues to be on an expenditure spree. Punjab’s tax-GSDP ratio is 7.5 per cent against most of states having tax to GSDP ratio of 9.5 per cent. The 13th Finance Commission suggested that Punjab should either contract its expenditure or raise the tax-GSDP ratio.

Manpreet Badal, the estranged nephew of Chief Minister Parkash Singh Badal pointed out in his manifesto that the monthly security bill and medical expenses of the politicians and their families runs down to close to Rs 100 crores. This is a startling figure. No one knows for sure whether the state is in a financial position to support such extravagant and ugly expenditure any more.

More than half the state’s income goes in paying back debts and its interest, thereby leaving no money for development. It will have to take harsh economic measures and this includes stopping subsidised electricity to rich farmers. Free power should be restricted only to marginal and poor farmers.

Then another important issue awaits the state where agriculture is the mainstay of the economy. Middlemen corner 2.5 per cent of the farmer’s earnings by helping them get their paddy and wheat procured by the government agencies. While the Centre wants to do away with the middlemen and instead has asked the state to draw a strategy where the government directly procures the foodgrains, Punjab says it does not have the requisite infrastructure to do so. The new government should take a call on a priority basis so that farmers are not deprived of their income and the middlemen are done away with.

Agricultural economists and researchers have been warning for years now that the agricultural growth in the state has almost saturated with little or no scope for further increase in yield. Water intensive crops of paddy and wheat have led to an environmental degradation but no one is thinking of the long term measures to be adopted. Farmers now need to be sensitised that the time had come to move away from the wheat-paddy cycle to other cash crops. States like Madhya Pradesh have shown potential in wheat cultivation and new areas should be carved for the national food basket instead of relying on Punjab for the purpose.

Already farmers have faced wheat and paddy glut. This year, it was a potato glut and now the state faces a glut of citrus fruits (kinoo). Successive governments failed to provide cold storage system, any trustworthy transport system, guaranteed markets or processing centres. Congress has promised a lot for the farmers in its manifesto but the past experience does not inspire much confidence.

The state faces poisoned and arid soil due to over use of pesticides and over exploitation of ground water. Environmentalists warn of a disaster ten years down the line if the current practices do not come to an end. Investment in improving irrigation infrastructure, corporate involvement to facilitate better marketing and food processing, endowments for research and facilitating land consolidation will remain an agenda for the new government in such circumstances.

Then there is problem of unemployment. It is estimated that around 30 lakh young Punjabis who want to work are looking for a job. No wonder, the youth keep trying dubious methods and bank on unscrupulous travel agents to go abroad and face discrimination wherever they go due to the menial jobs they do there. Had there been viable economic opportunities in the state, this could have come to an end. The state lost a decade and half to militancy and in the process its momentum was lost. It was time, the new government gave a fresh thought and impetus to FDI in the state.

Health could be another priority area for the government. More so when dreaded cancer has spread its tentacles in the Malwa and Majha region. The groundwater is so contaminated with traces of uranium and overuse of fertilisers that in some villages in the Malwa belt, almost every family has at least one cancer patient. While the state government so far has confined itself to giving doles to such family, the new government will have to explore possibilities of setting up specialised cancer hospitals either in the PPP mode or government owned in every district headquarters. The Akali-BJP government did make some efforts in the direction towards the close of their five-year term but a lot remains to be done in this direction.

People of the state, who voted in such large numbers, would expect a new beginning and they deserve it. (March 4, 2012)

http://dailypioneer.com/state-editions/chandigarh/47350-punjab-the-way-ahead.html