| Punjab needs to rechart the course of its development and rearrange its policies and politics. It represents peculiar development paradoxes. Though Punjabis are the most globalised of all communities, Punjab is the least globalised. This is reflected in a foreign direct investment (FDI) of 0.7 per cent (World Bank Report 2004). It has a highly developed agricultural sector, but without much direct linkages with industrial development. Thus, agriculture contributes 47 per cent of the state's GDP as compared to 30 per cent in the rest of the country and its industry employs less than five persons per 1,000 as compared to seven in the country. |
Punjab has a high per capita income, but a dismal social development index. It has the country's most adverse child sex ratio (793), high rate of female foeticide, farmers' suicides, substance abuse and a large percentage of educated unemployed youth. The state has a highly developed infrastructure, but the quality of public services is poor and costly. Punjab is highly prosperous but one of the most indebted states in the country-the per capita state debt being Rs 13,029. All other states, including Bihar, have a lower per capita debt (World Bank Report 2004).
There has also been a slowdown in the economy which has led to its third lowest growth rate among all major states. Agriculture, which has been the mainstay of its economy, is experiencing a massive slowdown. It has had an industrial growth rate between 5 and 7.5 per cent during the past 15 years, far lower than the national average.
This crisis has been the result of the nature of development and excessive reliance on reductionist and short-sighted policy interventions. The policy planners, in view of the stagnant agriculture, rising debt burden of the farmers and environment degradation, offered solutions in diversification of crops from the wheat-paddy rotation, fiscal management and corporatisation of agriculture. Diversification of crops was propagated not in response to the negative effects of the Green Revolution like environmental degradation, increasing social and economic inequalities, failure to build forward and backward economic linkages, but because it had a positive outcome i.e. it led to production of foodgrain. There was politics in this anti-grain policy.
Another policy initiative has been towards the corporatisation of agriculture and shifting small and marginal farmers from 'unviable economic activity'. Through this policy, agriculture may thrive but small agriculturists will not. The so-called new paradigm, 'leveraging public funds and assets to attract private capital', is being implemented without building adequate safeguards to protect the interests of farmers. No doubt, the government should create enabling conditions for agribusiness, but the farmers have to be empowered too. Another much propagated policy in the realm of fiscal management is being implemented without owning responsibility for the poor. The emphasis is on negatives i.e. disinvestment, reduction in expenditure, privatisation of services and an anti-corruption drive. However, in its fourth year the government has resorted to politics of populism by announcing free electricity to farmers. It is high time that the government sheds its obsession with fiscal management and the temptation to be populist.
Punjab needs a paradigm shift. The economy needs to be diversified and to create productive avenues in other sectors for the population dependent on agriculture. In agriculture, the focus has to be on increasing the productivity and moving away from anti-grain policies to the production of a crop basket. In education and health sectors, the guiding principle should be to incur high costs in the short run to get high returns in the long run rather than privatisation of essential services. In governance, the need is to shift from disinvestment to productive investment, from retrenchment to employment generation, from expenditure reduction to rationalisation of expenditure and from anti-corruption drives to corruption-free governance.
The author is the Director of the Insitute for Development and Communication, Chandigarh.