Case for special package: More than package, we need fiscal discipline

  • Manpreet Singh Badal, Hindustan Times
  • Updated: Jun 12, 2015 08:40 IST

American economist Arthur Lewis's Nobel-winning work suggested that rise in farm wages, when an economy experiences shortage of farm labour, is usually a precursor to economy's prosperity. The concept which later became famous as "Lewisian Turning Point" attributes this prosperity to farm labourers gradually moving to more productive capital and industrial projects which leads to overall appreciation in their real wages.

While the most famous exemplification of this concept has been China's transformation, I have often wondered how Professor Lewis would have reacted to Punjab's strange case-where farm wages has consistently increased in view of paucity of farm labour, but there has been a concomitant decline in overall state's prosperity.

Actually, one need not be an economic stalwart to see the reason behind Punjab predicament. Yes, there is paucity of labour in agrarian sector, but our youngsters have not upgraded to more productive industrial sectors ---instead most of them have migrated to other nations, states or worse, they are disinclined, frustrated and in the vicious grip of drugs!

It was staggering that Hindustan Times readers' poll suggested that an overwhelming majority felt that the Centre was not being unfair in denying Punjab a fiscal relief package. Though statistical extrapolation is a hazardous business, I don't think results would be any different if such a poll were to be conducted across the citizenry of Punjab. People of the state must realise that no one but they themselves are responsible for the misfortune that has fallen on it.

Punjab not the only one torn by terrorism

It is without doubt that Punjab did suffer a lot, especially during terrorism days, but we have been using this argument for so long that it is now losing its efficacy. To be honest, 1980s and 90s were the time when significant portions of India were torn apart by insurgencies of various hues.

J&K, Punjab, Assam, Mizoram, Nagaland, Manipur, Madhya Pradesh, West Bengal, Bihar, Andhra Pradesh (the latter four under the severe grip of Maoism-something which the former Prime Minister Manmohan Singh described as the single biggest security threat) , were all disturbed for varying periods of time. While, I am no way suggesting that this by any way diminishes Punjab's distress or the value of its claim, we have to be large hearted to understand that we are not the only ones who faced a crisis.

More importantly, if the 80s were a lost decade for us, the subsequent two decades were even worse. This was the time, when rest of India was moving ahead rapidly, whereas we were creating a toxic cocktail of political expediency, mindless fiscal populism and callous disregard to state's industrial and educational infrastructures.

Remember, even when Andhra was in severe grip of Naxalism, Hyderabad did emerge as an information technology powerhouse. Similarly, the sort of double digit economic growth which Madhya Pradesh has seen is very impressive. On the contrary, we frittered away our inherent advantages.

In a recent conversation with a group of students in Dehradun, I was left searching for answers, when a youngster from Punjab asked me, that today when the entire country is searching for the holy grail for "Make in India", wouldn't Punjab have had a great advantage, if we had not allowed our industrial clusters in Ludhiana, Jalandhar, Amritsar, Mandi Gobindgarh to go kaput?

Compensation for 'doing so much for India' absurd

Also, I do not understand this whole business of claiming that "Punjab did so much for India". This sort of reasoning violates the self-respect of Punjabis. We are not distinct from the rest of India. We are proud Indians and if our nation calls upon us to deliver, we Punjabis will be at the front ranks to serve selflessly. It is affront to Punjabi zeitgeist to say that we did so much for our country and we must be compensated for that. And I believe that some of these arguments lack substance.

To take one particular example---it is very disingenuous to suggest that Punjab's water level has depleted abysmally because we kept on producing wheat and rice to feed the nation. Let us be honest with ourselves, we kept on producing wheat and rice, because our political establishment never had the vision and policies to facilitate crop diversification and food processing industry in our state.

Even for wheat and rice-ask any agriculture marketing professional and he will tell you, that Punjab produces the worst quality of wheat. When the agriculture marketing giants procure high quality wheat, they don't come to Punjab they procure it from Madhya Pradesh and Rajasthan. The finest agriculture produce in India, which is exported, is not produced in Punjab; it is grown in the Nashik and Baramati belts of Maharashtra.

Our politicians who don't mind taking junkets at some of the most frivolous learning pretexts should be sent to Godavari region of Maharashtra, which was agriculturally so unsuitable that any thought of cultivation there a few decades ago, would have been dismissed as a bad joke.

Over the years, careful planning by their political representatives, consistent espousal of their cause in the Parliament, a firm fillip to the local cooperative movements, canal irrigation, rainwater harvesting, modernisation of agriculture practices, have ensured that the region is one of the finest horticulture belts in the world---with its farmers being some of the most prosperous in India.

Centre not at fault for treating Punjab wealthy

The Centre treating Punjab as a "wealthy" state is not Centre's fault. Rather, it is because we have lived beyond our means and because our successive state governments have shown a callous disregard for state's uplift. Punjab has had its glory days, and if one studies history, one would realise that these were the days which coincides with exceptional political leaders such as Pratap Singh Kairon and superlatively brilliant bureaucrats such as MS Randhawa and Prem Nath Thapar.

One gets nostalgic and depressed by gazing at Punjab's illustrious path. And one does hope that Centre does excuse the poor policies of successive Punjab governments in the last 25 years, and gives a fiscal relief that helps state emerge from the debt morass it currently finds itself in. But for that to happen, the state government needs to show some resolve-a resolve that manifests in economic discipline and fiscal improvement.

Unfortunately, this resolve has been missing for a long time. I hope we find it someday. And the day we do, we won't need any fiscal assistance.

(The writer is a former finance minister and president of People's Party of Punjab)

Tomorrow: Partap Singh Bajwa, Punjab Congress president

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