Facts often do not speak for themselves. It depends upon which facts are selected to hinge arguments and propositions. Similarly, the use of the measure is also inseparable from our vision. To consider the measure beyond questions is not only lethargic but also dangerous. If we stop asking questions, what we are measuring and for what outcomes, it becomes blind faith. In the words of Prof Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi, “What we measure affects what we do… In the quest to increase the Gross Domestic Product (GDP), we may end up with a society in which the citizens are worse off… GDP mainly measure market production, though it is often treated as if it were a measure of economic well-being. Conflating the two can lead to misleading indicators about how well-off the people are and entail wrong policy decisions.”
For instance, in Punjab, the Green Revolution was marketed as a powerful engine of growth which contributed to high GDP. However, two decades later, it came as a discovery that it has led to depleting water table, environment damage and soil degradation, besides the decline in farmers’ income. The consequence of single-digit measurement obsession like the GDP led to endangering the future of farming, farmers and at least one generation of Punjabis.
GDP ‘wrongly used’
The monumental work of these Nobel Laureates further cautions, “If we remain locked into an index of economic progress that includes only what is created and not what is destroyed”, it leads to environmental disaster. It is not to discount the use of GDP as it tells about market production, but to present it as a measure of economic well-being is misleading. “GDP is not wrong as such, but wrongly used.”
Similarly, fiscal deficit is seen as a cause of declining growth. It would be worthwhile to ascertain a correlation between fiscal deficit and the rate of growth of the economy. There were times when the growth rate was lower and the state enjoyed a fiscal surplus. The fetish to remove fiscal deficits has produced a number of distortions. In 2004-05, the government came out with a scheme to contract untrained teachers from the same village to reduce government expenditure. As a consequence, the quality of teaching further deteriorated. While the education system was required to impart quality education, the policy planners aimed at a fiscal fix. A relevant question in view of the increasing debt servicing cost for the states is: why is the cost of public expenditure so high? The fiscal management is governance without responsibility and fiscal mismanagement is governance with accountability. Both are bad.
As is well-known, a fragmented diagnosis produces tunnel vision – strategic or otherwise. It is well-accepted that well-being is multidimensional, including living standards (income, consumption, wealth), health, education, work, quality of governance, social capital, environment, social, political and economic security. On the citizens’ well-being indicators, contrary to popular perception in the state, Punjab’s relative position compared to other states is quite good. For instance, both on poverty eradication and reduction in disparities, Punjab’s performance is better than many others. A study published in the Economic and Political Weekly, led by Prof Sudipto Mundle, a former member of the 13th Finance Commission, ranked Punjab on top of the governance index. The study includes four dimensions — delivery of infrastructure services and social services, fiscal performance and law and order. Another study conducted by Khursheed Siddiqui of the National Council of Applied Economic Research (NCEAR) has shown that between 2001 and 2011, Punjab improved its position in education, physical infrastructure, fiscal performance, while the same declined in health and economic domains or parameters.
No autonomous unit
These comparisons help us realise that Punjab is not an autonomous unit. Its vision has to be located in the shift in development thinking which brought back into focus the significance of non-economic factors influencing the economic outcomes. Also, to take into consideration the movement away from command economy to market economy and from local to global. And, it is vital to understand that it is the market which shall govern, not the governments. So far, the story of implementation is riddled with targets met and goals lost.
Punjab has to reinvent itself to ensure rights of the poor and underprivileged while promoting metropolitan regimes, facilitate foreign direct investment, withdraw subsidies, and encourage privatisation in social development. The land question is now transformed into land acquisition with pricing, compensation, resentment and rehabilitation instead of redistribution and viability of cultivable land. However, no institutional mechanism has been put in place to harmonise private capital driven by profit and public funds to be spent for ensuring social equity. It is here that innovation and research have to intervene.
Punjab needs a paradigm shift. The question we should answer: growth for whom and by whom? Let us understand Punjab through two historical accidents. It is a coincidence that the international border not only acted and was seen as a constraint, but even reorganisation of Punjab with Chandigarh being a union territory, has put Punjab into a major disadvantageous position.
It is an established fact that the capital cities stimulate technology, establish network of communities and tap resources. Without a capital city of its own, Punjab lost a space which could have acted as a driver of growth. It has suffered a major setback for having no control over its capital.
The state could not build its own capital because of the ongoing dispute. It missed the IT (information technology) revolution because it did not have the advantage of its own growth pole. In other words, in the absence of its own central business capital, it has suffered a major setback in neo-liberal globalised economy. And, it has lost its legitimate share in the revenue generated in Chandigarh.
Agri policy in global context
It is unfortunate that due to lack of a clear agricultural policy, Punjab has suffered the advocates of diversification of crops since 1986. As of now, Punjab cannot diversify to cash crops and specialise in foodgrains.
There is an urgent need to enhance agricultural productivity. Land released after increase in the productivity of the grains can be utilised for crop diversification and non-farm activities. And to formulate a blueprint to make retailers, farmers and small manufacturers globally competitive. This will also arrest mindless urbanisation.
Punjab has a historical advantage, thanks to its small-scale industries in places such as, Jalandhar, Ludhiana, Amritsar, Mandi Gobindgarh and Batala.
It is unfortunate that public policy has not paid much attention to these traditional industries in terms of technology transfer, skill upgradation, marketing and maintenance of environmental standards. If Lijjat Papad can have a turnover of around Rs 300 crore, why has the Amritsari papad (a known brand name) not been able to capture the market?
A comprehensive and well-researched policy has to be formulated rather than be guided by fads and fashions of the day.
Quality education and health
Similarly, in education and health sectors, the guiding principle should be to improve quality education and health outcomes rather than let privatisation flourish without any accountability to either professional ethics or to the community. There is a need to formulate skill development policy linkages with quality of education at primary and secondary levels in rural government schools to be in convergence with national and global standards.
The impact of socio-economic development is not inclusive. Most relevant questions arise, such as why the Dalit population, in less casteist Punjabi society, is more deprived in terms of access to land, education, health as compared to non-Dalits. Secondly, why children from poor families in Punjab are more deprived in terms of access to
There is an imperative need to evolve political consensus on the direction of development and also to restore federal character to ensure autonomy of the states to allow prioritisation of development initiatives is sync with people’s needs. To find the right solutions, right diagnosis has to be done.
(The writer is director, Institute for Development and Communication (IDC), Chandigarh. The views expressed are personal.)
Tomorrow: Sukhbir Singh Badal, deputy chief minister, Punjab.