Punjab’s case for special package

  • Ramesh Vinayak, Hindustan Times
  • Updated: Jun 10, 2015 01:08 IST

That Punjab’s entreaties for a special financial package have surprisingly found no receptive ear in New Delhi even a year after the BJP came to power is an open secret that the Parkash Singh Badal government has been fighting shy of accepting publicly.

Until, however, Union minister of state for finance Jayant Sinha rubbed it in bluntly. “Punjab doesn’t require a special package as it has already been categorised as a prosperous state,” he said in Chandigarh recently.

The plainspeak has particularly embarrassed the ruling Shiromani Akali Dal which, having perfected the art of blaming the previous Congress-led UPA regime for all economic ills of Punjab, was expecting a kinder treatment from the Narendra Modi government. The latest snub was direct enough to provoke a sharp riposte from an otherwise unflappable Badal: “We are seeking this (package) not as a concession but as a right.”

Clearly, Punjab hasn’t given up yet on its demand that’s broadly premised on two arguments. One, that its anaemic finances continue to be weighed down by the debt burden of fighting the war against terrorism in the 1980s and 1990s. Secondly, the grain-bowl state needs to be compensated generously for having precariously depleted its water and soil resources while meeting the national food security.

However, these arguments have failed to find favour with the Modi regime. Rather, it has even de-bracketed Punjab from the three states which the UPA government had designated as financially-distressed – the other two being Kerala and West Bengal. That’s another setback for the debt-addicted Punjab.

The Centre’s reluctance on a special package has much to do with a deep-seated impression – not entirely wrong, though – about Punjab being fiscally imprudent. A vote-centric populist culture based on fund-guzzling freebies, coupled with a serious governance deficit for the past two decades, have not only hobbled the much-needed structural transformation of economy but also undermined Punjab’s case for special concessions.

Tackling the governance deficit and steering the state to the higher orbit of growth will require innovative thinking as well as money, two resources in scarce supply in Punjab. At the same time, the Centre shouldn’t be seen punishing Punjab for its prosperity.

Punjab will have to reframe its case and also firm up a blueprint on how it would utilise the central assistance. To bring out fresh perspectives on why Punjab needs a special financial package, HT has invited key stakeholders to share their views and vision. For, clarity must begin at home.

Ramesh Vinayak, Senior Resident Editor, Hindustantimes

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