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Saving Punjab economy from 'economists'

Debates on Punjab economy seem trapped in a web of terms drawn from the late 19th century economics, arguing on relative virtues of one of the two staple ideological diets -- dyspeptic Marxian vocabulary and toxic capitalist jargon.

punjab Updated: Sep 27, 2013 09:36 IST
Harcharan Bains

Debates on Punjab economy seem trapped in a web of terms drawn from the late 19th century economics, arguing on relative virtues of one of the two staple ideological diets -- dyspeptic Marxian vocabulary and toxic capitalist jargon. Funny, as all major economies of the world, including China and the US, have moved beyond such distinctions. Between a state with rich government and poor people, and one with rich people but poor government is a choice that we have not even begun to discuss.


There is a serious disconnect between what one sees in Punjab and what one hears about it. The average Punjabi is unable to reconcile the doomsday forebodings on his state with what he sees happening around -- the rolling out of sprawling infrastructure, thermal plants, highest-paid employees in India, the state finishing atop the national pyramid in consumer and human development index, education, health, infrastructure, and investment climate, better fiscal deficit and debt-GSDP ratio than the Centre's.

Undoubtedly, there are problems, but there is movement forward.

Two models

Unwittingly, the debate has turned into one between the Sukhbir model of development - steering development away from dependence on state coffers -- and the "fiscal deficit and surplus" model, represented by Manpreet Singh Badal. But one side has at least been consistent, and the other? Looking into old newspapers, I find someone in Punjab - in 'a stuck HMV gramophone chorus' (Manmohan-Montek) -- always blasting Sukhbir for doing in Punjab (atta daal) what all three hail the Centre for doing on a larger national scale (Food Security Act). The big excuse: difference in fiscal indicators of Punjab and the Centre. "We are mismanaged and slipping on expenditure on key sectors, like human development."

Punjab pluses

Punjab's development expenditure is a healthy 49.6%, better than the Centre's 43%. In Human Development Index, Punjab ranks a creditable fifth, six places above Gujarat, Haryana, Tamil Nadu and Andhra Pradesh. Investments in human development sectors rose phenomenally in just five years: in education, by 400% and in health by 184%. As most attractive investment destinations, the Reserve Bank of India report ranked Punjab among the top three, even above Gujarat. But Manpreet would have none of it and sniffs even at the RBI.

Punjab's fiscal debt at 3.17% (against prescribed target of 4.1%) is way healthier than Centre's 4.82%. The UPA achieved even this only after slashing a hefty Rs 92,000 crore from asset creation in education and health.

Manpreet unwittingly concedes that Sukhbir's model has pulled Punjab back from an abyss: fiscal "debt" -- a shocking 7% in 1997 -- is down by a neat 100% -- at 3.17%.

The one perennial theme on the "stuck gramophone record" is debt. Debt has meaning only as percentage of GSDP. Punjab's progress on this ratio since Manpreet's departure is phenomenal: 31.39%, down from a peak of 48%. And well within the Planning Commission limit of 41%.

This ratio for the UPA government in Delhi is 68%! Punjab has never faltered on its debt payments.

Sheer coincidence

Ironically, maybe through sheer coincidence, most of the good news for Punjab coincides with Manpreet's departure as finance minister.

But Manpreet is prepared to quarrel not only with economic arithmetic but also with history and geography. He declares that Punjab's disadvantages -- landlocked with hostile border, industrial concessions to neighbouring states, militancy etc -- are just "surfeit of excuses" by its "top spokesperson" (read Sukhbir -- the sharp tug of jealous pain that caused the 2009 split still lingers.)

"We can keep whining till cows come home, but no one but ourselves is to be blamed for the mess we are in," says MSB (Manpreet). But this whining started when cows had not even left home.

Rewind to 2009, the Punjab Assembly budget speech by a suave finance minister: "Punjab has suffered multiple blows. Being a border and landlocked state, it has certain inherent limitations which our sister states are not faced with. Concessions by the Centre to our neighbouring states have almost precluded new industrial investments as well as led to flight of industry." And earlier, before the 13th Finance Commission: "It is very unfair that taxes are collected by states and taken away by the Centre. The entire burden of development and providing electricity, health, education, law and order is on the states." Whining?

Of the 20 states mentioned by Manpreet for being as 'disadvantaged' as Punjab, few share the twin drag of being landlocked and border states at the same time, and none has a history that features the traumas of both Partition and militancy. Gujarat is a border state but has a coastline; Haryana has no coastline but has no hostile international border either. Except J&K, none has seen cross-border terror close to the intensity of Punjab's nightmare.

But no one can argue with Manpreet who resorts to Ghalib to ridicule Sukhbir's "dreams" of a prosperous Punjab - "Dil ke behlane ko khayal achha hai." One last time, rewind to Manpreet: Version 2008: "Sukhbir is genuine and practical while I am emotional and philosophical."

People who are genuine and practical do not sell unrealistic dreams. A bit like Manpreet myself -- emotional and philosophical -- I would leave affairs affecting destiny of millions to hands that are "genuine and practical" rather than risk this destiny in my "emotional" hands.