Thursday, August 4

Economic Challenges Before Punjab

Dr. Sucha Singh Gill

While discussing issues of growth with social justice in Punjab, it is in order to raise certain issues having bearing on Punjab economy. Punjab is located in the North West of India bordering Pakistan. The changes in the policy in recent years have put Punjab to the position of disadvantage being far way from the sea and sources of raw materials. The reversal of fright equalization by railways has hit very hard the economic activities which involves processing/handling of bulky products. Consequently the industrial towns like Batala (earlier ht hard by terrorism) and Mandi Gobindgarh, the centres of steel products have suffered heavily. The thermal power plants are also facing the same fate. The state is producing the lot of surplus grains, if they are to be exported abroad they suffer on account of high transport and handling charges and the exports become less profitable if not non competitive. Even today India's trade with Pakistan is largely via Mumbai and Karachi. Consequently, the state has not benefited in any way from globalization of the economy. Neither there is expansion of trade nor any inflow of FDI in spite of high level of economic and human development as well as better infrastructure compared to other states. To put an end to the discrimination/disadvantage to this state the opening up of Wagha and Hussainiwala land trade routes are of vital importance to the people of this region. Without this, the state would continue to be marginalized and deprived of the positive gains, whatever they are, of the globalization process.
The present cropping pattern in the state is not independently chosen by farming community. It has been promoted by the Union Government to meet food shortages in the past. The state has become grainary of the country. This cropping pattern has destroyed the ecosystem of the state. The subsoil water level has alarmingly gone down making several shallow tubewells ineffective requiring estimated investment of Rs. 3000 crore by farmers. Besides, excessive use of chemical fertilizers, insecticides, weedicides, pesticides etc. and very high cropping intensity with mono cropping pattern for decades have deteriorated quality of soil with serious imbalance in micronutrients leading to declining soil fertility. At the same time sub soil water has been polluted by excessive dose of chemicals and poisons used to kill pests and insects harming agricultural crops. These have not only raised fast increase in cost of production vis-à-vis slow rise in prices but have led to declining profits/returns and income to farming community. The present cropping pattern (wheat-paddy) is becoming uneconomical and unsustainable with serious ecological consequences. The efforts of the Punjab Government for the last three years (since 2002-03) to change the cropping pattern away from wheat-paddy under crop diversification has not produced desirable results for obvious reasons such as lack of viable alternative crops, absence of MSP and procurement system for new crops. The involvement of private corporate sector in this programme has not made any substantial impact. Exclusion of Punjab Government's crop diversification in the Tenth Five Year Plan and lack of central support has put farmers and farming in the state in very difficult situation. It is a case of leaving the region in lurch which helped country to come out of chronic food shortage. This is generating a feeling of alienation and discrimination. This requires immediate intervention by the union government and the Planning Commission.
The economy of the state is growing at a rate much below national average (3.84 per cent during 1997-98 to 2001-02 compared to national average of 5.20 per cent during this period). The growth rate slipped to 1.65 per cent during 2001-02 and 1.38 per cent during 2002-03 and recovered to 5.20 per cent during 2003-04 compared to national average growth rate of 5.77 per cent during 2001-02, 4.00 during 2002-03 and 8.10 per cent during 2003-04. If the current growth trend persists for another decade at least four major Indian states viz: Maharashtra, Gujarat, Karnataka and Tamil Nadu would have higher per capita income than that of Punjab (World Bank, 2004).
A survey of Punjab Government brought out that in 1998 that there were 14.72 lakh unemployed youth (between the age group of 18-35 years) in Punjab. 70.69 per cent of them belonged to the rural areas. Now, Punjab Chief Minister has been starting this number to be more than 20 lakh. This work workout to be 21.19 per cent of the total workforce (91.91 per lakh in 2001) in the state. This is obviously very high. With declining labour absorption capacity of the agriculture and very slow employment generation in secondary and tertiary sectors especially suited to Punjabi youth, there has come into existence the "reserve army of unemployed" in the state. The secondary and tertiary sector being based on small and medium enterprises and mostly unregistered the quality of the employment generation is very poor which suits only migrant labour (which is anything between 15 to 21.00 lakh). The Punjab youth is trying to leave the country. During 2004-05 Chandigarh office of Canadian High Commission issued family visa to 25,000 families. A large number of them are trying to migrate through illegal channels causing tragedy like that of Malta boat and many of them are landing in jails in other countries. The policy of no recruitment by the government for the last five years and absence of major large private sector employers, the educated and talented youth is leaving the state. Those who are left behind are highly frustrated and alienated lot. Majority of them are falling pray to drug abuse which is rampant in the state. Such a situation can prove to be socially explosive anytime and can be exploited by various forces. The state has already passed through such turmoil in the decade of 1980s.
The rural urban divide is turning into that of have and have nots. Under present policy dispensation a clear discrimination is going against the rural population. Rural education and health have totally collapsed. Most of the rural schools are without teachers. 25,000 posts of primary school teachers are lying vacant. Those in position are not performing their duty properly. The monitoring and supervisory machinery and teachers remain busy officially in work other than that of education. The same is the case with doctors and para medical staff positions which are mostly vacant (nearly 50 per cent) in the rural areas. The space vacated by the public sector withdrawal/collapse has not been occupied by private service providers. This has led to sharp differences in quality of human resources in the rural and urban areas. The rural population (66 per cent of the total) has lagged much behind and is being bypassed by development process. It is very well known that after 1993-94, no student with genuine rural background has been admitted in Punjab Agricultural University, Ludhiana. The same is the case with other universities. The urbanized students are cornering all admissions in the professional colleges (engineering, medical, agriculture, law etc.). The dairying is next to agriculture in the rural areas. The veterinary doctors positions have not been replenished since 1997-98 (for the last 7 years) and more than half are unfilled. Consequently, there is no one to attend to milch cattle falling prey to diseases, causing lot of risk to milk economy of the state and to individual farmers.
The economic transition in the state is becoming very painful. A large number of small and marginal farmers are becoming unviable. Many among of them are facing threat to their existence as farmers. Some among them at margin are committing suicides. Many such cases have been reported from the state. Several others are hysterically trying for escape routes such as emigration abroad which is very risky and costly causing a lot of agony and pain for the families. The principles of social justice require support and help for such families of poor cultivators, agricultural labourers and those escaping the state especially going abroad through unscrupulous agents. Such support would not come if national average formula is applied. As per national average, the state has lowest incidence of poverty and high income level, making the state undeserving for any special package.
These issues are mentioned here to draw attention of the Deputy Chairman of Planning Commission and Vice-Chairman and Deputy Chairman of Punjab State Planning Board. One is pained to say that even after restoration of democracy and peace in the state in 1992, the state has lost 13 years, but development orientation of the administration which got distorted during 1980s, has not been restored till this date. Neither bureaucracy and nor politicians are sensitive to the painful ground reality and the economy is steadily moving towards deceleration and decline in its ranking at the national level.

(The article has been taken from a longer article 'Planning and social justice' by Dr. Sucha Singh Gill, Professor, Department of Economics, Punjabi University, Patiala)

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