Sunday, May 27

Decentralise Economic Development Model

Punjab can rejuvenate its sluggish economy if Panchayti Raj Institutions are revitalised in a scientific way, writes Janak Raj Gupta, UGC Emeritus Fellow, Department of Economics, Punjabi University, Patiala in The Tribune
During a meeting with Punjab Chief Minister Parkash Singh Badal, Secretary to Government of India, Panchayati Raj, Meenakshi Dutta Ghosh told him that the Centre will not give grants worth Rs 270 crore to the state for the rural sector as the state government has failed to observe several guidelines. It is not for the first time that the Punjab government has been warned about the stoppage of Central funds. On many occasions in the past also the state has lost crores of rupees because of its apathy and failure to take track of Central funds. Even a recent report (The Tribune, April 24, 2007) shows that under the Jawaharlal Nehru National Urban Renewable Mission (JNNRUM), Punjab was to get Rs 520 crore out of the total Rs 50,000 crore earmarked for the purpose. However, because of the indifferent attitude of state machinery, Punjab could get a paltry sum of Rs 20 crore. Further, the Union Ministry for Panchayati Raj has also decided to set up an annual Incentive Fund amounting to Rs 5,000 crore for the period of Eleventh Five-Year Plan. What to talk of availing such facilities, one wonders if the state machinery is even aware of it. Presently, the crucial issue appears to be the propagation of the decentralisation model for economic development. According to the recommendations of the Twelfth Finance Commission (TFC), Punjab will get Rs 495 crore for local self governments out of which Rs 325 crore will flow to PRIs. But one thing which is not known to the higher ups is that Punjab’s share would have been substantially reduced had not the TFC abandoned the earlier decentralisation index as one of the important determinants to work out the inter-state share whereby it was mandatory for the state to implement the recommendations of the State Finance Commission. Already Punjab has appointed three State Finance Commissions, though the Third SFC has just submitted the interim report. However, the fate of the earlier two SFCs’ reports is not very encouraging. Unfortunately, local bodies in Punjab, particularly PRIs, have not received the attention they deserved. Punjab’s 66.08 per cent population still lives in rural areas, while the percentage contribution of agriculture as a whole, i.e., primary sector, has been declining. It is nearly 35 per cent today. This declining level of income has made Punjab farmers debt-ridden. Lack of employment opportunities in non-farm sector and poor health and educational facilities in the rural areas has added to their woes. Conventional mindset and inertia of the official machinery have further accentuated the problem. It is only the involvement of people at the grassroot level which can stem the rot. A decentralised model of economic development is the need of the hour. People living on agricultural income alone have to be provided with some supplementary sources of income at their doorsteps. Rural focal points need to be revived. However, in view of the non-availability of land for full fledged focal points, mini focal points or shopping centres can be created on centrally located panchayat land which could serve as a base for generating direct and indirect employment opportunities for semi-educated, semi-skilled and even unskilled workers by forming self-help groups (SHGs). Agencies like NABARD and commercial banks can be associated for financing such projects of the panchayats. The Union Ministry for Rural Development and Panchayats has been emphasising the need for creating rural business hubs to help panchayats collaborate with industry and strengthening the rural economy. Another concrete measure through which the Punjab government can help the farm community is to adopt crop insurance scheme in a big way. To begin with, the entire premium should be borne by such agencies as the Punjab Mandi Board. Since 50 per cent of the premium charged from the small and marginal farmers is subsidised, this will not impose much financial burden. Of late, increasing emphasis is being laid on inviting the mega projects which may accelerate the growth process in the state’s economy. However, it must be understood that they are reluctant to invest until and unless substantial tax benefits and freebies are offered to them. Secondly, these are mostly labour saving projects, and whatever labour is employed would be mostly the cheap migratory labour. Thus, salvation of the Punjab economy lies in strengthening its rural economy through decentralised planning model, where PRIs can play a dominant role. One cannot belittle the important role which PRIs can play in augmenting and improving infrastructural services in rural areas. Panchayats are in a better position to induce the NRIs and other donors for financing such services which can lead to substantial reduction in public expenditure. However, strengthening PRIs is not an easy task due to the prevailing mindset of the bureaucracy. It is often alleged by vested interests that it is not possible to transfer powers to the PRIs because these are belligerent with political rivalries. But is the state legislature and even Parliament free from such distractions? This has not belittled the importance of these institutions. Punjab can rejuvenate its sluggish economy and regain its lost glory on the social and economic fronts if PRIs are revitalised in a scientific way as has been done in Kerala. This southern state has consistently maintained its top notch position in the country insofar as human development index is concerned.

No comments: