Punjab growth and development

Punjab has lagged behind in the race for development as it has a growth rate of only 6% as compared to national growth rate of 8.5%. Industry recognizes punjab as a big market not as an investment destination. Many factors are responsible for this slack in growth rate, I have explained some of them below:

1. Will amongst politicians: It does not matter which party has ruled punjab and at what time, there have always been scams, scandals which have cost the exchequer dearly. Timely completion of a project has never been done, in some cases(bridges and roads) second grade materials have been used to fill the coffers of politicians. Licensing has become a personal court of politicians who have received exorbitant amounts for granting of licenses for various business activities and changing the plan of a project to squeeze money out of it. Administrators will have to focus on the development of the state and should not mire development process for their own short term goals. Politics dependent upon sops cannot garner votes but instead makes the exchequer hungry for money and leaves much less for buffer stocks. Good politicking has demonstrated how things can move much faster, how an efficient administration is built and how justice is brought about by the efficient utilization of public funds and resources.

2. Corruption and inefficiency of bureaucracy : Bribes ruin the image of administration and the public becomes wary whether law of the land applies to the lawmakers and administrators themselves or not. Corruption is the biggest cause for wrong channelization of public funds, schemes and development funds. A scrupulous administrator not only ruins his/her own image but also mars the power, efficiency, influence and work ethics and credentials of the whole administrative setup. When people do not have confidence in the working of the administration they do not respond well to government orders, rules and regulations. Stricter laws are required to handle investigation into corruption cases and fair investigation is necessary to ensure credibility in the whole process. A methodology should be employed to ensure that influential people do not get away easily and should not turn the investigation procedure into a farce.

3. Lack of attractive investment climate: Policy management is a key layout for attractive investment climate in the state. Skilled labor, tax exemptions, lesser bureaucratic hassles, fast clearance of plans and projects, corruption free administration, geographical location, ease of access to important and required information each put in their own share in ensuring investment. Red tape just bundles an ambitious project in paperwork and discredits time management so there is a need for the system to be fast, reliable and transparent in ensuring timely completion of projects. Tax exemptions also act as a magnet for industry to invest in any area, hilly states surrounding punjab have reaped the benefit of such exemptions. Geographical location is also an important factor which filters investment into strategically located places, large parts of punjab have a geographical disadvantage in attracting industry.

4. Migration of skilled and innovative work force: Skilled people have been migrating from punjab to other states and foreign lands which deprives the state of intellect and creativity. The impact of such a migration is not realized immediately but intellectuals, professionals, scholars have a large share in an economy and if punjab is not able to retain people with ambitions greater than life it shows that the state has a long way to go in setting up institutes of excellence.

5. Dragging agricultural sector:

The national agricultural growth rate is less than 4% and punjab has an agricultural growth rate of less than 2%. Punjab has 89% of its area in use for agricultural activities so there is no scope for increasing area under cultivation. Punjab farmers are reeling under the highest debt per household in the country and it being a largely agrarian economy leaves a large chunk of its population starved. According to various estimates punjab farmers have a staggering debt of $6 bn which obviously underscores growth in other sectors of economy and becomes more of a drag. Punjab has been feeding India all these years and there should be a consistent plan to rid them of this burden and guide them to the path of prosperity. Punjab has overexploited its land and water resources in feeding the whole country. Now there is a need for diversification in agriculture in Punjab from the traditional wheat rice rotation otherwise water table can dip to further dangerous levels and become unrecoverable. There is need of a comprehensive crop insurance policy, more subsidies on farm inputs, linking of MSP with the price index, reduce interest rates, take measures to save tillers and marginal farmers from exploitation at the hands of moneylenders and middlemen. Majority of debts in punjab constitute private money lending which have very high interest rates. All these measures if taken in an organized manner will ease the debt burden but there should be a mechanism to ensure that they are implemented efficiently and there should not be any short term goals and sops but consistent and long term benefits.