Punjab’s fiscal health which had started showing signs of improvement in the beginning of the 1990s after its sharp setback during the 1980s terrorist years, recorded a steep fall during 2002-2015. Though Capt. Amarinder Singh-led Congress government’s 2002-2007rule had also contributed, it was during the Akali-BJP’s 2007-2015 rule that the economy recorded its steepest decline often forcing the state government to seek huge loans from Banks and even sell/mortgage properties of some of its entities. According to a media report, the government has sought Rs.2,500 crore loan for urban and rural renewal by providing guarantees to Banks some of which had initially expressed apprehensions over advancing loans to the state government.

Ironically, even as Punjab’s financial health has been worsening during the past ten years that of the dominant ruling Akali leaders and their families has recorded enormous growth during the period mainly due to their monopolizing some of the money spinning businesses. Contrarily, the common man, hit by essential commodities ever rising prices has been the main sufferer.
Two factors are mainly responsible for Punjab’s worrisome fiscal health. One is the freebies-loaded populist promises the ruling leaders have been making during the run-up to elections. The other is the Modi government’s failure to fulfill its promises of helping Punjab to come out of its huge debt trap and ensure its financial stability.

Ruling politicians usually fail to honour their promises due to budgetary constraints and their unviable priorities. But whenever their electoral compulsions make them fulfill their promises, these further worsen the state’s fiscal health at the cost of common man’s welfare schemes.
Two instances exemplify this sorry state of politico-economic scenario. For instance, on coming to power in 2007, Sukhbir Badal made his first major promise at his maiden press conference held at Chandigarh that Punjab, suffering due to acute power shortage, would be made a power surplus state within three years. But even after eight years, the common consumer still waits for assured round-the-clock power supply.

The second example was the Badal government’s decision to continue its policy of free power supply for the farm sector whose cost to the state exchequer, currently estimated to be around Rs.6,000 crore a year, has been constantly rising. Pressures by non-Akali parties, economists and even BJP that only marginal and small farmers owning upto five acres should be provided free power failed to evoke positive response from the dominant ruling Akali leaders. Had the suggestion been accepted an overwhelming majority of Akali leaders and their supporters owning larger holdings would have been deprived of free power largesse.

Sukhbir seems to have a fixation with figures ‘three’ and ‘two’. He has been making promises assuring their fulfillment within two or three years. Besides his 2007 aborted promise of making Punjab a power surplus state within three years, he had also committed on the 2012 assembly elections eve that Ludhiana would have its Metro in three years. But the project is only on paper with no signs of its materializing in foreseeable future.

Though there are many other time-bound broken promises, the credibility of Sukhbir’s commitments will be tested if the government comes out with data specifying how many projects have come up after it signed 117 MOUs with mega companies at Progressive Punjab Investors Summit held on December 9, 2013. The mega companies had committed an investment of Rs. 65,000 crore.

The issue assumes significance in the light of the last week’s World Bank survey for “ease of doing business” in which Punjab was dismally ranked at No.16 out of the country’s 32 states and Union Territories.

Even as the ruling leadership claims that during his recently undertaken foreign trips Sukhbir has elicited more promises for foreign investments, a large number of the crisis-hit industrial units of Punjab including iron and steel, hosiery and textile units, have either been shutting down or shifting to other states like Himachal Pradesh, blaming the Punjab government for its failure to mitigate their problems. The situation has come to such a pass that some of the industrial units of Ludhiana, once considered the country’s small scale industrial capital, have shifted even to Bihar.

It is said that “a friend in need is a friend indeed”. Ironically, in Punjab’s case, the Akali Dal and its ruling ally BJP who claim to be “life-long friends” have failed to be “friends indeed”.

Chief Minister Parkash Singh Badal has been meeting and writing to prime minister Modi to bail the State out of its present financial mess and fulfill his promise of providing special economic package. Arun Jaitley’s stand, however, has been that the centre has already increased the states share in the centre’s tax revenue from 32 per cent to 42 per cent. This increase, however, has a mandatory binding clause under which the Centre has made sharp cuts in the allocation of money under the centrally funded schemes.

As the situation stands today, one is not sure if and when the Modi sarkar will provide relief to the crisis-hit Punjab. Keeping the past developments in view, pessimists are skeptical about Punjab getting instant unconditional substantial relief from the Centre to help it overcome its acute financial problems. Despite the Jammu and Kashmir chief minister Mufti Mohammed Sayeed’s repeated requests to Modi to provide the promised Rs.44,000 crore for rehabilitation of the victims of last year’s devastating floods, the Centre has so far not given any positive response.

Modi’s hitherto indifferent attitude on Badal and Mufti’s demands should not surprise anyone. It is usually proxy of elections when those heading the governments turn generous in providing funds for luring voters. This is what Modi has done by announcing a huge Rs.1.25 lakh crore package for the poll-bound Bihar. Badal and Mufti will have to see if and when Modi offers necessary help to the anlins stats. (IPA Service)