The ruling alliance had come to power in 2007 making populist promises like liberal subsidies and freebies. Any tax burden on the people is bound to ignite popular protests which would give a handle to the faction-ridden Congress, now trying to come out of protracted hibernation, to launch an agitation. If any tax is imposed only on urbanites who have been facing the brunt of additional resource mobilization, it would annoy the ruling partner BJP. The party has been demanding that the burden of any taxation measure should be equally borne by urban and rural areas. If it is imposed only on urbanites, it would hit its main urban support base and further widen the schism between the ruling allies. If the rural areas are also covered by new taxation measures, it would hit Akali Dal's own Sikh support base.

The dilemma has already been creating embarrassing situations for the ruling leadership. For instance, when power tariff was recently hiked for domestic and industrial consumers, the BJP protested demanding that like the agriculture sector the hike should also be subsidised for the domestic and industrial consumers. A two-member committee comprising Deputy Chief Minister Sukhbir Singh Badal and Local Bodies and Industries Minister Manoranjan Kalia (BJP) was set up to take a decision on resource mobilisation and the entire gamut of subsidies. The Committee was given one month's time to make its recommendations. But in the meantime, the Electricity Board started sending hiked charges bills to the consumers without the government giving any indication that the enhanced bills would be adjusted later in subsequent bills after the issue of subsidizing the Electricity Board is decided.

It was on BJP's protest that the committee held its first meeting after the end of its one-month deadline. But the committee has failed to come out with its recommendations so far.

Well-wishers and admirers of Punjab and its people must be feeling shocked that once topping the list of India's prosperous and best administrated states, its downslide both in matters of governance and economy has pushed the state many notches down in the list with some experts even equating it with UP and Bihar. Although the state's previous Congress and Akali-BJP governments also contributed to this unfortunate state, it is during the present Akali-BJP rule that the situation has worsened.

A glimpse of its sorry state of finances. The state has been caught in a debt trap with its debt likely to touch Rs.63, 200 crore by the year end. The government is borrowing Rs.500-600 crore every month selling off over Rs.400 crore of Government securities each month. Punjab is nearing even the relaxed limit of borrowing. It can borrow Rs.6219 crore till March 31, 2010 while it has already raised loans worth Rs.4300 crores of which Rs.1200 crore go towards paying earlier loans.

The fiscal crunch is impacting the government's day-to-day functioning as state's revenue resources and loans are barely enough to meet salary and pension bills and serving the growing debt. There is no likelihood of the government employees being paid the arrears of the hiked wages during the current year. The government is losing central grants of hundreds of crores for failing to meet its own commitments. The ambitious power projects the alliance had, on assuming power, promised to launch and complete within three years show no sign of progress and may not be completed before 2012. The Punjab Agricultural University whose research gave new crop varieties ushering in the Green Revolution has been starved of funds badly affecting research work and creating problems in paying salaries and pension of its employees.

The most damaging reprimand for the sorry state of affairs in Punjab came from the Punjab and Haryana High Court's Division Bench of Chief Justice Tirath Singh Thakur and Justice Mahesh Grover during the hearing of a public interest litigation last week on the issue of construction of new court complexes in the state. The Chief Justice even suggested a cut in the security of the Chief Minister and his own security cover for generating enough resources for the purpose!

On the political front, frequent squabbling has been taking place between the alliance partners who have been trying to promote their respective political interests at the cost of the state's financial health and government's functioning. Though the squabbles sometime create an impression of creating political instability, yet there is no likelihood of the ruling allies parting ways at least in the foreseeable future. In Punjab's demographic arithmetic, they cannot ride to power or retain it without each other's help.

Real well-wishers of Punjab which Chief Minister Parkash Singh Badal and his Akali Dal claim to be must not allow the state's further downhill slide. (IPA Service)