Mohan Guruswamy (pictured below), Chairman, Centre for Policy Alternatives, New Delhi, has touched the raw nerve of Punjab in his article which appeared in Scroll.in on April 20, 2016. We are reproducing the same in toto with the hope that there will be a healthy and serious debate in Punjab's intellectual, social and political circles on the points raised in the article.
The Rs 20,000 crore-foodgrain scam is just another step downhill for the state that was once projected as a role model.
There was a time when Punjab was India’s model state. It was number one in almost every field. But for several decades now, it has been saddled with corrupt and inept governments. From being a role model for other states, Punjab has now become a disaster zone and a national burden. Now the Badal family-headed Akali Dal, ruling the state in alliance with the Bharatiya Janata Party, has taken bad governance to a new level.
Punjab's rulers have done better than many of our industrialists in extracting funds from our Public Sector Banks by borrowing for its food purchase scheme against non-existent stocks, or by disposing off hypothecated stocks. The Reserve Bank of India has ordered lending banks to declare the advances as Non-Performing Assets. It is learnt that about Rs 20,000 crore worth of foodgrain has gone missing from its stocks. They either were never there, or hypothecated stocks were disposed of, or both. The hole is huge and the banks will be unable to lend more money to the Punjab government.
So who comes to its rescue? It is the friendly Central government, which is now going to give it cash credit of Rs 20,000 crore so that food purchases can go on as usual. It was only last week that the Supreme Court had to tersely order the Central government to immediately release budgeted Mahatma Gandhi National Rural Employment scheme funds for famine relief works in acutely drought-hit regions like Marathwada in Maharashtra.
Consequently, the Centre reluctantly released Rs 12,000 crore. Maharashtra has a BJP-led government, but unlike Punjab it doesn't have elections soon. So BJP ministers like Eknath Khadse can use scarce water to bind the dust down at helipads and Pankaja Munde – bejeweled hands and all – can take selfies at drought relief works in Latur. But in Punjab, the viability of the Punjab ruling elite's business is seriously challenged and the rejected MP aspirant from Amritsar, who is now the finance minister, responded with alacrity to help his friends tide over a tight spot.
Despite this, the Punjab Civil Supplies and Food Minister, Adarsh Prakash Singh Kairon, a man with a prominent lineage, has the temerity to say: "The food purchase scheme is not a profitable proposition. Punjab is mainly doing it in the national interest.”
The notion that Punjab feeds India is quite absurd now. India has for a few decades now produced much more foodgrain than it needs. Since 1991, India has exported foodgrain worth an average of Rs 6,000 crore every year, and last year this figure touched Rs 27,000 crore. The production has been in the vicinity of 260 million tonnes during the past three years, despite drought. India has food reserves of 49 million tonnes worth Rs 50,000 crore, which is twice more than is needed.
So it is actually the other way around. The rest of India supports Punjab with this absurd Minimum Support Price scheme, which is actually an above-the-market price scheme. This combined with the Public Distribution System of low-priced cereals is actually a gigantic subsidy scheme. The total subsidies allocation in the 2016 budget is Rs 250,433 crore, of which more than half goes towards food subsidy, and another quarter goes for fertiliser subsidy. The bulk of the procurement accrues in the states of Punjab, Haryana, Andhra Pradesh and Madhya Pradesh. This means the bulk of the minimum support price subsidy accumulates here.
There is no doubt that Punjab is a major foodgrain production centre, but the notion that it feeds India is quite exaggerated. In 2015, the total national foodgrain production was 264 million tonnes of which Punjab produced 27.4 million tonnes or about 10%. Admittedly, Punjab’s productivity is much higher than the rest of the country’s as it accounts for only about 5% of the 54 million hectares of irrigated farmland.
The claims of the Punjab government too foster this fiction. Its website claims:
"It [Punjab] contributes nearly two-thirds to the total production of food grains and a third of milk production in the country. It is the leading producer of wheat, thereby contributing to the national food security. Even though Punjabis account for less than 2.5% of the Indian population, they are one of the most prosperous races in India. Their per capita income is twice the national average.”
The national per capita income at current prices is Rs 74,000 and Punjab’s is Rs 92,000. Yet most of us have internalised the long gone story of Punjab standing between India and starvation, and Punjab being the most prosperous state in the country.
God and this country have both been good to Punjab. Today, 85.2% of all land in Punjab is arable, and 89.7% of it has perennial irrigation. More than half of this is due to the huge central government projects – Bhakra Nangal being the most notable among them. The British, in their quest for land revenue, rightly chose Punjab for special attention. They invested in its irrigation. But after 1947 this trend was accelerated. In 1955, the total national outlay for irrigation was Rs 29,106 lakh. Of this Punjab got Rs 10,952 lakh or 37.6%. In contrast, Bihar got only Rs 1,323 lakh, which is only 4.5% of the irrigation outlay. The Bhakra Nangal dam, one of Jawaharlal Nehru’s grandest temples of modern India, planned with an outlay of Rs 7,750 lakh, alone irrigates 1.44 million hectares, or about 40%, of Punjab’s net irrigated area. The consequences of this bounty are manifold. Punjab surged ahead.
The spectrum of regional inequalities in India is a very wide one. Punjab and Bihar represent the two ends of the wide spectrum. Though this might even have been the case historically, a study of state GDPs in the decades after independence reveals that the width of the spectrum has only widened. In 1965 Punjab’s per capita income was Rs 562 and was 1.7 times that of Bihar’s Rs 332. Punjab now has a per capita income of Rs 92,000 and Bihar Rs 31,000, or about 3:1. But other changes have also set in. Once India’s most prosperous state, it now lags behind Haryana, Maharashtra, Gujarat, Kerala and Telangana, and is about par with the neighboring hill state of Himachal Pradesh.
Punjab has all the bounties nature can give, and it has had more than its rightful share of central government assistance, not just in terms of food procurement and subsidies but also by way of employment. Punjab has benefited by a disproportionately large recruitment into the armed and paramilitary forces giving most rural families a second stream of income. Each year about 60,000 Punjabi officers and men retire from the armed forces, and over a million now draw pensions. Yet Punjab is afflicted with a severe blight. A study by the department of Social Security Development of Women and Children found that 67% households in Punjab have at least one person addicted to drugs. Yet another study by the Narcotics Bureau discovered that almost 40% of men in Punjab are addicted to drugs.
So what has brought Punjab to this pass? One reason is that Punjab has been reeling under bad governments. Its politicians and their bureaucratic fellow conspirators, irrespective of party affiliations, have been among the country’s most venal and corrupt. Salwinder Singh, a Punjab superintendent of police, is alleged to have facilitated the January attack on the Pathankot airbase by Pakistani terrorists. The silence that has descended around him is understandable. According to a former Punjab director general of police, a few years ago the intelligence department had compiled a list of the state’s drug barons. This list had names of powerful politicians from every political party and police officials at every level. Salwinder Singh is only the tip of the iceberg. Unless Punjab gets a better government this slide will continue.
(Courtesy : www.scroll.in)