The economy of Punjab is on life support and a multi-pronged strategy to revive it has to be put in place. Policy makers need to examine alternate and viable strategies of growth. The focus must shift from only agriculture to floriculture, tourism, industry and the services.

LIGHT UP THE PILGRIM TRAIL: A view of the Takht Damdama Sahib at Talwandi Sabo. There is a need to develop tourist circuits at sites of pilgrimage.

A farmer at his sunflower farm on the outskirts of Jalandhar. It is important for Punjab to break the paddy-wheat cycle.

Charan Singh

PUNJAB has a new government led by an experienced Chief Minister who has an opportunity to turn around the ailing state suffering from high unemployment and low growth. Punjab has had a unique history. In a short time, from a semi-arid land, thanks to Green Revolution, it became the granary of the country and the richest state of India. These good times were short lived. Historically, in the mid-1960s, India was passing through severe drought conditions, and it was a challenge to feed 50 crore people, of which nearly half were below the poverty line. Food aid, globally, was difficult and was largely used to manipulate geo-political decisions. Hence, to be truly independent, it was crucial to ensure national food security. Punjab, though short of rainfall, was considered perfect for an experiment of high-yielding variety of seeds. The Green Revolution, ably supported by canal and tube-well irrigation, and minimum support price of the government, ensured food security but changed the cropping pattern in Punjab. In 1971, 39 per cent of the land area was under wheat, 7 per cent under rice, and 55 per cent under various crops like gram, maize, cotton, bajra and groundnut. By 2015, 49 per cent was under wheat, 41 per cent under rice and 10 per cent under others. In terms of per cent share of major crops in production, the story was obviously similar. The high dependence on rice and wheat, and over-exploitation of land led to unforeseen complex problems. The rapidly depleting water table in face of non-adoption of micro-irrigation, and high toxicity of soil because of over-use of fertilisers and pesticides led to unfolding of health issues reflected in the high incidence of cancer and kidney failure.  The state, given its critical fiscal situation, cannot support present levels of standard of living through subsidies. There are no employment opportunities for the youth, who are increasingly turning to drugs – a recipe for a social disaster.

Alternate models of growth

The academia and policy makers of Punjab need to start examining alternate models of growth to transit from mono-emphasis on agriculture to tripolar dependence on agriculture, industry and services. To have sustainable agriculture, Punjab needs to expedite alternatives like exploring floriculture and horticulture. To meet challenges, agricultural university needs to support these endeavours as it did in the past for rice and wheat. Similarly, there is an urgent need to go in for agro-processing of agricultural produce, and that too by farmers’ collectives, to yield additional income and employment. There is no escape from industrialisation. Punjab has to decide as to which are new industries that can be attracted and then provide suitable incentives while taking advantage of the Centre’s successful “Make-in-India” campaign. In India, illustratively, the aerospace industry has been booming in the last few years, especially, in South India. Aerospace industry plans an investment of a trillion US dollars and capacity to create 2 million jobs. Presently, there are only few assembly facilities in places like Bangalore.  Similarly, Punjab is known for its crafts and skills in jewellery, carved furniture, embroidery, phulkari, soft toys for children, specialised food items, and leather products.The need is to explore synergy in labour-intensive crafts and MSMEs. The government could consider supporting the marketing of such products. The largest scope for growth is in services sector, and Punjab could explore medical tourism which is being encouraged by the Central government. Annually, about 2 lakh tourists arrive, mainly from neighbouring countries, the Middle East and Africa to Maharashtra, West Bengal, Delhi, Andhra Pradesh and Kerala. Given that the Centre is already promoting pilgrimage tourism, there is a need to develop tourist-circuits of historical and pilgrim venues of different faiths in Punjab. Religious tourism can have a multiple effect on employment generation as it promotes local culture, handicrafts, and cuisine. Finally, farm tourism which has been successful in Kerala and Maharashtra, should also be strengthened in Punjab.

Skill development

In view of the protectionist policy being pursued by advanced countries, especially the USA and some countries in Europe, Punjab needs to take advantage of the Central government’s policy of skill development. The Centre has already signed MoUs for skill development with several countries like the United Kingdom, Germany, Australia, USA, Canada, Singapore, the European Union, and France. The government’s Pravasi Kaushal Vikas Yojana aims to train and certify Indian workforce keen on overseas employment in select sectors and job roles in line with international standards to facilitate overseas employment opportunity.Similar to the look-East policy, India can also consider strengthening its trade and cultural relations in the North-West by creating in Punjab a trading hub of goods and services for Central-Asian countries like Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, Tajikistan, and even Afghanistan. These Central-Asian republics can be connected to India through Punjab rather than the extensive long sea route from Mumbai. Interestingly, Zahedan in Iran is already connected by an all-weather road and 1,676-km broad gauge railway line to Amritsar.Finally, there is an urgent need to strengthen the state planning board which can help inspire multilateral lenders like the World Bank as well as experts from universities like Harvard and Stanford, to give advice on development plans. A professionally managed planning board could serve as an anchor to steadily steer Punjab into high growth. Punjab has been in the forefront of providing food security to the nation but now it needs help. The band-aid approach would not be able to cure the ailing economy of Punjab which is in the ICU and therefore, this time thorough diagnostic tests are required to honestly identify the specific root causes of the disease. On completing the “identification” exercise, the Punjab government needs to prepare a road map, with milestones, based on wider consultations. The road map, given the critical situation, would have to be implemented in mission mode and diligently sequenced so that the health of the economy is restored without harming the sentiments of people or disrupting normal economic activity. It would have to be a very carefully planned surgical operation, given the sensitive circumstances. Reviving the ailing economy would be a lasting contribution of the experienced Chief Minister to the land of his forefathers. The writer is a Professor in the Department of Economics & Social Sciences, IIM  Bangalore