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EDITORIALS

Chaos at airports
Mismanagement adds to travellers’ woes

I
t
is very convenient for Civil Aviation Minister Praful Patel to blame the inclement weather for the delay, diversion and cancellation of a large number of flights at Delhi airport. Fog does play a crucial role in flight disruptions but the government and the airlines cannot escape responsibility for the utter chaos and mismanagement at the airports. They have not invested enough in the latest technology and training of pilots to beat the fog, which is an annual feature in North India.

Height of insecurity
Honour killing aftermath continues

M
anoj
and Babli were provided protection by the court after they married in the same gotra in 2007. Yet, that did not prevent the self-appointed protectors of morality from butchering them, while the police escort almost looked the other way. The same horrifying story is now being repeated, with Seema, sister of Manoj, being threatened by a criminal on parole that she and her family would be eliminated.



EARLIER STORIES

GSLV failure
December 28, 2010
Move faster on the corrupt
December 27, 2010
Private security: Coping with new realities
December 26, 2010
Rampant food inflation
December 25, 2010
Destructive politics
December 24, 2010
Withdraw agitation
December 23, 2010
PM’s offer to face PAC
December 22, 2010
Taking on corruption
December 21, 2010
Row over Rahul’s remark
December 20, 2010
Intelligence is gathered from ‘friends’
December 19, 2010
Trade to cement ties
December 18, 2010


Clamour for Telangana
Political parties must exercise restraint

W
ith
just three days for the Justice B.N. Srikrishna Committee to submit its report to the Centre on the feasibility of carving out Telangana from Andhra Pradesh, the situation in the state is turning aggressive day by day. If adequate measures are not taken by the government promptly and the political parties do not exercise restraint and rise above narrow partisan ends, law and order in the state will be jeopardised and development, too, will be adversely affected. 

ARTICLE

Anti-Indianism in Nepal
Need to relate with popular aspirations
by S.D. Muni
Showing
black flags to the Indian Ambassador in Nepal and hurling shoes and stones at him over the past couple of months has taken the expression of anti-Indianism in Nepal to new lows. This is unprecedented because no Indian Ambassador has been treated in Nepal so shabbily, though expression of resentment against India on one issue or the other has often chracterised the dynamics of bilateral relations between the two countries.



MIDDLE

Turban tales
by Roopinder Singh
I
T was a nice party and we were all enjoying ourselves to celebrate the success of a friend. My friend introduced me to some young foreigners as "Osama’s brother". The two couples were from South Africa, globe-trotters and well exposed to international travel and traditions. London figured in our conversation, too. For me it’s the place I visited first when I ventured away from the Indian shores. These couples had found work there, in the recession, mind you, which had a lot to say about their abilities.



OPED STATE FINANCES

West Bengal, Uttar Pradesh, Maharashtra and Punjab are among the highly indebted states. The politics of populism, freebies and irrational subsidies is often blamed for the indebtedness of states. A less-known fact is: the most indebted states get a poor share of the Central taxes and grants. Here is an analysis of the issue of debt:
Debt's the problem
Bikram Singh Virk

T
he
debt burden of the states is constantly rising. According to a report compiled by the RBI on the budgets of all states for the fiscal year 2009-10 (Budgeted Estimates), the combined debt of all 30 states of India has reached Rs 14.5 lakh crore from Rs 4.9 lakh crore in 2001, a near three-fold increase in a decade.

 


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Chaos at airports
Mismanagement adds to travellers’ woes

It is very convenient for Civil Aviation Minister Praful Patel to blame the inclement weather for the delay, diversion and cancellation of a large number of flights at Delhi airport. Fog does play a crucial role in flight disruptions but the government and the airlines cannot escape responsibility for the utter chaos and mismanagement at the airports. They have not invested enough in the latest technology and training of pilots to beat the fog, which is an annual feature in North India. Passenger harassment can be minimised if information about changes in flight schedules are communicated well in advance. And that is not a tall order when almost everyone has a mobile.

The failure on the part of the government and airline authorities — quite evident in Delhi and elsewhere — should attract a severe penalty. It is true Delhi airport handles the largest number of flights in the country and the airport has been upgraded to global standards. But that is cold comfort to thousands of passengers whose travel plans go awry and who miss out on engagements apart from facing inconvenience in getting refunds or rebooking flights. All this happens at a time when they are in a holiday mood and have bought expensive packages. Should they not be compensated? The British government is already contemplating a law to penalise the airports for delays.

As for road and rail travel, Rajasthan’s Gujjars could not have chosen a worse time to press their demand for reservations in jobs. By blocking railway tracks and highways they have displayed unusual insensitivity towards the travelling public. Here also the state government has abdicated its duty to ensure the smooth movement of vehicles and trains. Thousands of trucks carrying essential goods are held up, contributing to price rise. There is no reason why the unreasonable protesters should not be dealt with firmly. Natural calamities are perhaps unavoidable but facing them efficiently should be our collective endeavour.

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Height of insecurity
Honour killing aftermath continues

Manoj and Babli were provided protection by the court after they married in the same gotra in 2007. Yet, that did not prevent the self-appointed protectors of morality from butchering them, while the police escort almost looked the other way. The same horrifying story is now being repeated, with Seema, sister of Manoj, being threatened by a criminal on parole that she and her family would be eliminated. This in spite of the fact that Seema happens to be a police constable herself. In fact, the way she has been let down by her department, it appears that the police is siding with the criminals this time also.

The criminal, Varinder alias Billu, dared to enter the Madhuban Police Academy, where Seema was posted, and threatened to kill her and her family. When she reported the matter to the Madhuban police, it refused to register a case on the plea that Varinder was undergoing imprisonment in a case that fell under the Panipat police jurisdiction. When she went to Panipat, she was told that since the threat was issued at Madhuban, the complaint would have to be registered by the Madhuban police. The common man is made to run from pillar to post this way, but one had thought the men in khaki would be a little more considerate towards someone from their own ranks, especially since her brother had already been murdered.

To make matters worse, instead of providing her security, the authorities transferred her post haste to Yamunanagar, where she is far more vulnerable. If this is what lies in store for a police constable, one can well imagine the sense of insecurity among the ordinary people. It is high time senior police officials realised that it should not be necessary for hapless citizens like Seema to beg for security. It is the paramount duty of the police to do so. They let down Manoj and Babli. Let the sordid tale not be repeated. 

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Clamour for Telangana
Political parties must exercise restraint

With just three days for the Justice B.N. Srikrishna Committee to submit its report to the Centre on the feasibility of carving out Telangana from Andhra Pradesh, the situation in the state is turning aggressive day by day. If adequate measures are not taken by the government promptly and the political parties do not exercise restraint and rise above narrow partisan ends, law and order in the state will be jeopardised and development, too, will be adversely affected. What the state is witnessing today is competitive politics with the Congress and the Telangana Rashtra Samiti (TRS) indulging in theatrics and one-upmanship in espousing the cause of Telangana. The conduct of the Congress MPs and MLAs representing the Telangana region is shocking. Following a three-day hunger strike in Hyderabad, Chief Minister Kiran Kumar Reddy was forced to bow to their demand for withdrawal of over 1600 criminal cases against student protesters. These students were arrested for indulging in arson and violence during the Telangana agitation last year.

The fast by the Congress legislators seemed to be a well-scripted drama. For, though the TRS, the Telugu Desam and the BJP have been demanding withdrawal of charges against the students for quite some time, the government did not yield, maintaining that the courts might object to the release of those charged with serious offences. Apparently, what prompted the government to make a U-turn now is the realisation in its camp that it should outsmart the TRS and project itself as a better champion of Telangana than the former.

One does not know what is up in the sleeves of Congressmen. But reports suggest that a substantial number of its MPs, MLAs and MLCs from the Telangana region have threatened to resign their posts if the Centre fails to announce the creation of Telangana state. Any such decision will only harm the interests of the state, destabilise the present government and give a rope to parties like the TRS and the Telugu Desam to disturb peace. The party leadership at the Centre and in the state would do well to rein in recalcitrant legislators. The new Chief Minister, who is yet to get a grip over the state, seems to be feeling the heat. Ironically, the ruling party itself is creating hurdles in the smooth functioning of his government just as the Opposition (including Mr Jagan Mohan Reddy) did to his predecessor, Mr K. Rosaiah.

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Thought for the Day

The more the state “plans” the more difficult planning becomes for the individual. — FA Hayek

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Anti-Indianism in Nepal
Need to relate with popular aspirations
by S.D. Muni

Showing black flags to the Indian Ambassador in Nepal and hurling shoes and stones at him over the past couple of months has taken the expression of anti-Indianism in Nepal to new lows. This is unprecedented because no Indian Ambassador has been treated in Nepal so shabbily, though expression of resentment against India on one issue or the other has often chracterised the dynamics of bilateral relations between the two countries. While Indian policy has occasionally taken into account the specific incidents of anti-Indianism and responded to them, there has seldom been an in-depth and objective analysis of this phenomenon and a measured effort to eliminate it.

There are two levels to look at the phenomenon of anti-Indianism in Nepal — one at the level of the state and the other at that of the people. Ever since its establishment in 1769 by Prithvi Narayan Shah, the Nepali state has always been weary of its southern neighbour for the latter’s overwhelming size and resources that made Nepal excessively dependent and subdued in bilateral engagements. To this essentially geopolitical sense of caution, natural between such two close but highly unequal neighbours, was added the sense of insecurity of the regime following India’s independence.

The feudal autocratic oligarchy of the Ranas that had enjoyed British protection and patronage since 1847 could not sustain itself in the proximity of a resurgent democratic India. Their fall in 1951 transferred their sense of regime insecurity vis-ŕ-vis India to the autocratic monarchy headed by King Mahendra, who thwarted the process of democratic evolution in Nepal by taking over power directly. The opponents of both the Ranas and King Mahendra drew active support from the Indian democratic state as well as its populist society.

The Ranas for a while during the early fifties and King Mahendra and his successors on a sustained basis until recently tried to nurse Nepali nationalism on anti-Indian diet primarily as a device to keep their hold on power. India’s message to the feudal rulers has been that in view of the gradually awakening Nepali masses and the changing geo-political context of the Himalayas, between a democratic India and an assertive communist China, Nepali polity must democratise, even if without abandoning monarchy, as it was not viable. This message was welcomed by a liberal king like Tribhuwan but could not carry conviction with his assertive and autocratic successors.

To cushion itself against pressures from India, the feudal regimes exploited international and regional contradictions to mobilise external support. The US support since the Rana period was rooted into the Cold War calculations as India then stood on the other side of the global strategic divide. In the regional context, Nepali rulers found China and Pakistan more than willing to develop strategic stakes in Nepal at India’s cost since the late fifites. Internally, the Nepali monarchy encouraged such political forces that worked for anti- democratic and anti-Indian mobilisation, such as the communist and the feudal groups. This facilitated the percolation of anti-Indian sentiments in political and social constituencies for decades. There is a whole generation of Nepalis brought up on the heavy diet of anti-Indian nationalism.

At the people’s level, among some of the social groups, particularly the sections of tribal (Janjatis) and marginalised communities, the anti-India sentiment goes centuries back, to the time when they were conquered through force by Prithvi Narayan Shah, in the process of creating the present state of Nepal. The Shah King’s lineage is traced to India in the perception of these hill-based communities, including the Kathmandu valley’s original inhabitants, the Newars. The tribal and marginalised communities have also perceived India as a protector and promoter of the Nepalese monarchy, seen as the source of their long-standing marginalisation and discrimination. The Newars, besides their strong undercurrent of anti-monarchy (Shah kings) sentiment, also felt uneasy with India because as the principal trading community of the capital valley, they had to confront the Indian trading regime and face competition with the Marwari trading community having Indian roots. All these communities were mobilised by the Maoists in their confrontation with Nepal’s feudal state. This confrontation turned into a people’s movement (Jan-Andolan-II) with the mainstream parliamentary parties joining it in 2005-2006.

The success of the people’s movement in Nepal created a huge window of opportunity to change the dynamics of anti-Indianism. This movement comprised the majority of those social groups that had been either apathetic or unfriendly towards India. India’s complete and unflinching identification with the emerging forces of the people’s movement and the aspirations of a secular, republican, inclusive and democratic new Nepal could go a long way in blunting India’s traditional image of a patron of the feudal state. India extended critical support to this movement but with two caveats; inherent preference for constitutional monarchy and strong aversion to a Maoist-led Nepal. The preference for constitutional monarchy was exposed when India’s Special Envoy, Dr Karan Singh, endorsed a partial royal retreat before the people’s movement in the form of the first Royal proclamation of April 21, 2006.

India’s top political leadership continues to keep close personal and political rapport with Nepal’s discarded royals notwithstanding the fact that none of India’s core national interests in Nepal was served under monarchy. The aversion towards the Maoists, often fuelled by exaggerated and knee-jerk strategic and ideological considerations, has led to the fragmentation of Nepali politics and the hurling of shoes and stones at the Indian Ambassador. Soon after the success of the people’s movement, the Maoists had publicly proclaimed India as their principal supporter but the Indian diplomacy did not see any virtue in transforming this claim into a creative understanding, if not alliance. In its endeavour to keep the Maoists out of power, India has contributed significantly to political fragmentation and even weakening of the Madhesi groups that should otherwise be India’s natural constituency.

The problem with Indian diplomacy in Nepal has been its vulnerability to subjective considerations, personal egos and priority to the immediate over the enduring. Due to this weakness, Nehru’s vision of helping Nepal build an evolving and balanced democracy got degenerated into undue and excessive engagement, bordering on unethical interference. Even during the 1950s, Indian Ambassadors like C.P.N. Singh were extremely unpopular for their tendency to micro-manage Nepalese affairs. At times, driven by the strategic paranoia vis-ŕ-vis China and, at others, suffering from the imperial style of functioning, derived from the British heritage, Indian diplomacy has often erred on Nepali susceptibilities. The deviations like the “Gujral Doctrine” were rather short-lived to undo the damage of the years of callousness.

India may not be able to extricate itself from the image of an overbearing “big brother” if it fails to relate itself sincerely with the genuine popular aspirations in Nepal. In a radically transformed neighbourhood, India needs a serious diplomatic homework to protect and promote its critical national interests in challenging times.

The writer is Visiting Research Professor, ISAS, Singapore.

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Turban tales
by Roopinder Singh

IT was a nice party and we were all enjoying ourselves to celebrate the success of a friend. My friend introduced me to some young foreigners as "Osama’s brother".

The two couples were from South Africa, globe-trotters and well exposed to international travel and traditions. London figured in our conversation, too. For me it’s the place I visited first when I ventured away from the Indian shores. These couples had found work there, in the recession, mind you, which had a lot to say about their abilities.

"We see these greetings and I wish someone would explain them to us," said a young lady.

"Which greetings," I asked.

"You know, the way Muslim men embrace each other, or place their hand on their heart when they meet. What does it really mean?"

Here was I, resplendent in a black overcoat, wearing a nice tie and all, as well as a colour-coordinated turban, and they had decided that I was someone they could query about "Muslim" greetings. I wore a turban, as did their host, also a Sikh, yet somehow; they had made an intuitive (and wrong) leap about my religious denomination.

My mind went back to the time when we found it impossible to tell foreigners apart, unless the differences were very obvious, like skin colours, basic body structures, etc. "A gora is a gora, they all look alike," is a refrain all too common.

I took the confusion sportingly and proceeded to explain with more confidence than authority the differences in greetings, and also gently pointed out that they had more to do with culture than religion.

The idea that my turban had made me, in some sense, a target somehow niggled in my mind. Well, I had been there before and it wasn’t all that bad! Joel Baird was friendly towards me from the first time we met in New York.

"You are a Sikh. When I was a child, I was told that if I was in a bind, I should find a Sikh and run to him. He would help me," said this Columbia University student. Now Joel had studied in the American School, New Delhi, and had spent time in India. He and his charming wife were great hosts, and the New York memory brings a smile on my face, whenever it surfaces.

As does another one, of meeting an elderly person at a gas station while travelling on an American highway in the wee hours of the morning. "Sikhs are good people," he pronounced after seeing my turban. He had based his observation on his interaction with Sikhs while serving in the US Army.

However, 9/11 changed all that and turbans started being associated in many minds with Osama bin Laden. The finer distinctions of kinds and colours of turbans were lost and even someone like Hardeep Puri, Permanent Representative of India to the United Nations, recently faced undue attention from US airport security personnel because of his turban. So embarrassing, unfortunate and sad. Generalisations can be treacherously misleading, especially sweeping, negative ones. They can even cast a pall over an apparel of honour.

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OPED STATE FINANCES

West Bengal, Uttar Pradesh, Maharashtra and Punjab are among the highly indebted states. The politics of populism, freebies and irrational subsidies is often blamed for the indebtedness of states. A less-known fact is: the most indebted states get a poor share of the Central taxes and grants. Here is an analysis of the issue of debt:
Debt's the problem
Bikram Singh Virk

The debt burden of the states is constantly rising. According to a report compiled by the RBI on the budgets of all states for the fiscal year 2009-10 (Budgeted Estimates), the combined debt of all 30 states of India has reached Rs 14.5 lakh crore from Rs 4.9 lakh crore in 2001, a near three-fold increase in a decade.

Some of the states have a high debt-to-GSDP (Gross State Domestic Produce) ratio, which is still rising. The worst case is that of West Bengal, whose debt-to-GSDP ratio went up from 24.8 per cent in 1999-2000 to 40.6 in 2007-08 against the average ratio of all states, which rose from 19.5 per cent to 26.8 per cent during the same period.
Out of Rs. 1.86 lakh crore worth of Central taxes distributed to all states in 2009-10, more than one-third were given to just two states: UP (21.7 per cent) and Bihar (12.8 per cent). Punjab (1.4 per cent) and Haryana (1.03) were among the lowest recipients
Out of Rs. 1.86 lakh crore worth of Central taxes distributed to all states in 2009-10, more than one-third were given to just two states: UP (21.7 per cent) and Bihar (12.8 per cent). Punjab (1.4 per cent) and Haryana (1.03) were among the lowest recipients

Next comes Uttar Pradesh and Punjab with debt-GSDP ratios of 39.3 per cent and 38.2 per cent respectively. Though Punjab has managed to bring it down from 47.9 per cent in 2003-04, still the debt figure, which was Rs. Rs 63,277 crore in 09-10 is comparatively on the higher side considering the size and population of the state.

In absolute terms, UP and Maharashtra are the highly indebted states, whose debt burden in 2009-10 was nearly Rs. 1.67 lakh crore each, followed by West Bengal, Andhra Pradesh and Gujarat, each having an outstanding debt of more than Rs 1lakh crore.

The rising debt makes a dent in the revenue receipts of the states by taking a major chunk in the form of interest payments. All states paid 12.6 per cent of their cumulative revenue receipts as interest. West Bengal and Punjab paid 28 per cent and 22 per cent of their revenue receipts, respectively, by way of interest.

How Punjab has piled up its debt

Since its formation in 1966, Punjab had been a leading state of India in terms of per capita income and remained revenue surplus till 1983-84. Fuelled by the Green Revolution, the state enjoyed a high economic growth rate as compared to others, resulting in buoyancy in the revenue receipts of the state.

The first revenue deficit of Rs 9 crore was witnessed in 1984-85 when against the Total Revenue Receipts (TRR) of Rs. 932 crore, the Total Revenue Expenditure was Rs. 941 crore.

Militancy was raising its head during this period resulting in a massive jump in the revenue expenditure, which nearly doubled in three years to Rs. 1,184 crore in 1985-86 from Rs. 684 crore in 1982-83.

By 1990-91 the revenue deficit of the state had climbed to Rs 516 crore, being 24 per cent of the TRR and the state had an accumulated debt of Rs.7,904 crore, most of which was borrowed to foot the rising revenue expenditure on the security forces.

The trend continued and the revenue deficit rose to Rs. 742 crore in 1994-95 and soared four times in the next five years to Rs. 3,104 crore in 1999-2000 being 37 per cent of the TRR, which was the highest revenue deficit in the country.

The debt had jumped to Rs 27,830 crore against its GSDP of Rs. 74,700 crore and the debt GSDP ratio rose to 37 per cent, being the most unfavourable in India.

Due to increased interest payments on the piled-up debt, the committed expenditure on salaries, pensions and interest payments went up to 117 per cent of its TRR by 2000.

The revenue deficit and the debt rose to Rs. 3,391 crore and Rs. 44,982 crore respectively in 2004-05 and the debt-GSDP ratio rose to an all-time high at 46.54 per cent.

In 2009-10, the debt figure reached Rs. 63,277 crore and the revenue deficit, which in absolute terms rose to Rs. 6,554 crore but came down as a percentage of the TRR to 16.3 per cent in the wake of some improvement in revenue receipts of the state.

The debt, which has been rising at a double-digit rate for the last one decade, is projected to touch Rs 71,086 crore by the end of the current fiscal 2010-11, according to the budget estimates for the current year. — BS

Adding salaries and pensions, the other committed expenditure, very little is left for planned development, which is mostly funded by borrowings, resulting in a mounting debt and an impending debt trap.

Though the politics of populism, tax concessions to certain sections, freebies and irrational subsidies to garner votes are often debated as the root cause of the indebtedness of states and is also true to a great extent, the share from the Central taxes, grants and their distribution, if viewed closely, also holds the key.

Broadly, a state's revenue receipts comprise its own tax and non-tax revenue and the share from the Central taxes and grants. The comparative analysis of budgets of all the states reveals that some of them receive a heavy dose of Central funds in the form of share from the Central taxes and grants, which makes them revenue surplus, while others receive little of it and are revenue deficient.

Of the cumulative revenue receipts of Rs. 8.27 lakh crore in 2009-10, Rs. 4.69 lakh crore or 57 per cent was generated by the states from their own tax and non-tax sources and Rs 3.58 lakh crore or 43 per cent was received by them as a share from the Central taxes and grants.

Due to an uneven distribution of the Central funds some states were revenue surplus even though their own tax and non-tax receipts were negligible and 22 states had more than 30 per cent component of the Central funds in their total revenue receipts. Manipur, Mizoram and Nagaland were top on the list and 90 per cent of their revenue receipts comprised the share from the Central taxes and grants put together.

Arunachal Pradesh and Bihar received 87 per cent and 81 per cent of their total revenue receipts from these Central funds while their own tax and non-tax revenue was negligible at 13 per cent and 19 per cent respectively. In all 16 states had more than 50 per cent share of the Central funds in their total revenue receipts.

Some states, on the other hand, generated a substantial revenue from their own sources and received too little from the Centre. For the 2009-10 budget, Delhi topped the list having generated 85 per cent of the total revenue receipts from its own tax and non-tax sources followed by Punjab and Haryana, which mopped up 81 per cent each and got only 19 per cent from the Central funds. Goa, Karnataka, Tamil Nadu and Maharashtra were the other states generating 70 to 80 per cent of total revenue receipts from their own tax and non-tax sources.

If the share from the Central taxes and grants is segregated, out of Rs. 1.86 lakh crore worth of Central taxes distributed to all states in 2009-10, more than one-third were given to just two states: UP and Bihar, the former getting 21.7 per cent and the latter 12.8 per cent of the total.

Adding the share of Madhya Pradesh, Andhra Pradesh and Rajasthan, each got 6.5 per cent, 5.9 per cent and 5.2 per cent respectively, more than 50 per cent of the share from the Central taxes went to these five states and other 25 shared the rest. Punjab and Haryana were among the lowest recipients, each of whom got 1.4 per cent and 1.03, respectively.

The same is true in case of the grants. Out of the total grant figure of Rs 1.73 lakh crore distributed in 2009-10, UP and Maharashtra got 9 per cent each, followed by Andhra Pradesh and J&K, which received 7.7 per cent each. Counting the share of three other states -- Assam, Bihar and Madhya Pradesh, which got 6.6 per cent, 5.9 per cent and 5.2 per cent respectively, the combined allocation to these seven states crossed 50 per cent of the total grant and the balance was allocated to 23 states. Punjab again was one of the lowest recipients and got 1.19 per cent, even lower than Haryana, which got 1.31 per cent.

The Twelfth Finance Commission (TFC) gave 19.3 per cent or 1/5th of its total disbursement to UP alone. Five states — UP, Bihar, Andhra Pradesh, West Bengal and MP — got nearly 50 per cent share of all the Central taxes allocated by it. One of the lowest recipients, Punjab got only 1.3 per cent from the 12th commission.

Despite having good revenue receipts, Punjab's heavy debt can be partially explained by its revenue expenditure, broadly classified as developmental and non-developmental. The state spends more on the latter.

The cumulative expenditure of all states in 2009-10 on developmental activities was 59 per cent against 38 per cent on non-developmental ones and 3 per cent going by way of grants in aid. Chhattisgarh and Arunachal Pradesh were the leading states, spending nearly 75 per cent of their total expenditure on developmental activities. Even Bihar, 81 per cent of whose revenue receipts comprise the Central funds, spent 64 per cent of total expenditure on developmental activities.

Punjab's spending on developmental activities during the same period was 42 per cent while Haryana spent 69 per cent on this area, the rest being on non-developmental activities.

An analysis of the state budgets makes it evident that much similarity cannot be drawn among the debts of Punjab, West Bengal and Kerala as the last two states have much lower revenue receipts from their own sources.

Punjab can improve a lot if the allocation of the Central funds is somehow linked to the states' efficiency to generate revenue from their own sources. The vitality of Punjab and Haryana as food baskets of the nation is least reflected from the central financial allocations to these states as these neither appear linked to productivity nor to financial efficiency but to certain other factors, better known to the policymakers.

In the given circumstances, Punjab, which comparatively has a better revenue collection from its own sources than many other states, can manage its debt by further augmenting its revenues by plugging the leakages on the one hand and curtailing the non-developmental expenditure on the other.

The Central planners also need to review their funding policies favouring the efficient states whose contribution to national productivity is higher. Both Punjab and Haryana, on which the country is dependent for food security, need special attention while allocating the Central funds in the interests of the nation.

The writer is an Associate Professor, PG Department of Commerce, NJSA Government College, Kapurthala (Punjab)

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