AAP’s trade agenda

Punjab’s industrial revival has been tried many times in the past, though without much success. The scene is rather bleak and dismal despite Sukhbir Badal extracting Rs 1.15 lakh crore investment commitments at the hyped Punjab Investor Summit in December 2015. Investors do not return except to pick some cheap plot. In its manifesto AAP is more protectionist and populist than its rivals. Sukhbir Badal wooed Chinese investment in high-end bicycles for a hub proposed in Ludhiana. AAP’s focus is on local manufacturing and on saving it from competition. Industries unfit to survive in a competitive world will not be allowed to sink. AAP promises to nurse them back to health with subsidies, throwing good money after bad. The state’s role has now largely been accepted as that of a facilitator. AAP hopes to revive practices of the good old socialist era. It may sound bad for the depleted treasury, but is good news for the owners of sick industrial units.

An AAP government would be liberal in sacrificing revenue — two-year tax holiday, power subsidy to industry, one-time settlement for tax cases, 10-year tax holiday for agro-processing industries, five-year tax holiday for women entrepreneurs and tax incentives to hotels. But it would be bad in revenue mop-up. That Punjab’s finances are over-stretched is known. AAP has not explained how it will fund its well-meaning proposals unless it does not mean to.

Disregarding corporate opposition, AAP promises to renegotiate power agreements signed with private companies which bleed the state power utilities and deliver costlier-than-market power to industries. It would be a bold attempt to undo a wrong. AAP leaders are known to say outrageous things like putting this or that leader in jail. To look believable, they could snatch back transport licences from politicians and hand them over to the handicapped, unemployed and ex-servicemen. Since Akali and Congress politicians have a finger in every business pie, AAP’s young Turks could be trusted to play the game spoiler. This aggressive stance may have mass appeal but is fraught with legal wrangles. AAP promises to be a menace to established politicians’ business interests all over. That may be a reason it is so viciously targeted.