How Punjab economy can be revived

Joginder Singh

Prosperity of Punjab in relation to the rest of the country is eroding at a rapid rate. It is obvious from the decelerating position of the state, slowing and stagnation of growth rates of various sectors, growing unemployment and discontentment among people and unabated farmers' suicides. In terms of per capita income, Punjab ranked at number four in 2000, but in 2015-16, it slid to number 16 among the states and UTs. It requires serious introspection as to where we are lacking and what should be done to rectify the situation. Each sector and sub-sector needs to be revisited in terms of performance and the plugging in of dark areas is required.

Agricultural sector: The world over, experience has shown that the agricultural sector cannot sustain growth in the long run. It cannot even hold on a large chunk of the population for employment. A majority of the youth should be withdrawn for employment in other sectors. This would not have any adverse impact on the farm sector output. The Green Revolution has turned almost pale, with no potential technology in sight. After attaining exemplary progress till the end of the last century, the growth rate in the agricultural sector in Punjab declined to 1.7 per cent in the Twelfth Five Year Plan period compared to 3.5 per cent of the national growth rate. It indicates that the other states are promising higher growth in the farm sector. The fact is that the average productivity per annum in rice-wheat rotation in Punjab has already touched 10 t/ha and in some areas even crossed this level, which is favourably comparable with the best in the world. Obviously, a further increase would be an arduous task. Crop diversification and value addition are not feasible until alternative crops are not made at least equitably profitable through market stabilisation policies. 

However, based on the data of the cultivation cost of major crops, it can be inferred that fertilisers and machinery account for nearly 57 per cent of the total operational costs in the case of wheat and 30 per cent in rice. Some farmers indiscriminately use agro-chemicals. Systematic soil fertility gradients need to be prepared for each village to render them suitable spot guidance so as to minimise the cost of fertilisers and improve their use efficiency. 

Another significant cost is on farm machinery. The state with 10 lakh operational (mostly small) farms having more than five lakh tractors, plus various attachments, puts an unbearably extra pressure on the farm economy. The cost of cultivation estimates use the imputed cost of machinery rather than the cost to the owner-operator and should also account for depreciation and interest on such heavy investments. A soft and liberalised loaning policy, along with subsequent failures of cotton crop, was the sole reason for the mounting indebtedness. This resulted in sales of tractors in the second-hand markets in the Malwa belt. No doubt, machinery is necessary, more so under monoculture agriculture, but custom-hiring services to small farmers through cooperative societies needs to be systematised and encouraged to lower the cost.

Dairy is an important sub-sector of agriculture which is complementary to crop farming. But apart from its various other issues that are required to be improved, the sale of synthetic milk and milk products to the consumers is an unethical and cruel practice. It must be curbed with strong hands to make dairy a profitable proposition. A nestle-type set-up, with feeding villages having commercial and scientific dairy units directly channelising supply of milk to export-oriented milk processing plant, is the need of hour. 

The extension system of the state needs to be revamped. Rather than catering to the age-old agronomic practices about which the farmer is aware, extension workers should be made accountable and associated with self-help groups of farmers to render guidance on value addition, market information, identifying potential markets and salesmanship of farm output, particularly perishables such as fruits, vegetables, meat, milk, eggs. 

Agro-industrial sector: Punjab was a hub of various industries, such as cycle, sewing machines, hand tools, hosiery, sports goods, farm machinery and implements. The importance of the industrial sector, beyond generating income, should be regarded as providing gainful employment to people migrating out of agriculture. With monoculture and the limited scope of crop diversification, the value addition has been much below expectation and the state is lacking in its quest for export. The unique example of kinnow may be cited here. There is no dearth of production, but how much success have we achieved in value addition to improve its shelf life and processing into citrus juice? During the Eleventh and Twelfth Five Year Plans, growth of the manufacturing sector in Punjab was 7.65 per cent and 4.45 per cent, much lower than the national growth of 8.10 per cent and 6 per cent, respectively. Sops to the industry, provided by competing states have siphoned out this hope too. A conductive atmosphere is needed for this. 

Service sector: Depending upon the nature of the sector and quickness of its outcome, the service sector, perhaps, is of the highest importance. The growth rate in services such as banking, insurance, trade, transport and communication, real estate and construction, IT, tourism, social and personnel in the country has been 8.58 per cent during the Twelfth Plan period while the comparable growth in Punjab was just 7.46 per cent. 

The location of the state is the foothills with some pleasant seasons. There are limited spots of attraction of tourists, such as Golden Temple, Wagah border and Anadpur Sahib. Punjab, being a state of rivers, can develop beautiful spots on riversides, with boating and other recreational facilities. Beautiful plantations on the riversides and road and rail tracks could further its attraction.   

Punjab has a vast unexploited potential of growth, but it needs a balanced approach. It started with agriculture and overlooked other sectors. Now allout efforts are being made on roads, bridges and bypasses. There is need to improve governance, encourage the industrial sector and improve the education system to put the state on the right path again.