Punjab stares at Iran war-induced price shock

A FARMER in Tarn Taran or Rohtak or a migrant worker from Bihar or UP would never have thought that US President Donald Trump's military "excursion" in Iran would one day impact his life so deeply and threaten his cost of living. Yet this is the stark reality he has to cope with. Even if Israel and the US stop dropping bombs on Iran, the situation could worsen if, after the state elections, oil prices are raised.The Trump mission has disrupted the global economy and the heat is felt all over India, no matter how hard the government tries to paper over the economic damage. The closure of the Strait of Hormuz has caused turbulence in oil and gas markets worldwide, leading to soaring inflation and food and fertiliser shortages.The spectre of hunger looms. The crisis is not confined to the scramble for gas cylinders or long queues at petrol stations in one city or region, official assurances of sufficient supplies notwithstanding. The larger threat is of countrywide economic slowdown, loss of work opportunities and shrinkage of incomes.Ruling politicians in Punjab, Haryana and at the Centre are investing more of their time and energy in managing headlines than checking hoarding and profiteering, maintaining the supply chains and working out plans to rescue agriculture and industry in particular from the global fuel price onslaught.India's ill-thought-out abandonment of its traditional well-wishers, Iran and Russia, and siding with the attackers, the US and Israel, have made matters worse.The country is paying higher prices for not just importing oil and gas but also fertilisers, particularly the nitrogen-based urea, which is produced with imported natural gas. There is a likelihood of 30% decline in urea production. India is the world's second largest importer of fertilisers after China. Any cut in supplies means lower farm production and lower farmer incomes.Many in Punjab and Haryana, the country's food baskets, may face survival issues. Debt repayments may become more difficult and cause more stress. The migrant labour's outflow due to the unavailability of cooking gas cylinders, if not checked effectively, could escalate and affect wheat harvest and paddy transplantation operations in both states. Fertiliser shortages would result in under-production of cereals, making food prices spiral.This will particularly spell trouble for families living beyond the reach of welfare benefits. The government's food and fertiliser subsidy bills are set to balloon. Coupled with revenue loss due to slowing economic growth, this will result in a squeeze on welfare and infrastructure spending. Middle-class incomes will stagnate or decline. Employment opportunities for daily and contractual labour, already lessening due to a clever tweak in the rozgar yojna, will become harder to find.Foreign institutional investors are pulling out of the stock and commodity markets, which has led to the rupee touching new lows, which in turn makes imports, travel and education abroad more expensive. As living standards take a hit, income disparities and social anxieties will increase, which can be deeply troubling for peace.The scary global and national scenario doesn't augur well for the predominantly agricultural states of Punjab and Haryana which are vulnerable to price shocks. Being a BJP-ruled state, Haryana may get some aid from the Centre and cope well, but Punjab will be left to fend for itself. BJP leaders in Punjab selectively pick up issues to target the Bhagwant Mann government but skip those which require the Centre's attention.The latest budget reveals that Punjab's growth rate at 6.1% is below the national average. If the economy keeps floundering, the state's fiscal stress could deteriorate. If the West Asian conflict drags on, many of the promised Rs 55,000 crore investment proposals made at the recent investor summit may remain on paper.Punjab's exports of premium basmati rice and sports goods mostly pass through the Strait of Hormuz and consignments of some 60 lakh tonnes of basmati are stuck at ports. With insurance and shipping rates skyrocketing, there is a possibility of an estimated 50% decline in exports. Exporting textile and engineering enterprises are in dire straits due to delays in payments. Harried exporters want the Centre to urgently introduce the barter system of payments — basmati rice for crude oil.Unsurprisingly, the magnitude of the critical situation has not shaken politicians of all colours in Punjab out of their slumber. Nurtured in opportunism and short-term electoral wins, they continue with their daily routine of politicking, blissfully oblivious to the gathering dark clouds.It is during a crisis that the worth of a leader is judged. When Punjab had floods last year, BJP ministers visited some affected areas, gave assurances and over time, forgot everything. The Prime Minister's promised Rs 1,600 crore relief is still awaited. Now another crisis is in the making and BJP leaders in Punjab are running away from it. Few have cared to reach out to exporters in their hour of need.The problem is the BJP leadership in Delhi does not seem to take them seriously or invite their opinion on any issue. Punjab occupies a place somewhere near the bottom in the list of its priorities. BJP politicians, therefore, spend their time in other ways to stay in the media limelight. They choose to respond vociferously to the political demotion of an actress's husband. They allow themselves to explode over a blast outside their Chandigarh office, holding the Punjab government responsible and forgetting in the process that the blame for any disruption of peace in the union territory lies with their own Home Minister.As for the Aam Aadmi Party, the Congress and the Shiromani Akali Dal, there is hardly a leader of substance whose intervention on behalf of farmers and exporters can extract any meaningful response from the Centre.Responsibility, therefore, lies squarely with the BJP leadership's favourites like Hardeep Puri, Ravneet Singh Bittu, Taranjit Singh Sandhu and the latest catch, advocate HS Phoolka, to persuade the Prime Minister to try to look beyond the West Bengal elections and spare a thought for Punjab and at least try to get what is Punjab's legitimate due.

Punjab stares at Iran war-induced price shock

Unsurprisingly, the magnitude of the critical situation has not shaken politicians of all colours in the state out of their slumber.

Nirmal Sandhu

Punjab stares at Iran war-induced price shock

Unsurprisingly, the magnitude of the critical situation has not shaken politicians of all colours in the state out of their slumber.

Nirmal Sandhu

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