Montek’s prescription

The expert group headed by Montek Singh Ahluwalia, set up to suggest a post-Covid economic strategy for Punjab, has done some plain-speaking. The group has suggested a series of austerity measures for the cash-strapped state which are likely to have wide-ranging ramifications at a time when people are already reeling under the effect of the pandemic and the lockdown. It has been suggested that Punjab do away with free power for the agriculture sector as it benefits only the big farmers and that its untargeted nature has prevented it from achieving what was intended — alleviate the distress of small and marginal farmers.

Paddy is a water-guzzling crop and its cultivation was being blamed for the decline in water table. It has been suggested that Punjab have a look at the Haryana model that is providing cash incentives in districts where water has been overexploited to diversify and reduce procurement of paddy from critical areas, steps that could also help in checking the problem of stubble burning. Free power meant an annual burden of around Rs 6,500 crore. This money could be used to fund loan waiver, create infrastructure and implement schemes related to education and health, both priority sectors in the post-Covid period.

Studies have pointed out that over 80 per cent of the beneficiaries of free power have been medium and large farmers while the rest were small farmers, the section among which rural indebtedness and suicides prevail. Of the over 14 lakh agricultural tubewells that benefited from the plan, only around one-fifth were with small farmers. So, the priority has to be set right. But how it will be done is what matters. Punjab will have to go for crop diversification carefully. It lost out on industrialisation in the recent past. It is for the Centre to ensure that cultivation of crops is broad-based on the basis of demand and remunerative prices to ensure food security. Pay cuts and deferring salaries can only be short-term measures for the fixed income group. The government should reconcile conflicting interests in its decision-making process.