In Punjab, the ruling Shiromani Akali Dal’s need to keep voters happy in the countdown to elections, after a two-term incumbency, is coming up against the harsh reality of the state’s empty coffers. Broke after years of reckless spending, Punjab is struggling to pay salaries and pensions to government employees, but it cannot seem to break the habit. In recent days, the SAD government has wilfully ignored the parlous condition of the state’s finances to make a series of announcements that added about Rs 850 crore to the annual expenditure in one fell swoop. These include over a lakh new jobs in government, doubling of pensions to senior citizens and widows and the introduction of a free pilgrimage scheme for Hindus and Sikhs. Last week, the government announced the setting up of the state’s Sixth Pay Commission, although Punjab government employees are already the best paid in the country. The SAD also plans once again to resume the distribution of subsidised dal, the more expensive half of its atta-dal scheme, and therefore implemented in a start-stop manner since it was introduced.
Revenue collection has hardly kept up with the spending spree, and is well short of this year’s 15 per cent target. Since 2013, a year after the SAD-BJP combine won a second term, the Punjab government has been mortgaging its public assets to raise money, including, most recently, a historical widows’ home in Jalandhar and jails in Bathinda and Amritsar. The government’s extravagance makes no economic sense, especially when, at the same time, Chief Minister Parkash Singh Badal writes to the prime minister asking for a loan waiver to the state’s farmers, lamenting that the country’s main food grower has been reduced to a “beggar”.
The state has, meanwhile, paid scant attention to the need to take meaningful steps to improve the economy. Punjab’s annual average growth in 2014-15 fell to an estimated 5.35 per cent from a high of 10.18 per cent in 2006-07. Almost all sectors, including agriculture, the mainstay of the state’s economy, and the manufacturing industry, are in decline. But the government, despite the opportunity of two successive terms in office, has not shown any inclination to make the required policy changes. There has been virtually no job creation. The high unemployment rates — 7.7 per cent among rural youth and 6.3 per cent among urban youth — have only added to the discontent of farm distress, creating a situation that radical Sikh organisations are trying to exploit. The government that comes in after the next election will face an empty treasury. Political parties must instantly start chalking up a clear plan to restore Punjab’s economic health, so that whoever is elected can get down to business without losing any time.
Source: New feed
