Financial Express, April 11, 2013

Rebuilding Punjab

 The state of Punjab in India represents an important case study of development gone awry. Partition in 1947, which wreaked havoc on the region, was followed by surprisingly rapid recovery and progress. An infrastructure of roads and market towns was created in the 1950s, followed by the Green Revolution of the 1960s, which saw Punjab become the breadbasket of India. Punjab became the richest state in India, measured by per capita income.

More recently, Punjab’s growth has lagged the rest of India, and it has slipped down the league table of states. This is not worrisome in itself, since the state’s growth has not stopped, and it remains one of India’s better-off states. The bigger worry is looming ecological disaster that will harm Punjab irretrievably, and with it, the whole nation of India.

Last month, Inderjit N Kaur and I organised a conference on rebuilding Punjab at UC Santa Cruz. Participants such as Rajinder Sidhu of Punjab Agricultural University emphasised the criticality of the groundwater situation in Punjab, with rapidly falling water tables, and the distortionary policies, such as free power for farmers, that have accelerated the problem. Upmanu Lall of Columbia University noted that drinking water pollution has also become alarming, so a health disaster will accompany the desertification that comes with groundwater depletion. Lakhwinder Singh of Punjabi University discussed a range of issues, including poor governance, falling investment, monopolistic middlemen, poor educational outcomes, and lack of adequate modern infrastructure, with many of these points coming out in presentations by Dr Sidhu as well.

Pritam Singh of Oxford-Brookes University and Jugdep Chima of Hiram College brought out the complexities of interactions among economics, politics and society, and there was often agreement that state-level politicians have been failing on the job. Poor revenue effort, high fiscal deficits and corruption have been taking their toll on the economy. There were mixed views on the legacy of the militancy and repression of the 1980s and 1990s, which still looms large in many lives. In a separate analysis, Swaminathan Aiyar has dismissed this history as an excuse or explanation for the current crisis of Punjab, preferring to focus on the more recent failings of state governance, but perhaps the two are connected. At the conference, Pritam Singh argued that the lack of an effective opposition party in Punjab has hampered the workings of normal politics as a mechanism for responding to constituent needs and wants.

It is certainly plausible to argue that the political economy of the Green Revolution model has trapped Punjab in an unsustainable and undesirable equilibrium of depleting its natural resources and neglecting its human resources, to keep growing grain for the country’s public distribution system. The seeds of the Punjab crisis, which included issues of water needs amplified by adoption of new varieties and cropping patterns of wheat and rice, perhaps were sown along with the technological innovations of the 1960s.

Swaminathan Aiyar, in his work that emphasises economic freedom and a reform agenda firmly rooted in allowing more room for markets to flourish, pushes for fiscal consolidation and a better environment for doing business. On the other hand, some of the perspectives at the conference emphasised the role of the government in providing the infrastructure and complementary inputs for private sector success. Aiyar notes the distortions of markets in the current Punjab economic system, but perhaps not enough the crisis of drug use and similar problems of societal values. One only has to look at the US to see that economic growth does not automatically translate into a society with greater general well-being.

One of the goals of the conference was to examine the larger, more global, cultural, societal and historical factors that feed into the current state of Punjab’s economy and polity. Pashaura Singh of UC Riverside, Gurinder Mann of UC Santa Barbara, Harpreet Singh of Harvard, Van Dusenbery of Hamline, Supreet Kaur of Columbia, and Inderjit Kaur of UC Santa Cruz discussed various aspects of these factors, and the role of the Sikh diaspora, in particular received some attention. How one creates a social vision, aligns the interests of the leaders and the led, and creates space and momentum for change were all questions that were raised, if not fully answered.

Answers are urgently needed, though. The sense of the conference discussions was that there is no more scope for muddling through—Punjab has to go up or else it will go way down. This is a small state in India, one that often gets lost in the shuffle of national policymaking, but the repercussions of a collapse of Punjab’s economy will have huge implications for India. Already, it is clear that the national food policy is inefficient and even destructive. It should be clear that changing that policy will benefit energy and water security as well. The national government should be making the Punjab economy a national priority.