There is chaos all around national capital Delhi for the past three months, the ongoing farmers’ protests being the centre of it all. Not only have these so-called ‘farmers’ made the situation worse in the national capital, but have also contributed to the losses amounting to more than 70 thousand crores. Most of these farmers are from Punjab, which is setting the worst example for all the farmers in India. So, how is Punjab setting a bad precedent for all farmers? Let’s explore.
The GST collection data for FY20 has generated much debate around the country, given the abysmally low tax collection in a few states and very high collection from a few others. While Punjab – one of the richest states of the country, contributed only 15,000 crore rupees to the total GST collection, Bihar – one of the poorest states of the country, contributed more than 12,000 crore rupees.
Ideally, the GST collections from Punjab should have been much higher than Bihar, given the fact that the purchase on which GST is imposed – goods consumed by high-end consumers – are sold more in the state. Bihar, whose GDP is only 6.12 lakh crore rupees, contributed almost similar amount despite having per capita income 3 times less than that of Punjab. And, it wouldn’t be surprising if poor states like Bihar overtake Punjab only in a few years.
Talking about the economy of Punjab, it is a complete mess – all thanks to a decade-long incompetent administration. The law and order in the state are worst, with the majority of the traders involved in the illegal sale of goods and services without paying direct or indirect taxes.
Farmers – the backbone of Punjab’s economy, are mere landowners in the state. The majority of the labourers who work on the fields of Punjab are migrants from Bihar, Jharkhand, and Uttar Pradesh. This seems the reason why such a large number of farmers are gathered on the Delhi border for such a long-time — because they do not have the responsibility of farming back home. The farmers of the state have no emotional attachment to their soil. They chose to farm because they can earn easily without doing much work.
Moreover, the farmers of the state have little to no respect for the law of the land or environment. As per a report by Times of India, Punjab has around 46 per cent of the money allocated by the Union government to curb the crop residue burning. However, instead of a decline, the state actually witnessed a rise of 17 per cent in stubble burning. The state was allocated around 800 crore rupees to resolve the grave issue, but much success couldn’t be achieved.
Ideally, groundwater should be available at a depth of 50-60 feet in a state like Punjab. But guess how much one needs to dig to install a tube well in the state? 200-300 ft! And why so? Because in Punjab, groundwater is used indiscriminately to cultivate paddy which is a crop not natural to the western part of the country.
The state also consumes large amounts of urea – a highly subsidised fertiliser and it was among the last states to adopt neem-coated urea. Moreover, the urea purchased by most farmers in Punjab is actually sold to corporates and also smuggled to neighbouring nations because the rate of urea in India is very low.
A large section of the farmers in Punjab has fallen prey to freebies with huge agricultural subsidies going to the state. Out of more than 3 lakh crore rupees of agricultural subsidies allocated by the union government, more than 20 per cent goes to Punjabi farmers even though the state accounts for just 2 per cent of the country’s farmers. In addition to that, the state government also provides various kinds of subsidies, including power and procurement to the farmers from the taxes collected from industry and the service sectors.
In the last few decades, the economy of Punjab has witnessed very little growth, when compared to states like Gujarat, MP, Tamil Nadu or even Haryana.
Until the 1990s, Punjab was miles ahead of other Indian states in terms of its per capita income — thanks to the ‘Green Revolution’ of the late 1960s. However, as India transformed from a primarily agrarian economy to service and industry-based economy after the reforms of 1991, Punjab was left far behind.
As per the graph above by economists Shamika Ravi and Mudit Kapoor, the economic growth in Punjab in the last few decades has been so low that it has been left far behind by many states in India, in terms of per capita income. Today per capita income in Haryana is 1.5 times more than that of Punjab. The state is now far behind in all the three sectors- agriculture, industry, and services.
The political economy of Punjab is sinking, the social services are in the dire condition, and industries are leaving. Even the farmers of the state are demanding more subsidies instead of a complete overhaul of the politics and the political economy of the state. In such a scenario, Punjab is setting the worst example for all farmers of the country.
