Issue 42 Vol II, June 30, 2007

A N A L Y S I S

Budgeting for a Vibrant Punjab
A yawning gap between hopes and expectations
Gobind Thukral

EVER since Manpreet Singh Badal became Punjab’s finance minister, he has been telling anyone who cared to listen to him. Punjab is a laggard state; its finances are in bad shape, industrial growth poor and its farmers suffering untold miseries. And at top its burgeoning bureaucracy sluggish. ”The tragedy of this state is that it has lagged behind others. We are acutely aware of the problems of the state and its industry. We are now ranked as one of the slowest growing states in the country,” the minister lamented on June 16.

Look back to 1966 when the division of Punjab took place and Haryana was born and how the two parts now compare. Green Revolution was yet to take shape, but Punjab was one up. Sadly no longer now. Haryana has a faster rate of growth in industry, trade and farming. It’s spending on sensible welfare far ahead. And don’t forget, it had a large doze of mismanagement and political instability and violence, an off shoot from Punjab. This makes Manpreet doubly sad; a neighbour always tells your place. “I am definitely embarrassed. Punjab's plan outlay is less than that of Haryana for the first time. It should have been Rs.15, 000 crore. It is only Rs.5, 100 crore," Manpreet declared a few days before his budget. The Britain-educated finance minister, regarded as one of the most forward-looking ministers in uncle Parkash Singh Badal's government is not wrong.

Let us look at his budget a little closely. Total revenue of nearly 29,900 crore is a huge amount and a deficit of 570 crore looks small.  Manpreet has tried to add Rs 460 crore by way enhanced taxes on land use, royalty on sand, gravel and boulders etc. Where does this money go? We are told 76 per cent goes into salaries, pensions and other benefits to employees. And that is a double tragedy. At one level you have a huge force of employees and at another level, majority of them would not like to work unless their palms are greased. Our political class, both the Congress and the Akalis including BJP have stopped governing. Their faith in populism and doles is immense and they believe that this brings votes and political power. This is what matters. It may please the Akalis to blame the Congress for the poor state of affairs, but they can look at their own record of the previous five years.

Let us look at how the budget deals with infra structure which can boost industrial growth; ten times of the last year as Manpreet wants. Punjab needs sufficient and quality power. It needs good roads, an efficient communication and transport system and somewhat more efficient and less corrupt bureaucracy. It is good to note that share of agriculture  is  up by 47 per cent, irrigation 22 per cent, health by 40 per cent , roads 66 per cent and  education 55 per cent. Power also gets 15 per cent more. We are promised full power availability in three years. How would that happen? Look at the state of electricity board. Its accumulated loss at the end of current financial year is Rs 6,279 crore. During the 11th Five-Year Plan ending in 2011-12, the estimated accumulated loss of the board will be Rs 14,732.79 crore.  And the total loss of the board by the end of 11th plan will be Rs 21,000 crore. The budget spelt no plan to set this rate. This time, those who are paying their electricity bills shall pay and others get free power. What logic is that? And it is not helping the farmers who want remunerative prices and not freebies.

And as Manpreet understands the seriousness of agrarian crisis, he ought to have focused to change the present high cost farming. What we have is Rs 100 crore to diversify the farming. Same as Congress, Farmers are ready to grow anything that brings them money and if they have to throw vegetables and fruit on the streets, why should they grow. How about organic farming that can cut extra cost and save water and other resources. Punjab urgently needs a clear specific plan to safeguard water, harvest rainwater and refresh ground water if agriculture is to sustain.

Sadly the young Badal has fallen prey to old official line. Market forces are arraigned against the farmers and the state ought to effectively intervene. Cooperative marketing is one way and another is that state helps farmers store their wheat and paddy, sell at premium in other states. It has several corporations to do the job. Bring innovative schemes. Can the minister save the public from harassment, wastage of time and petrol by getting rid of toll taxes at road junction? Can we not cut huge overheads in departments like PWD and Public Health?

And how about those sluggish corporations and other good for nothing departments, adding to losses each day? When shall we get rid of these? Will this tokenism of cutting Rs 1,000 per month from the salaries of ministers and officers help? Why not get rid of those 16 parliamentary secretaries that Akalis never stopped criticizing.

Raising new resources is not impossible, though difficult. One sure way is to make the tax collection more efficient and less painful. Punjab does not collect even 25 per cent of the taxes that are due. There is a huge leakage. This government can add another Rupees ten thousand crores to its kitty every year. Yet given the nature of this coalition government and the political class now ruling, it looks impossible.

By way of an example look at this proposal submitted three years ago. There is a law, Punjab Registration of Commercial Establishments. It has not been properly implemented. There is almost no charge on registration. It was proposed that each shop with ten or more employees should pay some fee. It is between Rs 750 and1500 in Himachal and in between 5000 and Rs 10,000 in Haryana for a three year period. These two states implemented the proposal, but traders lobby that finally ditched the Congress got this scuttled.  Government is offering various services and gets nothing in return. It can collect at least Rs 1,000 crore. It could also look after the welfare of employees of these commercial establishments.

Another proposal pushed by officers in Punjab was to create a welfare funds for the benefit of the workers/ employees. The employers were to contribute Rs ten and employees Rs five per month, collected half yearly. This fund could be used like in Haryana for welfare and development activities. There are always ways and means to do provided one pushes hard.

The Budget demonstrates no clear way. How Haryana and Himachal with a smaller tax base can collect higher revenue than Punjab. It all comes to political will and good governance. As yet there are no signs for that.

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Knighthood for Salman Rushdie, Provocation for Muslims
Dr. Sawraj Singh

Awarding knighthood to Salman Rushdie seems to be a deliberate provocation for the Muslims. This action appears to be part of an effort to increase tension and confrontation between the west and Islam. Prime Minister Tony Blair may be doing his last service for President Bush. Mr. Blair supported Mr. Bush for invading Afghanistan and Iraq, openly supporting Israel against the Arabs, dividing and weakening the European Union, inciting the Lebanese army to attack the Islamists, and encouraging divisions and a civil war between Fatah and Hamas. Mr. Bush is so pleased with Mr. Blair’s performance that he trusts him to be his mideast envoy.

Out of all of the favors Prime Minister Blair has done to support President Bush’s agenda of lining up the western countries against Islam, awarding knighthood to Salman Rushdie is so blatant that even a faithful ally such as the Pakistan government had to call the British Ambassador to Pakistan to express strong criticism of this move. The Pakistan government used very harsh language to condemn this act. It said that such a move will only help the terrorists who will now have an easy time to convince the Muslims that the west is against them and to punish those who attack their religion is a legitimate act.

As expected, Iran also strongly condemned the British act. It was Iran who imposed Fatwa on Salman Rushdie after he wrote the book Satanic Verses. No one will disagree over the fact that writers should have the freedom to express their ideas and they should be rewarded. However, in this situation, awarding knighthood appears more to be a political move rather than a genuine appreciation of a writer. Writers should also be very careful about hurting people’s religious sentiments. One gets the impression that they can quickly become a famous writer in the western world if he or she attacks Islam.

The fundamental question is that are Mr. Bush and Mr. Blair doing a service to the west or the world by increasing confrontation between the west and Islam? The outcomes of the wars in Iraq, Afghanistan, Lebanon, and Palestine show that the Islamists are winning in every situation. In Iraq, the secular Baathist party Saddam Hussein has been thrown out and both the Sunni and the Shia radicals have gained ground. In Afghanistan, President Karzai’s government continues to lose influence to the Taliban, and the Taliban seem poised to win back the power. In Lebanon, Hezbollah has emerged as the strongest force. In Palestine, the secular Fatah lost to the radical Hamas in the Gaza strip.

Many Muslims are going to perceive the award to Salman Rushdie as a deliberate provocation and an attack on their religion. This will further influence their sentiments and fulfill the prophecies of Samuel Huntington’s The Clash of Civilizations.

The interests of the people of the world, including those of the western countries, are not served by the clash of civilizations. What the world needs is a confluence of the civilizations. The European Union, with its 490 million population and the GDP bigger than the US, has become the largest economic entity of the west. It urgently needs the work force to keep its economy running. Most of the new immigrants are coming from the Muslim countries of Northern Africa, which is the closest region to Europe. Contrary to the rightist zealot Nicolas Sarkozy’s (the French President) views, Europe needs an unlimited supply of immigrants, most of whom will come from the Islamic countries, in order to maintain its economy. Provoking the Muslims does not appear to be a smart move. Let different cultures flourish and let us give up the concept of a melting pot and stick to a mosaic.

[Sawraj Singh, MD F.I.C.S. is Chairman, Washington State Network for Human Rights and lives in Ellensburg, WA 98926 USA]

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