Punjab: Trapped In Its Farms
For any industrialist looking to set up base in Punjab, it makes more economic sense to cross the state border and set up a factory in Himachal Pradesh or Jammu and then access the large demographic market and road infrastructure of Punjab.
Even neighbouring Haryana has been able to capitalise on its proximity to the national capital.
While it’s raining mega infrastructure projects all across the country, Punjab is quietly waiting for its first ever expressway promised over a decade ago.
The expressway was supposed to connect Pathankot on the northern edge of Punjab to Ajmer in Rajasthan, from where it would join an existing highway leading to the Kandla Port in Gujarat – the nearest sea port to Punjab. As envisaged, it was supposed to boost exports from the northern states of Punjab, Himachal Pradesh, Jammu and Kashmir and Haryana and usher in industrialisation in the predominantly agriculture-based economy of these states. The proposed expressway has a total length of over 600 kilometres (kms) and runs through three states – Punjab, Haryana and Rajasthan. Of the total length, 340 kms was to fall in Punjab and the rest in the other two states. Apart from its economic benefits, the expressway was also meant to provide quicker access to sensitive border areas along Punjab’s long international border with Pakistan.
So far all of it exists only on paper.
The expressway was first promised by the Shiromani Akali Dal (SAD) and Bhararitya Janata Party (BJP) government in Punjab in 2007 in the run up to the assembly elections that year. The SAD-BJP won the elections by a majority, taking 67 out of the 116 seats in the state assembly over Congress’ 44 seats. Shortly afterwards, it was announced that the ambitious eight-lane expressway had been cleared at a budget of Rs 8,630 crore, with Reliance Energy coming forward to complete the highway by 2011. It was reported that the Reliance Group had deposited Rs 21.58 crore as bank guarantee for the project. Nothing was ever heard of the project after that.
The Border Curse
The process of nation formation in much of the colonial world was far from smooth, with the fates of millions often decided by arbitrary strokes of a colonial administrator’s pen. An obvious fallout of such an abrupt process of state formation has been the creation of border pockets separated from their cultural centres and undergoing a gradual process of assimilation with a newly-created national ‘core’. All over the post-colonial world, border regions suffer the fate of being relegated to the periphery of the national imagination, coming into news only in the event of a military skirmish or cross-border infiltration bids. It should come as no surprise then that India’s border states are also the ones facing the largest economic, social and developmental challenges.
A gradual shift in India’s foreign policy towards a “Look East” paradigm over the last decade has led to a realisation of the untapped economic potential in the east. Along India’s eastern border, two critical projects are currently under way at full swing to boost trade connectivity with India’s south-eastern neighbours. These are the Kaladan Multi-Modal Transit Transport System (MMTTS ) and the India-Myanmar-Thailand trilateral highway. The Kaladan MMTTS is a transport system that uses road, sea and river-based navigation to connect Kolkata in India to Sittwe, Myanmar and then back to Mizoram in India. The project has further spawned a number of development projects such as the Sittwe Special Economic Zone being developed by India in Myanmar and the Sittwe-Gaya gas pipeline to transport natural gas from Sittwe in Myanmar through Mizoram, Assam, and West Bengal to Gaya in Bihar.
At the same time, the India-Myanmar-Thailand (IMT) trilateral highway has received widespread attention, not least due to the prospect of being able to drive down from Delhi to Bangkok offering the promise of the ultimate road trip to hopeful adventurers. Construction has already begun on the IMT highway and the BJP-led government at the centre is even considering extending the highway deeper into South East Asia to Laos, Cambodia and Vietnam.
In contrast, the north-western border tells a tale of utter neglect. More than a decade after it was announced, no work has been done on the Pathankot-Ajmer Expressway. In the run up to the 2017 assembly elections, the issue was brought back from the dead and a flurry of media reports followed announcing the approval, once again, of the project, this time rechristened as the Jalandhar-Ajmer Expressway. One year later, with a Congress government now in power in the state, nothing much has happened on the project. Even the alignment hasn’t been agreed to.
The expressway is critical to Punjab as cross-border trade with India’s north-western neighbours seems like a remote possibility for many years to come. Being a landlocked state tucked away in a far-flung corner, the state has so far relied on agriculture to fuel its economy. However, the returns from agriculture have been stagnant for almost two decades. The recent issue of stubble burning in Punjab and Haryana has only served to further highlight the perils of over-reliance on agriculture for a region’s economy. Despite sitting at the head of historic trade routes that have traditionally led to economic prosperity, Punjab finds itself battling economic dire straits.
Punjab’s problems are further exacerbated by the fact that it is surrounded by hill states on three sides – Jammu and Kashmir to the north, Himachal Pradesh to the east and Uttarakhand to the south east. Over the last few decades hill states have been granted special economic packages, such as tax relief and subsidised power, in order to encourage the growth of industries. This accelerated the flight of whatever little industry there was in Punjab to the neighbouring hill states.
For any industrialist looking to set up base in the region, it makes more economic sense to cross the state border and set up a factory in Himachal Pradesh or Jammu and then access the large demographic market and road infrastructure of Punjab, rather than set up base in Punjab itself. Even neighbouring Haryana has been able to capitalise on its proximity to the national capital – with 13 of its 21 districts now falling under the National Capital Region (NCR) category – and thus reduce its dependence on agriculture. A large chunk of Haryana’s revenue now comes from the three districts of Gurgaon, Faridabad and Sonepat alone – all located at the fringes of the capital. The proposed expressway with its promise to provide access to sea ports would have provided incentive for export-based industries to grow in Punjab and help it wean its economy away from agriculture.
The ruinous state of Punjab’s economy is no secret. A decade-and-a-half long insurgency left the state emotionally, socially and economically shattered, with a debt burden of 1 lakh crore to honour – a sum it had run up to fund its counter insurgency operations. Most of the state’s gross domestic product goes into servicing the interest payments on this debt alone. The prosperity of the Green Revolution was short lived. The farmers in the state which still makes the largest contributions to India’s grain pool of wheat and rice are struggling to make ends meet. Agriculture, in general, is not a very profitable occupation anywhere in the world. Even developed economies like the US and the EU incentivise farmers to stick to farming by heavily subsidising agricultural production. Agricultural subsidies, for instance, comprise nearly 38 per cent of the European Union’s annual budget. India cannot afford subsidies on such a massive scale and its farmers continue to hope against hope while pitting their survival on agriculture.
Punjab’s economy is seriously ill and the only sure shot cure is to gradually wean it away from its dependence on agriculture and to increase the share of the industrial and services sector in the state’s economy. To do this, massive investments in infrastructure are needed. The proposed Pathankot-Ajmer Expressway could be the first step in this direction. In the longer run, India would need to invest in the political stability of its north-western neighbours so that the states falling along the western border could reap the same benefits from enhanced connectivity and trade that the eastern border regions are currently witnessing.