The Punjab paradox

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SummaryPunjab’s agricultural economy, based on supplying foodgrains for the PDS, is heading for disaster

On October 10, Rahul Gandhi gave a political speech in Punjab. He made several political points. The Indian Express, in one story covering the speech, listed 10 of these points. The last of these quoted Gandhi (perhaps a translation) as saying, “Punjab gives food to India … the country cannot stand without it.” He related Punjab’s role in feeding the public distribution system (PDS) to the feasibility of the Right to Food effort of the ruling coalition.

This is the paradox of Punjab. The Green Revolution helped Punjab become more prosperous, by supplying grain to the rest of India. This role was consonant with the goals of national policy. This role is being pushed further by national policies such as the Right to Food Act. Punjab’s economy is locked in to this role. But Punjab’s agricultural economy, based on supplying food grain for the PDS, is heading for disaster. Punjab’s economic welfare is not aligned with how the national goal of the right to food is being implemented.

As it happens, I was also speaking in Punjab on the same day as Rahul Gandhi. It was only an academic lecture at Punjabi University, Patiala. But I emphasised that Punjab is heading for disaster. The political and economic equilibrium is leading to an unsustainable depletion of groundwater, and the groundwater table will collapse in a decade, or soon after. Politicians and middlemen are contributing to the distorted use of water and the lock-in of Punjab farmers into a situation that will sacrifice their livelihoods and wellbeing. Praising them for their current role is cynical and counter-productive. A solution is needed to stave off collapse.

In his speech, Gandhi criticised corruption and bemoaned the lack of jobs in Punjab, which contributes to societal problems such as drug addiction. In my talk, I also said that, for Punjab to avoid economic collapse, it needs a more honest and effective government. But this is a no-brainer. What else can one say about a concrete way forward? Here I offered only two suggestions, which must work together.

Given Punjab’s social and economic structures, its size and geographic position, it is not a great candidate for large-scale labour intensive manufacturing. Instead, it has some chance of succeeding as a place for flexible mass-customised production. An analogy might be to northern Italy, which thrived in this role for decades, but is now suffering from lack of cost competitiveness. Another might be

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