CHANDIGARH – The budget presented by Finance Minister Parminder Singh Dhindsa has unmistakably indicated that the state’s economy is hanging by a thread. On the growth rate trajectory, the state lags behind almost all other major states. Its growth rate for the current fiscal has been pegged at 5.96 per cent, up from last fiscal’s 4.92 per cent. Dhindsa expects that in the next fiscal, the growth rate would touch 7 per cent.
The growth rate of the state’s manufacturing sector has been on the decline for the past three fiscals. It was recorded at just 3.14 per cent for the current financial year, down from 3.59 per cent and 3.67 per cent, respectively, in the previous two fiscals. The slowing down of the manufacturing sector means a drop in jobs and employment opportunities.
The state has been downwardly mobile over the years in terms of its growth rate. During the 12th Five-Year Plan (2012-17), Punjab’s growth rate of the state domestic product (SDP) has been pegged at 6.4 per cent, virtually the lowest compared to states such as Haryana, Bihar, Chhattisgarh, Goa, Andhra Pradesh, Gujarat, Kerala and Madhya Pradesh. In stark contrast, Haryana’s economy has been growing at a much faster rate for the past about two decades. As per the latest economic survey of Punjab, Haryana’s per-capita income (Rs 67,260, on the basis of constant prices) is higher than the combined per-capita income of Punjab (Rs 49,529 for 2013-14) and Bihar (Rs 15,506). On the per-capita income list, Punjab is now at the ninth position, behind states like Haryana and Gujarat.
The state grew at the rate of 4.8 per cent during the 8th Plan (1992-97). It was then ranked 18th. During the next Plan (1997-2002), it slipped to the 21th place; in the 11th Plan (2007-2012), it went down further to the 27th spot. At the end of the current Five-Year Plan, it will be almost at the bottom of the pile.
In 1970-71, the share of the primary sector, mainly agriculture, was 55.11 per cent in the gross state domestic product (GSDP). It has come down to 27.22 per cent. More than 60 per cent of the population is dependent on this sector. The state government says that the Finance Commission discriminated against Punjab by not allowing it the revenue deficit grant. The annual loss on this count will be in the range of Rs 3,000-4000 crore. The employees’ salary and pension bill will go up to Rs 30,000 crore per annum when the new Pay Commission gives its report. The state, which once used to be number one in the country, is in dire straits and the budget does not even remotely address this crisis.
