Millennium Post

Badal’s political woes increase

This week’s column will deal with two issues: Announcement of new taxation measures by Akali-Bharatiya Janata Party government; and, Punjab chief minister Parkash Singh Badal’s intriguing silence on the BJP leadership’s demand for Prime Minister Manmohan Singh’s resignation on the coalgate issue.  

The inevitable has happened on the additional resource mobilisation issue. The government last week announced new levies Nobody can legitimately deny that the state needs funds for meeting committed expenditure, development and for filling the state’s empty coffers.

The situation poses three questions. Who is responsible – the state’s ruling class or the Centre – for pushing Punjab to the brink of bankruptcy? Should the common man, and not the rich economic and political class, bear main burden of new taxes? What are likely to be the political implications of these new levies?

Fiscal mismanagement and the populist policies of the successive Akali-BJP and Congress governments have been responsible for the state’s present terminal financial health. The present Akali-BJP rulers have been charging the Centre with discriminating against Punjab in giving financial help. Now, Deputy Chief Minister Sukhbir Singh Badal has given a new dimension to his anti-Centre tirade.

Talking to the media at Gurdaspur on 31 August, he alleged that the ‘Congress-led United Progressive Alliance [UPA] government is forcing the Punjab government to impose property tax and has withheld Rs 1100 crore grants sanctioned under the Jawaharlal Nehru National Urban Renewal Mission Centre last year and Rs 900 crore this year’. He, however, did not explain the reasons of the Centre’s ‘arm-twisting’ for imposing property tax. The fact is that under the urban reforms programme, the states can claim JNNURM grants only if they, fulfill the pre-condition of raising their own share by levying property tax. The pre-condition is applicable on all the states. Many states have fulfilled the pre-condition and availed of the grants. But the Punjab government has failed to fulfill its commitment. How does ‘arm-twisting’ by the Centre arise?

Sukhbir’s statement is obviously to placate his party ally BJP, whose urban vote bank would mainly be hit by the new property tax measures.

There are more shocks waiting for the common man, especially the urban voter. He should be ready to bear additional burden of taxes as the Akali Dal is not likely to cut down the quantum of huge subsidies and freebies it gives to its own vote bank. Free power for the farm sector alone costs the exchequer Rs 6000 crore annually.

Nobody would want to deny the supply of free power to small farmers, those owning up to five acres. But the Akali leadership will not curtail the quantum of free power subsidy for the farmers owning larger holdings. They are the main beneficiaries of free power, the class to which most leaders of the ruling Akali Dal belong. It is mainly this class of landholders, who also keep clamouring for higher minimum support prices [MSP] for agricultural commodities, disregarding the fact that high-priced agricultural commodities are also largely responsible for the rising cost of living.

As compared to the small farmers, it is the large landholders who produce larger surpluses. Higher MSPs fetch them higher returns. On the other hand, surpluses of small and marginal farmers are comparatively much less and yield them lesser returns. This is also one of the reasons for the widening disparities of incomes in the farm sector. The small farmers, therefore, need to be given higher MSPs.

It can be argued that differential rates of MSPs for the large and small landholders can lead to frauds. Large landholders with larger surpluses will claim higher MSPs by showing part of their surpluses as belonging to small farmers who are entitled to receive higher MSPs. One is reminded of the reports about such tricks played by landlords at the time of enforcement of the land ceiling laws. These reports had alleged that several big landlords had saved large chunks of their surplus lands not only by showing them belonging to benami farmers but also showing their cattle as their benami owners!

What is intriguing for the Punjab watchers is the silence of the Chief Minister Parkash Singh Badal on the BJP’s demand for Prime Minister’s resignation on the coalgate scam. Some media reports claim that Badal’s personal equation with Manmohan Singh is the main reason for not supporting his favourite ally’s demand for PM’s resignation.

Even if far-fetched, some of Badal’s critics have a contrarian view for his not supporting the resignation demand. They claim that although the Congress-led UPA-II has been tainted with mega scams, the latest being coalgate, Punjab has also been hit by several gatecams, though of comparatively miniature scales, like the cables-gate and the sand-and-gravel-gate. The latest is the landgate. [IPA]
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