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Millennium Post

Punjab politics on rocky turf

Politics and economy are inter-dependent. Punjab is the latest example. The developing strains between the Akali Dal and BJP relations are contributing to further deterioration of the state’s fiscal health. A look-back will indicate how the economy of once most richest and prosperous state is heading for terminal stage and also the form their relationship is likely to acquire in the foreseeable future.     

During 2007-2012 when the Akali-BJP alliance captured power, the Akali Dal depended on the support of BJP’s 19 MLAs to run the coalition government. Despite occasional irritants, the coalition had a smooth run, thanks to the give-and-take policy the allies pursued. The BJP had a reasonable say in important governance decisions.  The situation has undergone a change after the alliance’s victory in the 2012 elections. The Akali Dal is no longer as dependent on BJP’s support as it was during 2007-2012 when the latter had 19 MLAs. The saffron party’s strength in the House dwindled in the 2012 elections and the Akali Dal has also become numerically almost self-dependent. Besides, the party has also been expanding its support among the Hindus, the BJP’s main support base. A number of Hindus won the 2012 elections on Akali Dal ticket.

Such a situation was bound to cause strains between the ruling partners relationship. Newspaper reports last week indicated that the BJP felt slighted by its alliance partner’s having taken complete control of the administration and not involve the party in decision-making. 

The latest instance of the intensified discontent in the BJP is the party leaders’ charge against the Akalis invading into departments held by BJP ministers. They have resented Deputy Chief Minister Sukhbir Singh Badal’s ignoring the BJP ministers by not taking them along during his overseas tour for studying the problems of the departments of which the BJP ministers are in-charge. Instead, he took a team of bureaucrats with him.

Another development that has caused heartburn in the BJP camp is the issue of appointing an IAS officer as Managing Director of the Punjab Water Supply and Sewerage Board of which Baldev Chawla of the BJP was the chairman till his resignation recently.   

The coalition era has become not only a major source of political instability in India but is also leading to sharp deterioration in the states fiscal health with populism becoming the main source of their retaining and recapturing power.  There are no two opinions about Punjab’s facing virtual bankruptcy. There is no money in the state treasury. The government has started mortgaging its property to raise funds for disbursing even salaries/pensions and for meeting its day-to-day expenses. A day after newspapers carried a report that the government has mortgaged properties held by the Punjab Urban Development Authority (PUDA), the chief minister categorically declared, ‘The government has no plans to mortgage its property to raise funds for day-to-day affairs.’ He slammed media reports saying ‘these are absolute canards and baseless.’ He also asserted, ‘The state’s financial position was sound enough to meet its fiscal obligations.’

Ironically, the day the chief minister’s statement was published, newspapers also carried a report saying ‘Canara Bank has confirmed it has extended a loan of Rs 500 crore (on 21 August and the cheque delivered on 23 August) to PUDA after the latter mortgaged its properties as collateral.’     
That the growing strains between the ruling partners are affecting the state’s fiscal health has also been obliquely confirmed by the Finance Minister Parminder Singh Dhindsa. In his interaction with a newspaper last week, he said the “coalition dharma” in the ruling Akali Dal-BJP combine was coming in the way of enlarging the ambit of tax structure and plugging large-scale tax evasion in the state. He said, ‘Lots of things to generate much more revenue were decided but withdrawn because of the coalition dharma.’ (He avoided naming BJP). 

What made the government withdraw the proposals to generate more resources was the fact that these were mainly directed at the urban population which the BJP opposed as the urban population is its main support base. 

The charge against the Akali Dal is that it is not mobilizing resources from the rural, particularly agriculture, sector. An example. The state has been paying huge subsidy on free power for agriculture sector. Experts committees have recommended that only small and marginal farmers owning less than five acres, who constitute an overwhelming majority of farmers, should be provided free power to ensure viability of their traditional mode of livelihood. As it is the elite among the Sikhs whose representatives control the levers of power are the main beneficiaries of free power, no Akali-led government including the present Parkash Singh Badal ministry will ‘rationalise subsidy on free power’ to agriculture sector.   

The severe cash crunch the Punjab’s coalition government is facing is also adversely affecting the state’s development projects. It has, however, not stopped the top Akali bosses particularly Sukhir Badal from announcing new projects costing thousands of crores without telling the fate of the schemes he had announced in the past. These announcements remind one of what Nikita Khrushchev, (the late Soviet leader) has once said 'Politicians are the same all over. They promise to build a bridge even where there is no river.' 

To ensure the credibility of their promises the Akali leadership needs to bring out an action-taken report giving the implementation stage of each project and the sources of its funding, whether from the state government or the Centre.        IPA 
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