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Opinion National Interest PoV 50-Word Edit

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Society & Culture Around Town Book Excerpts Vigyapanti The Dating Story

More Judiciary Education YourTurn Work With Us Campus Voice

The 3 failures that plague Punjab today

Militancy does not account for Punjab’s decline that commenced a decade after the cessation of violence. Three subtle, cumulative failures provide the explanation.

If you take a drive through rural Punjab today, you will find three incongruous elements that don’t belong in the same frame: a mortgaged field, an electrically powered tubewell for which no payment is made and which cannot be turned off, and a household with barely any young member—the family opted to sell land in order to finance their son’s migration to Canada than invest in a tractor. Three decades ago, the state’s economy was destabilised by insurgency. But today, it is threatened by fiscal mismanagement, a transition that has largely gone unnoticed.

In 1981, Punjab boasted the highest per capita income among Indian states. Even after two decades of militancy, it maintained a fourth-place ranking in 2001. Currently, it sits closer to the 10th position and bears the largest public debt burden relative to its economic size among the major states. The conventional explanation attributes this decline to armed conflict; however, this rationale does not align with the chronological sequence of events or theoretical analysis. 

The timeline the militancy story ignores

Punjab’s income, when compared to the national average, remained stable through the insurgency and the subsequent decade. It was 119.6 per cent in 1960-61, reached a peak of 169 per cent during the Green Revolution in 1970-71, and remained at 146.2 per cent in 2000-01. A significant decline is observed only after the cessation of hostilities, with the income ratio decreasing to 106.7 per cent by 2023-24 and projected to be 105 per cent by 2025-26.

A security shock adversely impacts an economy during its occurrence. However, this particular shock manifests two decades later, during peacetime, indicating a failure in policy rather than the work of violence.

This scenario aligns precisely with growth theory. Punjab experienced a one-time productivity surge due to the Green Revolution’s high-yield seeds and guaranteed procurement, which increased output before the rest of the country could catch up. Subsequently, this advantage plateaued as the same seeds and irrigation technology became widespread nationally.

According to Robert Solow’s framework, further developed by Robert Barro and Xavier Sala-i-Martin’s work on conditional convergence, a region that initially advances due to a windfall will eventually regress toward the mean. This, unless it continues to deepen capital through reinvestment, retraining, and diversification, rather than relying on the initial gain. In essence, a windfall does not constitute wealth until it is reinvested.

Punjab........

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