Punjab is considered the granary of India and yet it faces an agrarian crisis. Chief Minister Amarinder Singh has announced the most familiar solution which is farm loan waiver. The Congress had won the assembly elections on this promise. Rupees 15,000 crore has been estimated in the current budget to be the amount of the waiver. The loan on the other hand is estimated to be rupees 24,000 crore. It seems that the state government has not wised up to the magnitude of the crisis. In any event, the loan waiver will not stem the agrarian rot. Punjab is one of the richest states in India in terms of per capita income. It also has the highest agricultural productivity. At the same time there has been intense use of resource and as a result farmers have been made more vulnerable than in other states to changes in prices of agricultural produce and weather pattern. Government policies in the state in the past have been counter-productive and there has been no improvement since the new Congress government took office. The government in the state is also committed to provide free electricity to farmers but that applies to all states. Punjab is afflicted by the worst water crisis and ground water is over exploited. Power reform instead of power subsidy is the answer.
The loan waiver will benefit a little more than a million farmers the majority of whom own up to 5 acres. But Punjab needs greater opportunities in manufacturing and services while the reliance of the farm population on serials has to reduce. A loan waiver will enable the government to repay its large debt. But then education will be starved of funds.
