With the budget to be presented on March 11, the government is facing a serious financial crunch. The Planning Commission has fixed February 19 to discuss the Punjab plan in Delhi, but financial experts say Punjab needs to mobilise additional resources to the tune of Rs 4,000 crore to expand the size of its annual plan. Incidentally, Haryana’s plan of Rs 6,300 crore has been agreed in principle by the Centre.

Punjab also is keen to expand its annual plan for the next fiscal year to Rs 6,000 crore

Punjab Chief Minister Parkash Singh Badal told The Indian Express, “Punjab is under a debt burden of Rs 55,000 crore.” This means about Rs 5,000 crore annually as interest alone, besides additional funds for freebies, including free power to the agriculture sector, funding for atta-dal scheme and so on. The release of Rs 292 crore on January 30 in lieu of hike in power tariff in urban areas has only added to the burden, say experts.

In Punjab, the growth rate was once the highest in the country, but today it stands at 5 per cent as against the national growth rate of almost 9 per cent. In neighbouring Haryana, the target is to achieve a growth rate of about 15 per cent in the current fiscal.

The downslide has been gathering pace since 2001. Agriculture, for long the engine of Punjab’s economy, has lost steam, growing at 2 per cent, while the industrial sector is stuck at 4.2 per cent, having attracted less than 2 per cent of the country’s industrial investment proposals.

Even its move to convince the Union government to do away with special concessions for industry in the hill states of Himachal Pradesh and Uttaranchal, where more than 250 industrial units, mostly in the pharmaceutical sector, have migrated, has borne little fruit. While the Centre has agreed to do away with the tax holiday for those units that are not in manufacturing, this is not likely to give any major relief to Punjab as most of the units that shifted to the hill state are pharma units and are involved in manufacturing activity.

With little funds for development, the state has slipped on most parameters of growth. Even in per capita income, the state, which once took pride of place, is down to number five. Punjab has a sizeable NRI population and there is hardly a house in Doaba belt, which does not have one or more NRI members in each family. However, the FDI flow to Punjab today is only 0.7 per cent.

Bikram Singh Majithia, Public Relations Minister, Punjab, when contacted, said, “Sizeable FDI is expected from the Rs 19,000-crore Bathinda refinery in which L.N. Mittal’s company brings 49 per cent FDI.” He claims that this is “the highest-ever FDI inflow to Punjab in a single project”.

He said the nod for an international airport at Mohali and keen interest shown by big corporate houses to invest in Punjab only indicated that “Punjab would regain its pristine glory” soon.