Punjab, Haryana as Economic engine

 By
M.L. Sondhi & Y.S. Rajan
The Tribune, June 4, 1999

Very few people realise that the Punjab and Haryana region has truly been the economic engine of India, starting with the Green Revolution. The power of the engine does not end there.  It has a great future for the coming several decades.  Chandigarh, which is the core of the region, plays a crucial role as an economic, social, cultural and security node for the resurgent India of the new millennium.  This is so despite the great gravitational pull of Delhi.

In terms of a few social and economic indicators, the per capita consumption of electricity in Punjab is the maximum among the Indian states (690 kilowatt per hour).  Haryana is third (443 KW) on the list.  In the net sown area Punjab accounts for (83.7 per cent and Haryana 80.3 per cent as in net irrigated area.  They are top one and two.  So is the situation in the yield of food grains: Punjab (3680 kg/hectare) and Haryana (2730 kg/hr.).

But the situation is not so in value addition in manufacturing.  Punjab is tenth and Haryana twelfth.  Investments are low.  Punjab is second on the infant mortality index and Haryana lower in the line.  The literacy rate is also not so good.  So what is the future of the region?  Is it going to saturate on the agricultural yield and wealth front?  Is the region going to be bogged down by the problems of environmental concerns for sustainable agriculture?

A careful study of the emerging social and economic opportunities and technological possibilities provides an optimistic picture.  The peaceful conditions which have returned during the past several years further enhance the case for such an optimism.  Let us look at the strengths of the region:  excellent road infrastructure; fairly good electric power system; extensive telecom network; agricultural wealth; entrepreneurial people; many areas in and around the region can become major destinations for attracting domestic and foreign tourism.  The region also has got a fairly good network of academic institutions and scientific and technological organisations.

Another not so well-noticed socio-economic indicator is that Punjab and Haryana have the lowest of the urban-rural divide in the country.  The ratio of urban-rural per capita consumption expenditure 1.1 for both states, the highest in India being 1.8.  this is, in fact, a good starting point for all-round growth for deriving maximum benefits from the modern wealth generating information technology (IT) and allied services.  What IT requires is large moderate investment, high quality minds and an entrepreneurial spirit.  In addition to tapping the human resources of the region, it is also possible to tap the investments and knowledge base of the Indian diaspora, which have gone abroad from this region.  They can also provide a number of contacts for the lucrative markets abroad for IT and IT-enabled services.

The major initiative taken by the Prime Minister in freeing the IT and software industry in the country from the shackles which prevented its speedier growth earlier is an opportunity which Punjab, Haryana and Chandigarh should capitalise upon.  The rich culture and great civilisational stories of this region, spanning many centuries, form a rich mosaic which can be captured through multimedia, CD-ROM and the Internet.  Activities around such projects by themselves can generate wealth and employment opportunities, and help India to usher in an IT super power.  These IT marvels can also bring in much tourist traffic to the region, increasing wealth generation from the services sector.

Another area worth exploring is to build upon the strength of the medical services available at and around the prestigious PGI of Chandigarh.  Excellent road and other facilities can enable the setting up of several private and joint sector hospitals.  It is also possible to attract several software companies and investment in clean and high technology industries.  Let us not forget that Chandigarh had attracted the Semiconductor Complex and the Central Scientific Instruments Organisation of the ICSR.

One of the major reasons to attract these IT companies is to give a new lease of life to several small-scale industries in many towns in this region, which were once vibrant and known for items such as agricultural implements, bicycles and optical instruments.  But these industries require major technological upgradation and orientation to face the new challenges of global competition which will increase with the introduction of regimes of the World Trade Organisation (WTO).  They need new product design, new ancillaries and new methods of trade, which would soon be dominated by E-commerce.  Hence, as a spin-off from the IT industry, upgradation and restructing of the small-scale sector can result.  Then value addition will go up from the present low levels mentioned earlier.

Lastly, the IT industry is also vital for managing the new ecologically sustainable challenges of agriculture with global environmental standards.  The new agriculture demands system management.  Modern sensors and IT make it possible to modernise agriculture as Israel has shown the world.  This region can give leadership to the rest of India.

There are several such possibilities as need to be promoted by an enlightened leadership from the political system, business community, intellectuals, professionals and the public.  The region, which gave food security in the sixties, can serve as the engine for economic and social security.