Farming crisis

Print edition : June 19, 2020

Police personnel speaking to migrant workers who blocked the national highway near Amritsar on May 29 demanding speedy arrangements to help them return to their hometowns. Photo: NARINDER NANU/AFP

After the Punjab government resumed public transport services, in Amritsar on May 20. Photo: PTI

Faced with acute revenue shortage and the threat of an increase in COVID cases with the return of people who migrated to other States, Punjab is fighting a tough battle.

THE unplanned imposition of lockdown has posed several challenges for the Amarinder Singh government. Agricultural operations in the State, considered the bread basket of India, have been hampered by the absence of farm labourers, who started returning to their hometowns inUttar Pradesh and Bihar, during the crucial period of rabi crop harvesting followed by the kharif crop sowing. The economic slowdown and the lockdown have forced textile mills, textile processing units and cycle manufacturers in the State to shut down operations.

In an interview to Press Trust of India on May 17, Amarinder Singh said 10 lakh jobs had been lost in Punjab due to the lockdown.

The State has been facing a financial crunch, losing Rs.3,000 crore every month since the lockdown began. “We are looking at minimum Rs.50,000 crore loss for the full year,” he said. The economy is in free fall.

The Chief Minister pegged the April revenue shortage for the State at 88 per cent of the estimated revenue for that time of the year. Participating in a video conference of Chief Ministers of Congress-ruled States in early May, Amarinder Singh said: “As against the estimated revenue of Rs.3,360 crore for April, only Rs.396 core had been received during the month. The State’s power consumption had declined by 30 per cent, with a daily loss of Rs.30 crore to the Punjab State Power Corporation [in terms of power tariff collection].”

The Chief Minister added that the goods and services tax (GST) arrears of Rs.4,365.37 crore, was yet to be paid by the Government of India.

According to a senior Congress leader, the Centre did not clear the State’s GST dues for the past six months. Add to this the fact that there is no GST on cereal crops, and one can visualise the financial crisis Punjab would be staring at. The distress of migrant labourers has affected the economy and the polity.

Tara Singh Sandhu, general secretary of the State Congress committee said: “It is a gloomy picture in Punjab. People talk of agriculture being impacted due to the departure of farm labour. What is not given as much attention is the crisis it has caused in the manufacturing sector. The factories are beginning to open now. There will be production in the coming days, even if it will not be as high as it usually is, but where is the possibility of marketing? How does the product reach the market? Where is the labour? And equally importantly, where is the demand for the finished product? Where is the purchasing power? In the absence of jobs, where is the money in the common man’s pocket. Having said that, we must remember Punjab is an agricultural State. It suffers more because of lack of imposition of GST on wheat and paddy. In the absence of GST, how can the State generate revenue? We have been asking for GST repeatedly. But to no avail.”

The absence of GST on agricultural produce is not the only bane of Punjab as the COVID pandemic threatens to expand. If in the initial days of lockdown, Punjab looked at the possibility of 10 lakh migrant labourers leaving for their home States, now, a section of labourers from Punjab is coming back from Jharkhand, Madhya Pradesh and Maharashtra, bringing with them the prospect of an increase in the number of coronavirus patients. These workers go to these States to coincide with the sowing season there, and return to the home State in time for paddy sowing.

“Until the arrival of labourers from Madhya Pradesh, Jharkhand and Maharashtra COVID cases were under control. Now, there is the danger of community spread. Cases have been reported from Patiala, Sangrur and Hoshiarpur in recent days from people with no travel history,” Dr Rajesh Ghumman, a Patiala-based doctor, said. On June 2, the State reported 41 new cases, including 10 from Jalandhar. The cumulative number of cases was 2,342 (279 active ones) and 46 deaths. The Health Department said 2,017 patients had so far recovered from the infection. The majority of confirmed cases were from urban centres such as Ludhiana, Amritsar and Jalandhar. Amritsar reported 386 cases, Jalandhar 246 and Ludhiana 197. The initial cases were reported from those who had returned from the United Kingdom, Germany and Italy. Now things are different with those with no travel history testing positive, giving rise to the fear of community spread. “As stated by the Chief Minister, we have not seen the worst of COVID yet. The return of labourers to Punjab after completing sowing operations in other States will further complicate the issue,” Ghumman said.

Taking cognisance of the threat of community spread, the Indian Council of Medical Research (ICMR) started testing residents in four districts, Patiala, Ludhiana, Jalandhar and Pathankot, identifying clusters and villages in them. A team of health care and ASHA workers from the ICMR collected samples from Rajpura, a red zone in Patiala district.

On May 31, while announcing the extension of the lockdown with some relaxations up to June 30, Amarinder Singh said: “We had 23 new cases on May 29 and 19 cases on May 30 with no travel or contact history. These are the dangers of stage three of the virus. We have to be careful and cautious. In Amritsar, we have seven cases today. Of these, six cases are contact cases. So, what the doctors are telling you is right. The community spread of infection takes place in cities and mohallas.”

As the State braces for a surge in COVID cases, there is little blowing its way in this hour of crisis. For instance, aid from the Centre to tide over the economic crisis. Says Tara Singh Sandhu: “The Centre is saying we will support according to the population of the State. Money for economy will be released based on the population. Punjab, which has controlled the population, stands to lose. More so, if you compare it with States such as Uttar Pradesh and Bihar with a higher population density. Is the Centre punishing us for controlling population expansion? The Centre’s outlook is more unitary than federal.”

In order to overcome the “extremely critical” financial situation, the government has adopted numerous austerity measures. Amarinder Singh said “non-essential” departments had been asked to cut down expenses and manage their costs judiciously. He said an urgent economic package was needed for the States as all sources of revenue—GST, excise duty and VAT coming from transportation—had dried up. Punjab would find the way forward difficult, unless the Centre stepped in, he said.

Meanwhile, the State government is awaiting the initial report of the Group of Experts headed by former Deputy Chairman of the Planning Commission Montek Singh Ahluwalia. It was formed on April 25 to help the State devise economic and industrial revival strategies. The report is likely to be received in three months. It will take another month after that to finalise the same.

The 20-member task force formed on April 8 to suggest a lockdown exit strategy submitted its blueprint for normalising socio-economic activities in the last week of April. It may still be a long haul. Until then, Punjab can only hope and wait for its share of GST payments from the Centre, and hope to curtail the community spread of COVID. That, hopefully, will translate into greater economic activity in the market.

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