Improved power supply and road connectivity, better governance and more industries — Sukhbir Badal tells Bhupesh Bhandari all that he is doing to change the fortunes of the state.
The leather sofa is luxuriant and warm. The room overlooks a sprawling lawn surrounded by very high walls. The waiters are dressed in white uniforms and blue berets. The security guards in grey safari suits and red turbans look fit and alert. Badal is at ease this afternoon. He makes light of the controversy that has erupted over his decision to donate Rs 1 crore to his alma mater, Lawrence School at Sanawar in Himachal Pradesh, breaks into Punjabi frequently (dub ke khao, te dub ke kaam karo; eat hard, work hard) and, once, refers to food (McDonalds burger and chicken) to illustrate a point.
Kapil Chopra, general manager of the Trident and Oberoi hotels in Gurgaon, which are owned by the Badal family, describes him as a “chilled-out person” who comes occasionally for a meal. Contrary to rumours, Chopra adds, there is no suite in the hotels booked round the year for him. Journalists in the Chandigarh bureau of Business Standard say that in the last several months, ever since the Shiromani Akali Dal and Bharatiya Janata Party returned to power in Punjab, Badal has become more confident and less irritable. That’s perhaps because he is the sole power centre in the state now after cousin Manpreet Singh Badal left in 2010 (he was the state finance minister) to start People’s Party of Punjab but was routed in the January elections to the state assembly. (Parkash Singh Badal, his father and the chief minister, is 84.)
- 1,980 MW plant at
TALWANDI SABO (Vedanta)
- 540 MW plant at
GOINDWAL SAHIB (GVK)
- 1,400 MW plant at
- 2,640 MW plant at
- 1,320 MW plant at
- 700 MW plant at
- 1,320 MW plant at
GOINDWAL SAHIB (GVK)
- 1,320 MW plant at
KOT SHAMIR (Lanco)
- 500 MW gas-based power
PLANT AT RAJPURA (Jay Polychem)
Some observers say that after the Naroda Patiya verdict, which has taken some sheen off Narendra Modi, many National Democratic Alliance regional leaders fancy their chances in case the alliance comes to power at the Centre in 2014: Shivraj Singh Chouhan of Madhya Pradesh, Nitish Kumar of Bihar, Raman Singh of Chhattisgarh and Badal. Whoever has the best record in governance will have the strongest case for the top job. There are other pressing concerns too for Badal: the drug menace in the state, for instance. Senior Punjab officers admit it’s a serious problem, though not of the magnitude that Rahul Gandhi made it out to be during his recent visit to the state. (Seven out of ten youths in Punjab, Gandhi had said, are drug addicts. Calling him immature, Badal says the statement was a “diversionary exercise to deflect attention of the media from Vadragate and Coalgate”.) There is also talk of revival of militancy in the state. To deal with both problems, Badal has to develop the infrastructure, reduce corruption, deliver services, create jobs and attract investments.
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Every weekend, Badal travels to Delhi to spend time with his wife Harsimrat (Member of Parliament from Bathinda) and kids. Here, once a month, he calls 17 businessmen (Sunil Kant Munjal, Rakesh Bharti Mittal, Onkar Kanwar, Malvinder Singh, Atul Punj, Manoj Gaur, Pramod Bhasin, Gautam Thapar and Analjit Singh are amongst them; 15 of the 17 are Punjabi) to Kapurthala House to devise ways to get investments into Punjab. So far, nothing tangible seems to have come of the exercise. Some of these businessmen Business Standard spoke to offer no insights. Not all attend all the meetings. Badal admits attendance is not 100 per cent, though it is upwards of 80 per cent. None has committed any investment to the state. But Badal is hopeful it will help in the long run. “They will become our brand ambassadors,” says he.
It won’t be easy. Punjab has suffered on two counts: the militancy years of the 1980s, and the incentives offered by the Centre for the development of northern hill states (particularly Himachal Pradesh). Local business families like the Munjals and Oswals have made large investments outside the state. To reverse the tide, Badal is working on a new industrial policy which he hopes to unveil soon. It will likely offer fiscal incentives for sectors like textile, processed food, sugar, hand tools, sports goods and, maybe, leather works. “The possibilities for the leather industry will be tremendous once trade with Pakistan is liberalised (from the current list of 300 items),” says he. Entrepreneurs in the state, he says, can import inexpensive raw leather from Pakistan, stitch it into shoes or garments, and export it back across the border. “The biggest incentive for Punjab will be the opening up of the border,” says he. In mid-October, Badal had prophesied that the list of tradable items would be expanded to 6,000 by month-end. No such thing has happened. Local businessmen are less enthusiastic. Unless Pakistan designates India a most-favoured nation, which looks very difficult right now, nothing will move, they know.
Badal’s ability to offer incentives will be restricted by Punjab’s straitened finances. Though its fiscal deficit of 3.42 per cent (of the gross state domestic product) was within the target of 3.5 per cent for 2011-12, the revenue deficit at 2.74 per cent was way beyond the target of 1.8 per cent. Chief Secretary Rakesh Singh discloses that the state has engaged IDBI to “suggest steps for boosting revenue and cutting expenditure” and will “look at divesting its investments in low-priority investments and assets like its agro-juicing plant”. But Badal insists there is “nothing wrong with Punjab’s finances”. The state’s debt is 30 per cent of its gross domestic product, which is less than the Centre’s 51 per cent. “We have brought it down from 46 per cent when we took over (from the Congress) five years ago,” says he. Badal says it’ll fall further because he expects VAT collections to rise from Rs 16,000 crore per annum now to Rs 35,000-40,000 crore in five years’ time. How? Badal says that after moving VAT payment online, he discovered that of the 221,000 registered accounts, 125,000 paid zero and another 75,000 paid less than Rs 500 each. “Only 735 people were paying 95 per cent of the revenue.” He has moved to plug the leakages and improve collection.
But Badal is reluctant to cut expenditure because it will crimp economic activity in the state and make him unpopular with the masses. He is not ready to charge farmers for electricity (“The prices of their output is controlled, but their inputs are freely-priced and they are not allowed to export; so they need to be given free electricity”) and subsidise gas cylinders to consumers in the state (“Why should I? If the Centre collects Rs 100 from Punjab, it gives me only Rs 3.20. I would subsidise cylinders if it were to give me even Rs 20). But the message has gone down to his managers that losses will not be tolerated. For example, the two power utilities, Punjab State Power Corporation and Punjab State Transmission Corporation, have been told that they need to show an operating profit this year. “Otherwise, my job is on the line,” says Power Secretary Anirudh Tiwari. “But that’s not too difficult. Last year, there was a cash loss of only Rs 260 crore on revenue of Rs 18,000 crore.” Thus, the state is upgrading the transmission network into high-voltage to cut down transmission losses, has installed metres outside homes and commercial establishments to make them tamper-proof and has replaced old equipment. “Once we are power surplus,” says Badal, “we will export to other states as well as Pakistan.”
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The benefits of industrialisation will not accrue to the aam admi of Punjab overnight. Here Badal’s strategy is governance reforms. “What Anna Hazare is saying is rubbish. You cannot eradicate corruption by forming a Lokpal. It will become another den for corruption,” says he. “Corruption happens when people come face-to-face with the government. Corruption ends when you remove the link. In one year, we will cut all these links, from birth certificates to death certificates, bill payments to power connections.” Thus, all government purchases are now done through online auctions. Car registrations are offered by dealers. There is a proposal that school principals should be allowed to issue learner’s licences. And almost all property records have been digitised. At the moment, these records can only be seen online; Badal says soon transfers will also be enabled online.
Pramod Kumar, chairman of the Punjab State Governance Reforms Commission, says the list of affidavits that citizens need to submit for various works has been cut from 120 to 11. “This has resulted in a benefit of Rs 300 crore to the people. We don’t mind the loss,” says he. Attestation of certificates by a government officer has been done away with; self-attestation is enough. All exams for jobs in the state government have been outsourced to C-DAC (Centre for Development of Advanced Computing) and Panjab University. “It’s impossible to alter the results now,” says Kumar. In other words, sifarish is out of recruitment. All police stations will have an air-conditioned outpost, staffed by women in civvies, where people can register FIRs online, apply for gun licences and seek permission to put up a loudspeaker, et cetera. “About 85 per cent of work with the police is of this kind,” says Kumar. People need to go to the station only for heinous crimes. All stations will be networked, which means a theft in Mohali can be reported even from Amritsar. So far, 100 such centres have been set up.
In the last six months, says Principal Secretary (health and family welfare) Vinnie Mahajan, over 520 doctors (including 120 specialists), 100 dentists and 800 nurses have been hired for government hospitals through walk-in interviews. Another 1,000 doctors are to be recruited next.
These benefits are yet to sink in. Businessmen and ordinary folks remain skeptical of what is being done, and insist not much has changed on the ground. On the other hand, governance reforms have been resented and resisted by the bureaucracy. Some, Kumar says, even told Badal that this would be politically suicidal. The patwaris (village revenue and record officers) threatened to go on strike in protest. Badal refused to budge and told his men to recruit new patwaris. The threat dissipated. But the benefits of e-governance will not be realised fully if access to the Internet is limited to cities and towns. Badal says he could partner with a private company to set up kiosks in villages from where people can transact. Bhatti, the satirist, would have approved.