Punjab govt's wrong move

The Punjab government’s mortgaging of government properties including a mental hospital, homes for widows and jail land to raise funds is the latest in a string of ill-advised and short-sighted steps it is taking to deal with the financial crisis confronting the state.  Punjab is facing a massive debt of Rs 1.25 lakh crore and in a bid to raise loans of up to Rs 2,100 crore to tide over the immediate crisis, the government is mortgaging 12 properties it owns.

Hospitals for the mentally ill are grossly inadequate in India. It is well known that problems like drug and alcohol addiction, which are closely linked to mental illnesses and mood disorders, are alarmingly high in Punjab. In the circumstances, one would have expected the Punjab government to increase the number of treatment facilities and hospitals, and at a minimum, secure the existing ones.  Similar is the case with shelters for widows. It is unfortunate, therefore, that instead of taking steps to stabilise the future of support systems for vulnerable sections of our society, the Punjab government is acting to throw them into jeopardy. Other properties the government has reportedly mortgaged include the Gandhi Vanita Ashram, a building of historic significance.

There is no doubt that the cash-strapped Punjab government needs to fix its finances. Among other things, it has repeatedly delayed payment of salaries of government employees, especially school teachers, and is yet to disburse Value Added Tax refunds to industry.  The government blames its woes on a sluggish economy. While this may explain a part of the problem, Punjab’s funds crunch has more to do with its splurging. The free power to farmers and other populist moves are the major reason for the massive debt. And several of these populist programmes such as provision of free power benefit rich farmers (17 per cent) only, not the small and marginal farmers who do not have tube wells. Yet, the government persists with this largesse to rural Punjab.

The Punjab government claims that it is taking loans for development expenditure. This isn’t true. Apparently, much of the loans will go towards paying off earlier loans and funding its populist programmes, which means it is not going to get out of the mess anytime soon. In fact, its debt is likely to mount further. This makes the mortgaging of hospital land, widows’ shelters and jail land all the more untenable. The future of vulnerable and marginalised sections of our society is already precarious and must not be jeopardised to fund the Punjab government’s profligacy.

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