FREE MAN: Badal's largesse has pushed Punjab to the brink of debt trap

When it comes to freebies, few states in the country can beat Punjab-all thanks to Chief Minister Parkash Singh Badal's unwavering penchant for doles. It is a state where the farmers get free power and water, the city folk pay no house tax, the traders don't have to pay octroi, anyone above 65 years gets old-age pension, government staff pay scales are 30 per cent higher than Central scales and the Dalits get 100 units of power free.

All this is just a sample. The Akali supremo has surpassed himself since June this year. He has been on a dole-on-demand spree, distributing cheques to the village panchayats, municipalities and sundry NGOs at his "sangat darshan" in preparations for the assembly elections. These have left the state exchequer poorer by Rs 700 crore. At a recent meeting, a Planning Commission member told Badal that he wished he too could shift to the land of freebies. The sarcasm was lost on the dole king.

Badal's sop opera has reached a climax in a bid to counter the antiincumbency sentiment. The Opposition's criticism of his tactics has also reached fever pitch. "Badal is resorting to scorch-earth tactics by blowing up the public money to bribe the voters," charges state Congress President Amarinder Singh. Populism has been the only calling card of the SAD-BJP Government that had come to power by promising a string of sops. There has seldom been a cabinet meeting that did not sanction a fresh round of concessions. "All norms of financial prudence have been thrown to the winds," rues a senior bureaucrat.

STATE POLL THE AKALI SWEEP Party Positions In Assembly Election in 1997 (Total Seats: 117) AKALI-BJP 93 (48%) Congress 14 (26%) BSP 1 (7%) Others 9 (19%) Vote percentage in brackets COSTLY PROMISES > Octroi abolished in December; Cost: Rs 500 crore. > The number of old age/widow pensions has grown from two lakh in 1997 to nine lakh; Cost: Rs 200 crore. > Pension-cum-gratuity scheme for 140 private colleges. Cost: Rs 50 crore. > Shagun scheme for marriage of the Dalit girls; Cost: Rs 80 crore.

This is borne out by the state of Punjab's finances. The debt burden, pegged at Rs 11,800 crore in 1997, has galloped to Rs 35,000 or 40 per cent of the state's GDP. Punjab is poised on the edge of a deepening debt trap as 35 per cent of the tax revenue goes towards debt servicing. Badal's fund-guzzling populism has often diverted resources from plan schemes. Two months ago, when the then finance secretary K.R. Lakhanpal, known for his no-nonsense fiscal management, objected to the arbitrary funding of sangat darshans, Badal chose to shoot the messenger: Lakhanpal was abruptly transferred out.

The message is ominous. The five years of Rs 10,000 crore inducements have pushed the state into the quicksand of debt burden. Badal's gift of free power to the farmers-at a cost of Rs 800 crore a year-has bled the Punjab State Electricity Board white. Not only has it deprived the board of 40 per cent of its revenue, free power has rendered Punjab a "no-no" state for the World Bank and other lending institutions, throttling many development projects. Early this year, Badal did toy with the idea of withdrawing the sop, but the assembly elections were too near to risk a backlash from the peasantry that forms the Akali vote bank.

The populism juggernaut pays no heed to benchmarks of planning and financial viability. A project for building 12,000 houses every year for the lower castes had to be abandoned after sinking Rs 61 crore. Likewise, the free travel for everyone above 60 years had to be withdrawn after it led to a huge scandal and burnt a Rs 30 crore hole in state funds.

Badal explains financial profligacy by citing popular welfare. But all is not well with the welfare theory either. Octroi had to be abolished to counter the impression that the Badal Government was pampering the rural populace at the cost of the urban. "The ill-conceived populism has earned us more illwill than goodwill," admits Finance Minister Kanwaljit Singh.

Badal, says Parmod Kumar, director, Institute of Development and Communication, is unable "to distinguish between productive subsidies and unproductive doles". A chink in the poll armour and debilitating for good governance, a factor that could prove decisive in the Punjab polls.