For the poll-wary politicians in Punjab populism is a tempting short-cut. So even though the Lok Sabha elections are still a year away, the Amarinder Singh-led Congress Government is nervous about the political cost of implementing its reforms-centric agenda. Wary of antagonising voters and hobbled by the party high command's fiat on going slow on unpopular decisions, the chief minister has opted for a serial reversal of revenue-saving moves, earning the derisive appellation of a "rollback regime".

Less than five months after the state budget declared a string of measures to arrest the state's fiscal decline, nothing has really changed. Instead of slashing the soaring cost of governance, the Government has written off the Rs 500 crore that it planned to mop up in annual revenues and savings to put the state's economy back on the track.

NO PLOUGH-BACK: A helping hand to farmers won't pay off in the long run

The latest in the rollback spree was the withdrawal on September 22 of the 100 per cent hike in fees of professional courses of the Punjabi University, Patiala. The Government will now give a consolidated grant of Rs 2.18 crore to the university to compensate the rollback. This follows on the heels of the neutralising of the 50 per cent hike in sales tax on armed forces canteen items which could have netted Rs 75 crore annually. The move was aimed at mollifying defence personnel, a tribe the chief minister belongs to. Acknowledging "large-scale leakage" of sales tax on CSD items, he justified the reversal saying, "It's the least we can do for them."

Bureaucrats are flummoxed by the frequent volte face on policy decisions. In fact, some of the ministers have been blaming Finance Department officials for "misleading" ministers. At a cabinet meeting on September 11, some ministers lashed out at the department for recommending slashing of expenditure. The officials, however, attribute the muddle to the ministers' "doublespeak". "They endorse harsh fiscal steps in the meetings but sing a different tune in public," says a senior official.

The flip-flop on the withdrawal of the Non-Practising Allowance (NPA) for government doctors is a telling instance. The Cabinet decided to discontinue the NPA a month ago, saying it would save Rs 60 crore a year. But protests by the doctors forced it to scale down the figure to Rs 28 crore and then to restore the status quo ante. Similarly, after a public outcry last month, the Government beat a hasty retreat on its decision to impose a tenfold across-the-board hike in college fees.

In a bid to placate the peasantry that has traditionally sided with the Shiromani Akali Dal, the Government was quick to roll back its decision to impose tax on diesel, fertilisers and pesticides which would have fetched Rs 320 crore a year. The farmers want Amarinder to keep his promise of a 30 per cent bonus on the paddy procurement. And while the proposed sales tax of 4 per cent on yarn was halved after the industry protested, the tax proposal on telephones is yet to be enforced. The Government has also developed cold feet on implementing a new formula on commutation of pension which would mean an annual saving of Rs 70 crore. This, despite Punjab having a tax-to-GDP ratio of 6 per cent, the lowest in India.

Keen to improve Amarinder's report card in the run-up to the Lok Sabha polls, the high command is not only keeping close tabs on the implementation of the poll manifesto promises, but is also making populism-loaded interventions. Soon after coming to power, the Government had discontinued the previous government's fund-guzzling "Shagun" scheme, in which Rs 5,100 was given to Dalit girls at their wedding. But to woo the Dalits, the old scheme has been resurrected under a new label, "Ashirvaad", side-stepping the Rs 40 crore backlog in the old scheme.

That political exigencies are compelling Amarinder to jettison his reforms is best illustrated by the wholesale appointment of chairpersons and directors to the state's bleeding 40-odd boards and corporations. While the Government has been talking of disinvesting in PSUs, the appointments have relieved Amarinder of the pressure to "adjust" the MLAs and other partymen.

Little wonder then that while the Government has slipped on fiscal reforms, an improvement in the state's financial health remains improbable. The state has a daily liability of Rs 30 crore, including Rs 15 crore as salary bill, Rs 10 crore as interest on loans and Rs 5 crore on other expenses. However, the daily revenue receipt is Rs 22 crore, which leaves a daily shortfall of Rs 8 crore and amounts to a staggering annual deficit of Rs 3,000 crore.

Wary of resorting to tough options, the state has been taking the easy route of dipping into the food credit pool and diverting Central funds to tide over the financial crisis. "We have shut our eyes to hard alternatives," says state Finance Secretary K.R. Lakhanpal. Amarinder himself confesses that the state has no money to pay salaries. He blames Delhi for this financial mess, and his anti-Centre rhetoric is becoming shriller. In an unusual move, he even led a farmers sit-in in Delhi last week.

Despite the empty coffers, politicians have presented themselves a bonanza. While a fourfold hike in salaries and pensions of ministers and MLAs means an annual liability of Rs 15 crore, the Government shells out Rs 6 crore a year as income tax on these salaries. Renovation of the bungalows of the chief minister and his cabinet colleagues cost Rs 2 crore. Amarinder's flying bill alone has come to Rs 6 crore in the past 18 months. Another Rs 6 crore has been spent on providing Qualis cars to MLAs and Ambassador cars to ministers. Taking a cue, Governor O.P. Verma has suggested acquiring a Mercedes-Benz worth Rs 37 lakh, leaving the Finance Department in a fix.

Soon after his return from the Inter-State Council meet recently, Amarinder berated the Centre for discrimination and made a case for more financial powers for the states. "There is no money with the municipal authorities to even replace tubelights in Amritsar," he said. But then reversing unpopular decisions and splurging with abandon are the antithetical to the remedy he has been prescribing for Punjab.