Debt-laden Punjab a big challenge for AAP

The Aam Aadmi Party (AAP) government has to strike a fine balance between its highly-political welfarist manifesto and the economic well-being of India's fourth indebted state. Administrating a border state is a bigger challenge than ruling Delhi, where most of the issues are in the Centre's purview and the responsibility can be blamed on the other party. AAP government has its task cut out for the next five years. ET takes a look at what the party has to deliver on:

ECONOMY

₹3.5 lakh crore -- this figure was oft quoted in the election speeches by all political parties. AAP convenor Arvind Kejriwal had accused SAD and the Congress governments of milking the state exchequer and pocketing this amount. This is the biggest challenge before the AAP government. As per the Reserve Bank of India's State Finances Report 2021-22, Punjab's debt-Gross State Domestic Product (GSDP) ratio is 42.5% -- the highest after Jammu and Kashmir, Arunachal Pradesh and Nagaland. This clearly puts Punjab as the most indebted big state in India.


AGRICULTURE AND INDUSTRY

Punjab has grown on the back of the Green Revolution. However, over the years, agricultural output has plateaued as farmers have remained stuck in the MSP-driven market of producing wheat and rice. On the other hand, manufacturing clusters, especially in the hosiery and sports goods belt, in Ludhiana, Jalandhar, Gurdaspur and Mandi Gobindgarh have seen lack of growth and closures since 2010 and the situation has worsened since demonetisation in 2016 and the two years of the Covid-19 pandemic. The neighbouring states of Haryana, Uttarakhand and Himachal Pradesh, however, have provided liberal tax regimes and incentives for small and medium industries to thrive. This has weaned away businesses from Punjab to neighbouring states.

EDUCATION

AAP's Delhi model has won it a huge mandate in Punjab. Kejriwal has promised that his party will create a Punjab within five years which will bring back the youth who have chosen Canada over India.