Punjab was the number one state in the State Rankings as published by the India Today Group. Gradually it is being downgraded in the rankings, and is now no. 7 in the rankings. What might be the reasons behind the downgrade? Well, the reasons are many, some of which are listed below:
Terrorism in the 80s and the resultant de-industrialisation:
Till 80s, Punjab was undeniably the most successful state. It was the hub of engineering and was developing into a automobile hub. The terrorism of 80s pushed out Maruti, which had earmarked a land near Ludhiana for its plant. Many such major industrial projects were pushed out, e.g., Hero Group which owes its emergence to Ludhiana now has plants in Haryana and Rajasthan. There are no major automobile plants in Punjab now, which is a major cluster developer. Auto-mobile hubs were coming up near Nabha or Patiala but were stopped in their tracks during the 80s. The SSI industry of Batala producing world class lathes never emerged into an Engineering Hub. The steel industry of Mandi Gobindgarh, once known as the Steel City are almost all shut-down.
Even the bicycle industry in which Punjab is a leader has saturated in Punjab and new plants are coming up in Tamilnadu.
Tax Concessions to neighbouring Himachal:
Many industries of Punjab migrated to nearby Baddi or Parwanoo of Himachal Pradesh, when Himachal got income tax holidays for 10 years as incentives to entrepreneurs. The incentives were subsequently extended till 2017.
Chandigarh: The lack of economic benefits of a State Capital:
The economies of all states depend to a large extent on the economic vibrancy of their state capitals. Punjab and Haryana are the only states in India that don’t have their own state capitals. Haryana has lost nothing because it gains through proximity of New Delhi. Due to the sharing of the capital, the intellectual, cultural and political core of Punjab lives outside the Punjab; in such a scenario how is development possible? Haryana should have learnt from Andhra/ Chhatisgarh/ Jharkhand who have gained significantly from their dedicated new capitals.
Chandigarh was Punjab’s capital before its trifurcation; when Punjab was divided into 3 parts, it was agreed that Haryana will be building its new capital and Chandigarh would be just a temporary capital of Haryana. It was kept as a joint capital for 10 years till such time as Haryana developed it’s own; Haryana had plans to develop Hisar as its own new capital; however, it continues to squat on Punjab’s capital incessantly.
Not well connected to rest of India:
the state is landlocked; open to the rest of India only through a narrow corridor. Surrounded by the hills of Himachal and Kashmir, all connections with India are through the G.T.Road passing through Haryana. Any industry dependent on transportation would thus naturally prefer a location closer to the rest of India.
Distance from Ports:
Punjab is perhaps the state farthest from Sea Ports (besides J&K), thus impacting its export zone potential. The Dedicated Freight Corridor from Delhi to Mumbai does not touch Punjab. It is instead being connected through the Eastern Dedicated Freight Corridor from Ludhiana to Bengal; a project that will take more than a decade. The dedicated freight corridors to the ports could improve its prospects in due course.
Non-Porous border with Pakistan:
Trade if opened with Pakistan would have happened only through Punjab. Infact, Punjab could have been the gateway to trade with Europe, Central Asia or Iran; if not for Pakistan closing the gates for all trade. The non-porosity of Wagah border has harmed Punjab the most.
Corruption of the Political masters:
Successive governments have been seeped in corruption, it has become so institutionalised that there is little hope of getting work done in Punjab without a cut to the political masters. This also is one the main reasons for Industries rushing out of Punjab.
Alienation from India and migration:
Since 1984; Sikhs are reluctant to engage with India in many ways. They are reluctant to work in other states of India, thus denying Punjab the benefits of integration with other states. They are happier migrating out of India to Canada/USA/UK rather than work within the state. A large proportion of educated youth migrate abroad after completion of their education. Same can be said about the rural uneducated ones too, whose only dream seems to be moving to Canada.
Wounds of Partition and subsequent Trifurcation of Punjab:
Punjab has still not got over its partition in 1947. What remains today is just a truncated Punjab. Later, the trifurcation of Punjab into Haryana and Himachal has devoid Punjab of its economic muscle; it is like a handicapped person living without its arms and legs.