By Khalid Hasan

Daily Times , 12-02-05

WASHINGTON: The Pakistani Punjab comes out looking good in certain areas compared to Indian Punjab, while lagging behind in some others, notably literacy and poverty reduction, according to two new studies made by the World Bank.

A comparison between the two Punjabs was the subject of an informal presentation at the World Bank on Thursday by Ijaz Nabi, sector manager, economic policy, South Asia region. The population of Pakistani Punjab is 80 million, more than half of the country’s, while that of the Indian Punjab is 25.3 million. Their respective GDPs are $32 billion and $14.6 billion, which form 52 percent and 2.5 percent of the national GDP, while in terms of area the Pakistani Punjab is more than four times the size on Indian Punjab, parts of which were made over to Haryana and Himachal. In the former, agriculture represents 27 percent of economic activity, industry 22.5 percent and services 50.5 percent, whereas in the latter, the figures respectively are 39.3 percent, 24.6 percent and 36.2 percent. According to Nabi, in terms of overall poverty, it is 34.1 percent of the population in the Pakistani Punjab compared with only 6 percent in its Indian counterpart. The incidence of poverty is the highest in Pakistan’s southern Punjab (40.4 percent), 31.8 percent on central Punjab and 29.8 percent in the northern part.

The literacy rate in Indian Punjab is 70 percent and only 45 percent in its Pakistani counterpart, while the net primary enrolment is 94 percent and 42 percent respectively. The pattern of disparity is reflected in the three regions of Pakistani Punjab, with the southern part scoring the lowest. Gender comparison also shows Indian Punjab doing far better than Pakistani Punjab. While in Indian Punjab 35 percent of the females are employed, the figure is exactly half that in Pakistani Punjab.

As for agriculture, crop yields in the two Punjabs also vary. In Indian Punjab crop yield is 4.5 tons per hectare, compared with only 2.5 tons in Pakistan. Rice output in Indian Punjab is 5.3 tons per hectare and 3.3 tons in Pakistani Punjab. However, cotton yield in the Pakistani part if 1.8 tons per hectare as against 1.3 tons in India.

In terms of revenue Pakistani Punjab raises 6.5 percent of the national figure as against 12.6 in the Indian case. The Pakistani Punjab’s own tax revenue at 0.6 percent compares poorly with India’s 6.8 percent. Social services spending in Pakistani Punjab is 2 percent of the budget compared with 4.4 in the Indian part, followed respectively by 1.5 percent and 3 percent (education), 0.4 percent and 0.4 percent (health), 0.5 percent and 2.7 percent (economic services) and 0.2 percent and 0.4 percent (irrigation).

The study notes that no Indian state is emulating the Punjab model of development because its long-term viability is in doubt because of disturbing symptoms such as continual large-scale migration, and little foreign or out-of-state domestic investment. Indian Punjab’s “development paradox” is also evident in high level of per capita income but slow growth, high agricultural yield but heavy protection and subsidies, strong human capital but low skill-intensive growth, private prosperity coupled with public paucity, impressive human development indicators but poor gender empowerment index and, finally, poor quality of public services relative to the level of income.

The study notes that Indian Punjab has failed to live up to its potential because there is no effective political leadership and overreaching vision for the state, weakening of “rule-based governance” and weak policymaking and managerial capacity. Punjab like Tamil Nadu is the most overstaffed of the Indian states when it comes to bureaucracy and while its bureaucrats are the highest paid in the country, delivery of services is poor. There are also low tax rates and generous exemptions and little if any political support for tax reform. There is no property tax for residential houses and until recently, there was zero power and water tariff in agriculture.

Agriculture that once brought prosperity to Indian Punjab is now responsible for its “miseries”. There was a zero trend growth in rice yields during the 1990s and near zero productivity growth in the crop sector. A large farmer in the province receives subsidised power, water and price support of nearly Rs 100,000 per year. khalid hassan