Towards an Alternative Strategy of Economic Development in Punjab

This paper examines long-term trends in growth and structural change of the economy of Punjab. The evolution of the structure of the Punjab economy reveals that Punjab has overstayed in agriculture. This overstay is leading to economic and ecological disaster. The slowdown of the agriculture sector has impacted and stunted the growth of other sectors of the economy and resulted in the marginalization of the state’s economy relative to other Indian states. Punjab has now fallen from a top to middle income state in India and occupies seventh rank in terms of per capita domestic product. Agricultural laborers and farmers are committing suicide and poverty and inequality have returned to Punjab. Developmental institutions have become non-functional and the private corporate sector has turned its back to Punjab especially in the post-reforms period. This paper identifies factors that have hindered economic development of Punjab’s economy. The evolution of the political scenario in the state is examined to identify the cause of political apathy towards Punjab’s long-standing economic problems. An alternative strategy has been developed and preconditions are identified so that a better 21 century Punjab can be envisioned. The new strategy has the capacity to make the process of economic development increasingly inclusive and ecologically sustainable. ________________________________________________________________