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Rural Economy, State and Public Policy
The contemporary situation of Punjab’s rural economy has been a subject of serious concern. One of the important reasons for the disappointing outcomes in the state is the proliferation of the expenditure heads of public outlays by successive governments at different levels. Further, the rural sector has consistently lost its importance in the state’s public outlays, with a progressive diversion of public spending on the rural sector towards local-level administration, bypassing key sectors of rural development such as human resources development. This aspect has been a major driver of the unending rural crisis in the state. The evolving levels and patterns of the public expenditure on the rural sector over time are examined.
After its establishment as a new state in 1966, Punjab, or popularly the Punjabi Suba, evidenced a proactive role played by the Indian state to initiate rural development, and institutional and infrastructural development programmes. Especially a new technocratic-institutional model of agricultural development was initiated from the Third Five Year Plan onwards. This phase can be recognised as a model of state-led development where various institutional set-ups were created to advance the economy of the state as a whole.
Throughout the history of economic advancement, the role of the state in the economic progress across nations has been a contending issue (Mukherji 2009; Borcan et al 2017). The course of economic progress and its effect on the society depend on the socio-economic orientation of the developmental state. What the state wishes to organise for meeting the requirements of contemporary social development is reflective of the political action, will, orientation and vision of the elected government. The three actors—namely the state, the market and the society—work together for a nation’s economic and social progress despite their conflict and competition, and the diversity of their orientations and perspectives therein.
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