Punjab has proved its Nationalism. Has India proved its federalism?…….by GPS Mann

Punjab’s case for economic justice after Partition, wars, food-security extraction and industrial neglect

In this op-ed, Gurpartap Singh Mann, former Member of the Punjab Public Service Commission, makes a forceful case for why Punjab deserves a dedicated financial and economic reconstruction package to revive its industry, restore fiscal health, and compensate the state for the extraordinary national burdens it has carried for decades.

Punjab has already proved its nationalism. It proved it in 1947, when Partition tore through its body and it still stood with India. It proved it in 1965 and 1971, when Pakistan was not a dot on a map but an army at the door. It proved it through the Green Revolution, when a hungry nation needed food and Punjab’s farmers answered. It proved it through the years of terrorism, when the state bled but the republic held. It proves it still as Pakistan continues to use drones, narcotics and radicalisation to target Punjab first.

No state should have to keep proving loyalty even after repeated sacrifices. Yet Punjab is routinely placed in the dock: its farmers blamed and lectured, its youth questioned, its fiscal stress mocked, its demands for equity dismissed as regionalism. That is not merely unfair. It is historically untruthful.

Punjab does need reform: in its politics, its agricultural choices, its subsidies and its industrial vision. But Punjab cannot reform its way out of burdens it did not choose and was never compensated for. Its crisis is the accumulated result of Partitions, frontier insecurity, Green Revolution extraction, industrial policy asymmetry, the resultants fiscal stress, unemployment leading to narcotics and migration. What Punjab now requires is a Special Economic and Federal Reconstruction Package: not charity, not appeasement, but the settlement of a national debt.

The current Union has the ability to understand and capacity to reward Nationalism. That is why the expectation

The numbers are stark

In 1970–71, Punjab’s percapita income stood at 169% of the national average. By 2023–24, it had fallen to 106.7%. Haryana : carved from Punjab in 1966, starting at 138.5% :had climbed to 176.8% over the same period. Punjab’s share of India’s GDP fell from 4.4% to 2.4%. Haryana’s GDP share now exceeds Punjab’s. Haryana’s GST collection is four times that of Punjab.

This is not a slowdown. It is a historic relative collapse.

The question is not whether Punjab made policy errors : it did. The real question is whether any other major Indian state has carried this combination of burdens: Partition’s economic amputation, a permanently hostile western border, two wars fought on its soil, a food security mandate that exhausted its groundwater, a terrorism decade, organised narcotics infiltration, industrial flight and unresolved federal grievances. Above all: a National shield to hostile neighbour.

None has.

Partition converted a gateway into a battle field

Before 1947, Punjab was India’s commercial bridge to the northwest. Lahore, Amritsar, Rawalpindi and Peshawar formed a connected economic geography; Punjab was the corridor to Central Asia. Partition severed that corridor overnight. Markets vanished. Railways were cut. A million butchered. A trading route became a militarised frontier. No compensation followed. No frontier economic package. No tradereplacement mechanism. No industrial shield for a state whose natural markets had been amputated. Punjab absorbed the shock and was asked to compete like any other state which it no longer was.

Its geography had been nationalised for India’s security. The economic cost was localised on Punjab alone.

The AttariWagah crossing could have made Punjab India’s western logistics gateway. It remains hostage to sustained hostility. Security cannot be compromised, and Pakistan sponsored terrorism is real. But Delhi must stop pretending that permanent border closure carries no economic cost. Punjab pays that cost first, and pays it continuously.

Then came a second blow in 1966. The poorly designed reorganisation of the state :from which Haryana and large parts of Himachal Pradesh were carved out :badly degraded Punjab’s economic geography and left behind unresolved territorial and river water disputes that refuse to fade. The dark years of terrorism, and many of Punjab’s current fiscal and social problems, are in no small measure a consequence of that reorganisation.

The first amputation of Punjab was in 1947. The second was in 1966.

Punjab fed India and lost its water

In the 1960s, India faced genuine food insecurity. Punjab answered the national call. Through guaranteed MSP, assured procurement and subsidised power, Union policy created the wheatpaddy system. Punjab grew what the system guaranteed it would buy. India achieved food sovereignty.

The bill was charged to Punjab’s aquifers.

Today Punjab’s groundwater extraction stands at 156% of annual recharge :the highest in India, against a national average of 61%. This is not agricultural mismanagement. It is the ecological cost of India’s food security model. Punjab did not deplete its groundwater for Punjab. It depleted it while feeding India. It got the Cancer Train, for feeding India. And yet, even as the nation ate Punjab’s wheat and rice, Punjab’s farmers were handed the blame for pollution and ecological damage, penalised for the very choices the Union policy had imposed on it. Paddy is unlikely to exit this policy framework in the near future or perhaps until Punjab exhausts its water, whichever comes earlier.

Groundwater restoration in Punjab is therefore not a subsidy. It is repayment.

Union policy pushed industry elsewhere

When Punjab most needed industrial diversification, Union policy made neighbouring states more attractive.

In 2003, Himachal Pradesh and Uttarakhand received special industrial incentive packages. The rationale may have been sound, but the effect on Punjab was severe. Industry followed incentives: Baddi and Nalagarh rose while Ludhiana, Jalandhar, Batala and Mandi Gobindgarh were left to compete against taxsubsidised neighbours. That was not market competition. It was policyinduced diversion.

The injustice was not that Himachal or Uttarakhand developed: they definitely deserved support.

The injustice was that Punjab, already carrying Partition’s costs, two wars, terrorism, border risk and Green Revolution debt, received no compensatory industrial package.

The Jammu & Kashmir precedent makes the contradiction explicit. In 2021, the Union approved a New Central Sector Scheme for Industrial Development of J&K worth ₹28,400 crore through 2037, including capital incentives, interest subvention and GSTlinked support. J&K deserved that. The objection is not to J&K’s package.

The objection is this: if hostileborder conditions justify special industrial treatment, why not Punjab?

Punjab is also a hostileborder state. It has alsosuffered wars, terrorism, narcotics infiltration, trade closure and investor hesitation. It has also carried the economic burden of India’s security geography. Yet Punjab was treated as ordinary in economic policy while being treated as extraordinary in national obligation.

That contradiction must end.

Chandigarh is a federal wound, not a solution

Punjab’s capital was built after Partition. Its continued status as a Union Territory :shared indefinitely :is not a workable arrangement. It is a wound kept open for six decades: psychological, emotional and constitutional all at once. A genuine federal settlement must transfer Chandigarh to Punjab and fund Haryana’s construction of a modern, purposebuilt capital, which is geographically more suited to it. This need not be framed as Punjab versus Haryana. Haryana also deserves a proper capital. But Punjab cannot be denied its historical claim indefinitely, and a Union that refuses to settle old federal wounds cannot ask Punjab to stop feeling hurt.

The package: precise, not symbolic

Punjab must not ask for undefined relief. It must demand a structured Special Economic and Federal Reconstruction Package, built on the logic already applied to Himachal Pradesh, Uttarakhand and Jammu & Kashmir.

Industrial revival: A 10year incometax holiday for new and substantially expanded industrial units :100% exemption for the first five years, partial, reducing exemption thereafter. A GSTlinked investment incentive, structured on the J&K model, with higher caps for border districts to encourage geographical spread through the state.

Capital and credit: A 30% capital investment subsidy statewide and 50% in notified border districts, covering manufacturing, food processing, defence, cold chains and logistics. Interest subvention for new investment and workingcapital support for MSMEs.

Land and entry costs: Full stampduty and landregistration refund for industrial investment. Land cost is among the first barriers to new enterprise; lowering it is a precondition for revival.

Logistics and freight: Freight subsidy, rail freight reimbursement and export logistics support to offset Punjab’s structural disadvantage from western border closure.

Employment: EPF support, apprenticeship subsidy, wage support for hiring Punjab youth, and dedicated incentives for women’s employment and rural youth employment.

A central anchor: At least one large central PSU or national manufacturing installation : in defence, railways, drones, agrimachinery, renewable energy or bordersecurity technology : preferably located in the border belt. A major PSU is not merely one factory. It creates vendor networks, MSMEs, skills, townships and downstream industry. Punjab needs such an anchor.

Federal settlement: Transfer of Chandigarh to Punjab, with Union funding for Haryana’s new capital. Finance Commission reform to account for frontier burden, foodsecurity contribution and ecological depletion.

A National Groundwater Restoration Mission funded by the Union. The Modi’s Governments bold stand on Indus Water treaty, building massive irrigation and power infrastructure to channelize water from Jhelum and Chenab down to Ravi and Beas is plausible. Punjab will definitely benefit.

A cropdiversification guarantee with real income support for farmers shifting away from paddy. I am not touching MSP, because it needs tobe debated. Narcotics response treated as national security, not merely state policing. A longterm WagahAttari tradereadiness plan so Punjab can again function as India’s western gateway when security conditions permit. The emotional religious can be calmed through suitable sympathetic actions. That apart, the revival of economy is the foremost requirement.

What this is, and what it is not

This is not regionalism. It is not appeasement. It is not political blackmail. It is not begging.

It is federal arithmetic.

Punjab has fed India, fought for India, guarded India and absorbed India’s worst structural shocks. It has lost water, industry, trade routes, youth and fiscal room; all for the Nation. A Union that extracts continuously from a state and then attributes that state’s exhaustion to its own failures is not practising federalism. It is practising evasion.

Punjab has proved its nationalism enough.

Now India must prove its federalism.

A special economic package for Punjab is not a favour. It is the minimum act of justice owed by a nation to the state that has been its shield, its granary and its first line of defence.

June 3, 2026