Working Paper 3 / 2010

AFFLUENCE, VULNERABILITY & THE PROVISION OF

SOCIAL SECURITY: ASSESSING STATE’S CONCERN FOR
THE VULNERABLE MASSES IN INDIAN PUNJAB

Varinder Jain

August, 2010

CDS-ASSR PROJECT ON
MONITORING THE IMPLEMENTATION OF SOCIAL SECURITY
FOR THE WORKING POOR IN INDIA'S INFORMAL ECONOMY

CENTRE FOR DEVELOPMENT STUDIES (CDS)

THIRUVANANTHAPURAM, KERALA (INDIA)

&

AMSTERDAM SCHOOL OF SOCIAL SCIENCE RESEARCH (ASSR)

AMSTERDAM (THE NETHERLANDS)
The papers in this series are intended for wider dissemination
and discussion. They can be downloaded from
http://www.hivos.net

August, 2010

This work is an outcome of the research project being coordinated by

Professors Jan Breman and KP Kannan and supported by HIVOS, The
Netherlands. The opinion expressed are those of the authors only and do not
necessarily represent the views of the coordinating institutes and the funding
agency
 AFFLUENCE, VULNERABILITY & THE PROVISION OF SOCIAL SECURITY
ASSESSING STATE’S CONCERN FOR THE VULNERABLE MASSES IN INDIAN PUNJAB
Varinder Jain1
This study reveals Punjab state’s apathetic approach towards protecting the
vulnerable masses. By bringing in the context of state’s affluence and the pervasive
vulnerability across agricultural and non-agricultural segments, it portrays a
situation that could have led to the emergence of a sound social security system in the
state. However, an observation of the minimal social welfare effort made by the state
in terms of its policy and expenditure encourages us to unveil the nature of politico-
social dynamism in the state. By doing so, we learn that neither the political power
structure is concerned about the plight of vulnerable masses nor the society can
pressurise the state collectively, due to inherent religious, caste, class and political
conflicts, for instituting a sound social security system.

1. INTRODUCTION
Till recent past, the state of Punjab with its agriculture-based model of economic growth has
been at the forefront due to its remarkable economic attainments. Owing to the growth in its
primary, secondary and tertiary segments and a decline in the decadal growth rate of
population, the post-reorganisation phase has witnessed a rising trend of state’s per capita
income not only in absolute sense but also in a relative comparison with other major states –
till 2001-02, the state of Punjab has consistently maintained its highest position (Table A1).
Such economic prosperity has also got reflected in the high levels of monthly per capita
consumer expenditure over various quinquennial surveys of household consumer expenditure
conducted by the National Sample Survey Organisation (NSSO) (Table A2). Moreover, a
very low level of absolute poverty corroborates the affluence attained by the Punjab state
since its reorganization (as discussed in section two).

However, the economic growth process being largely exclusionary and inequitable has left a
vast set of masses as vulnerable and poor, at least in a relative sense. The incidence of
vulnerability is pervasive across both the agricultural and the non-agricultural segments (as
discussed in third section). The experience of economic affluence on the one hand and a vast
set of vulnerable masses on the other portray a situation that could have led, in a democratic
set-up, to the emergence of a welfare state with sound social security system (some
arguments are discussed in section four). But, has it been so? Could the state in Punjab
provide some sort of social security cover to its vulnerable masses? How effective has it
been? How sound has been its policies and institutional structure as far as the question of
protecting the vulnerable masses is concerned? are some of the questions that arise at the very
outset of observing the simultaneous presence of affluence and vulnerability in the state. We
explore these questions (in section five) by not only appraising the existing social security
policy framework but also evaluating the (absolute and relative) magnitude of social welfare
effort made by the state since 1980-81. The subsequent section (six) is devoted to outline the
forces shaping the limited social welfare effort made by the state and the final section
provides a few concluding remarks.

1 This paper is an extended version of the political economy analysis (published as Jain, 2009) that I did in my
doctoral thesis to explain the factors behind state’s lack of concern for the vulnerable masses. I am very much
thankful to my supervisors, Prof. K.P. Kannan and Dr. N. Vijayamohanan Pillai for their guidance throughout
my research. I am solely responsible for the errors, if any.

1
2. STATE OF AFFLUENCE IN PUNJAB’S ECONOMY
2.1. A Brief Sketch of Economic Situation before State’s Reorganisation
Being the location of the Indus Valley Civilisation, the Greater Punjab had gained
significance since the historical times. The passage of five perennial rivers (Jhelum, Chenab,
Ravi, Sutlej and Beas) and the availability of vast fertile plains had remained to the advantage
of this region. Being the last state to be annexed by the British in 1849, it remained relatively
less vulnerable than other regions in India to the plunder and exploitation; rather it got
benefitted from the development of canals and railway networks during the British rule
(Paustian, 1930; Calvert, 1936). Consequently, there took place commercialisation of
agriculture at a significant scale.2

However, the agricultural surpluses were largely squeezed by the British. Besides frequent
hikes, the inelasticity of land revenue to market fluctuations and bad harvest resulted in the
mortgage of agricultural land at a significant scale – a phenomenon that forced the British to
enact the Punjab Alienation of Land Act, 1901 for preventing the non-agricultural classes
from owning the agricultural land.3 However, the dependency on loans continued but with a
substitution of village money-lender by rich landlords. Thus, there took place accumulation
of (whatever limited) agrarian surplus within the agricultural sector, and thereby the
enhanced prosperity of the countryside – a fact, quite contrary to the experience of states like
Bengal (Mukherjee, 1985). There also took place growth in commerce and industry. It is said
that at the eve of independence, the Greater Punjab was a well balanced economic region
possessing economic resources in such a way that every sub-region was vital for the
prosperity of the other (Vakil, 1950).

The sad shock of partition (in 1947) led to the bifurcation of this Greater Punjab. The Indian
side came to be known as ‘East Punjab’ and the Pakistani side was called ‘West Punjab’. In
this bifurcation, the East Punjab remained at disadvantage as a large part of the irrigated area
under canal colonies went to the share of West Punjab. The East Punjab got only three
million canal irrigated acres out of a total of over fourteen million acres. The soil quality of
the land in East Punjab was not that good. Moreover, the refugee farmers had to bear a net
loss of about two million acres of land. Similarly, the Hindu merchant class and industrialists
had to lose their generations-long sunk capital in industrial plant and machinery. By one
estimate, the non-Muslims had lost 400 industrial units (valued at Rs. 40 crores) in the
industrial centres of Rawalpindi, Sialkot, Lahore, Wazirabad and Gujranwala (Rai, 1965:
137). There were very few who could bring some wealth with them, otherwise a majority had
to run bare-handed escaping their lives amidst bloodshed.

The partition left East Punjab as the economically backward region with an additional burden
of rehabilitating 2.46 million refugees (GoP, 1950). The damage caused had been so wide
and rampant that it was not possible to rehabilitate the dislodged economy without strenuous
effort of the state. Both the state and the central government charted out effective strategies
and as a result, the economy of East Punjab started attaining recovery. Its industrial economy
regained and there appeared a large number of (small-scale) industries in no time. But, there
came another blow due to state’s reorganisation on linguistic basis in 1966 and as a
consequence, the state lost the developing industrial complex around Delhi to Haryana
besides losing (whatever limited) mineral and forest resources to either Haryana or Himachal
Pradesh.

2 Banerjee (1982: 47-76) provides a detailed account of the growth of commercial agriculture in Punjab during
the British rule.
3 A background to this Act is provided in Thorburn (1886).

2
2.2. Economic Attainment since State’s Reorganisation
There has been some coincidence in the time of state’s reorganisation and the advent of
Green Revolution – a phenomenon by which there has taken place a voluminous rise in the
output of wheat and rice. The adoption of high yielding variety (HYV) seeds at a large scale
coupled with an extensive programme of land consolidation and land reform, vast expansion
of rural roads and the rural electrification, provision of short-term credit etc. shaped the
success of the Green Revolution in the state.

It is pointed out that the production of wheat increased from 1.9 million metric tons in 1965-
66 to 5.62 million metric tons in 1971-72. Afterwards, it remained stagnant during the 1972-
75 period leading to the argument that the new varieties have reached their biological limits.
But, the production of wheat again rose to “5.8 million metric tons in 1976, 6.4 million in
1977, 6.64 million in 1978, 7.43 million in 1979 and to a record 7.9 million metric tons in the
summer of 1980” (Gill, 1983: 832). Similarly, the production of rice increased from 2,90,000
metric tons in 1966 to 6,80,000 metric tons in 1970-71, which again rose to 9,20,000 metric
tons in 1972, 1.45 million tons in 1976, 1.77 million in 1977, 2.5 million in 1978, 3.1 million
in 1979 and 3.06 million in 1980.

On the whole, the agriculture sector grew by 2.87 percent per annum during the 1970-71 to
1979-80 period. The growth in the agricultural sector had been the highest during the 1980-
81 to 1989-90 period. Other primary sub-sectors such as forestry & logging, fishing, mining
& quarrying recorded relatively fast growth for most of the time period under consideration
but they could not emerge as the major sectors due to the dominant position of the
agricultural sector in state’s NSDP.

TABLE 1: EXPONENTIAL GROWTH RATE (%) OF PUNJAB’S ECONOMY SINCE 1970-71

1970-71 to 1970-71 to 1980-81 to 1990-91 to 2000-01 to
  2007-08 1979-80 1989-90 1999-2000 2007-08
Primary Sector (A+B+C+D) 3.36 2.88 4.37  2.92  3.12 
A. Agriculture 3.32 2.87 4.49  2.87  2.91 
B. Forestry and Logging 5.47 5.16 ‐3.51  3.58  19.57 
C. Fishing 11.97 5.33 16.12  12.79  4.09 
D. Mining and quarrying 5.56 -5.99 4.59  0.01  14.05 
Secondary Sector (E+F+G) 5.30 8.11 6.89  4.55  6.03 
E. Manufacturing 5.49 9.94 8.29  3.89  4.49 
F. Construction 4.59 3.20 3.75  4.56  12.54 
G. Electricity, gas and Water supply 6.53 17.34  7.03  10.15  ‐7.02 
Tertiary Sector (H+I+J+K+L+M) 5.91 7.83  5.65  5.96  5.34 
H. Transport, Storage and communication 5.92 6.49  8.50  9.13  6.53 
I. Trade, Hotels and Restaurants 4.92 9.33  6.03  1.26  6.61 
J. Banking and Insurance 7.95 9.21  7.62  8.62  5.77 
K. Real estate ownership of dwellings &
Business services
7.09 2.93  ‐1.39  12.30  ‐0.29 
L. Public Administration 7.34 3.51  7.22  8.49  4.54 
M. Other Services 6.15 7.12  5.38  8.75  4.45 
Net State Domestic Product 4.64 5.24 5.29 4.34 4.68
Source: EPWRF (2003) and http://mospi.nic.in/

3
Owing to the multiplier effects, the agricultural growth contributed to the expansion of other
sectors like manufacturing, services etc. It is pointed out by studies like Bhalla (1995) that the
increasing use of new agricultural technology stimulated the demand for intermediate inputs
like fertilizers, pesticides, power, diesel, capital goods (like electric motors, diesel engines,
tractors, threshers, etc.) and other consumption goods. In response to this newly emerging
demand, there emerged vibrant engineering and hand-tool industries. There also emerged
industries processing agricultural products. Similarly, increasing per capita income levels of
large rural population provided a push to all sorts of consumption goods industries. The food
processing industries like dairying, grain mills, edible oil manufacturing, breweries and
beverage industry recorded rapid expansion. Similarly, a big spurt had taken place in the
production of textiles and durable consumer goods like sewing machines, radios, bicycles,
television sets etc.

Consequently, the manufacturing sector recorded the highest exponential growth rate of 9.94
percent in the period just immediate to the advent of Green Revolution, i.e. 1970-71 to 1979-
80 (Table 1). Despite the ruinous impact of phase of militancy and religious fundamentalism
in the state in the 1980-94 period, the manufacturing sector made significant growth but in
the subsequent periods, it did not reveal much encouraging performance. Similarly, various
sectors falling in the category of services also recorded a significant growth over the period
of time. As a result, there took place a decline in the contribution of the primary sector from
58.36 percent in 1970-71 to 35.73 percent in 2009-10. Similarly, the share of the secondary
and the tertiary sector has increased with the latter recording relatively high increase over the
period of time (Figure 1).

Figure 1: Sectoral Composition of Punjab’s Net State Domestic Product since 1970-71

60

50

40

30

20

10
1970‐71

1972‐73

1974‐75

1976‐77

1978‐79

1980‐81

1982‐83

1984‐85

1986‐87

1988‐89

1990‐91

1992‐93

1994‐95

1996‐97

1998‐99

2000‐01

2002‐03

2004‐05

2006‐07

2008‐09

Primary Secondary Tertiary

Note: Primary includes Agriculture, Fishing, Forestry & Logging and Mining & Quarrying; Secondary
includes Manufacturing, Construction, Electricity, Gas & Water Supply; Tertiary includes Transport,
Storage & Communication, Trade, Hotels & Restaurants, Banking & Insurance, Real Estate & Ownership
of Dwellings, Public Administration and Other Services.
Source: Same as Table 1.

4
The overall rate of growth of Punjab economy has remained positive since state’s
reorganization. It has been the decade of 1990s where a decline in the growth rate led
scholars to hint at the deceleration of economic growth in Punjab (Ahluwalia, 2000; Singh
and Singh, 2002). Though the performance of the Punjab economy in the subsequent decade
improved in absolute terms, it has been much unsatisfactory in relative comparison to other
major Indian states. In fact, during the post-1990 period, most of the states recorded relatively
fast growth than the Punjab economy – as a consequence of which, the rank of NSDP growth
of Punjab economy declined to 13 in the decade of 1990s and subsequently to 17 in the 2000-
01 to 2007-08 period (Table 2).

TABLE 2: EXPONENTIAL GROWTH RATE (%) OF REAL NSDP ACROSS STATES

1970-71 to 1970-71 to 1980-81 to 1990-91 to 2000-01 to
States 2007-08 1979-80 1989-90 1999-2000 2007-08
Gr (%) R Gr (%) R Gr (%) R Gr (%) R Gr (%) R
Andhra Pradesh 5.35 4 3.17 8 5.15 5 5.13 9 7.77 6
Assam 3.31 17 2.61 13 3.26 15 2.17 17 4.71 16
Bihar* 3.45 15 2.94 12 4.63 11 2.58 16 6.87 10
Gujarat 5.63 3 4.58 4 4.72 8 7.68 1 10.46 1
Haryana 5.73 1 4.71 3 6.07 1 4.60 11 8.88 3
Himachal Pradesh 4.92 7 3.05 9 4.44 13 6.02 7 6.63 11
Jammu & Kashmir 3.69 14 4.27 5 1.93 17 4.54 12 5.12 15
Karnataka 5.24 5 4.16 6 5.13 6 6.84 2 7.39 7
Kerala 4.25 11 1.71 16 2.54 16 5.69 8 8.45 4
Madhya Pradesh* 4.08 12 1.12 17 3.51 14 4.91 10 5.86 13
Maharashtra 5.70 2 5.60 1 5.42 3 6.66 3 7.82 5
Orissa 3.45 15 2.37 15 4.68 9 3.94 14 8.94 2
Punjab 4.64 10 5.24 2 5.29 4 4.34 13 4.68 17
Rajasthan 5.14 6 2.99 10 5.77 2 6.32 5 7.33 8
Tamil Nadu 4.70 9 3.38 7 4.87 7 6.21 6 7.13 9
Uttar Pradesh* 4.07 13 2.58 14 4.67 10 3.43 15 5.24 14
West Bengal 4.90 8 2.97 11 4.48 12 6.63 4 6.19 12
Note 1: The exponential growth rates are estimated with regression function, ln Y = a + bt
Note 2: * implies that from 1993-94 onwards, Real NSDP of Bihar, Madhya Pradesh and Uttar Pradesh is
inclusive of the values for Jharkhand, Chattisgarh and Uttarakhand respectively.
Source: Same as Table 1

Nonetheless, what is of relevance from the purpose of this study is the fact that with a
declining growth rate of population,4 the economic attainments of the Punjab economy
resulted in rising per capita income. It is found that the state of Punjab has maintained its
highest rank in terms of per capita income till 2001-02. During the 2002-05 period, it
remained at the second rank but in the recent years, it is found at the fifth rank and is
overtaken by states like Haryana, Maharashtra, Kerala and Gujarat (Table A1).

Similar to the per capita income, the figures on monthly per capita expenditure also hint at
the relative affluence of the Punjab economy. As revealed by NSSO’s surveys on consumer
expenditure, both the rural and urban segments of Punjab have retained the highest ranks.
But, during the last decade, the relative position of the urban sector deteriorated whereas the
rural segment still enjoys the second position (Table A2).

4 The decadal growth rate of population has been 23.9 percent, 20.8 percent and 20.1 percent respectively over
the three decades beginning since 1971.

5
2.3. Magnitude of Revenue Mobilisation by the State
Amidst this affluence, in spite of the non-taxation of the agricultural income that constitutes a
large proportion of the net state domestic product, the state could mobilize its tax revenue and
non-tax revenue from various sources such as the taxes on property and capital transactions,
taxes on commodities and services, share in central taxes, own non-tax revenue and the grants
from centre. It is found that during the 1980-90 decade, Punjab state’s revenue as percentage
of its GDP has remained at the lowest level than other states. Somewhat similar pattern has
been revealed by the growth rate of its total revenue when it remained lower than that
recorded by the states of Haryana, Maharashtra and Gujarat. In terms of revenue buoyancy,
Punjab’s performance has remained worse than all states during this decade except Tamil
Nadu.

During the 1990-2000 decade, the ratio of total revenue to state GDP has improved from its
average level during the earlier decade. Its total revenue, during this decade, has risen at the
growth rate of about 4 percent with the buoyancy of 0.77. Such revenue performance seems
to be somewhat satisfactory in comparative interstate analysis. Though a glance at the ratio of
total revenue to the state GDP and the growth rate of total revenue has not revealed such
robust performance of the Punjab state but when we consider the aspect of revenue buoyancy,
Punjab has emerged as one of the better performing states. Though during the 1990s, all the
states have witnessed a decline in their revenue buoyancy, the decline has not been that sharp
in the case of Punjab which reveals that the state has enjoyed better revenue mobilisation
during this decade. Moreover, Punjab has remained only next to Haryana in this aspect.

TABLE 3: REVENUE GENERATING CAPACITY OF PUNJAB IN A COMPARATIVE PERSPECTIVE

Punjab Haryana Gujarat Maharashtra Tamil Nadu
Total Revenue As Percentage of State Gross Domestic Product
1980-90 11.54 14.81 14.07 14.02 15.85
1990-2000 12.44 15.09 12.56 11.01 13.66
2000-2008 13.58 12.49 11.76 11.53 14.11
Trend Growth Rate (Percent) of Total Revenue
1980-90 4.97 7.44 6.67 6.77 4.67
1990-2000 4.01 4.74 6.29 4.20 4.01
2000-2008 7.23 11.29 7.68 10.01 10.27
Revenue Buoyancy
1980-90 0.93 1.17 1.12 1.15 0.90
1990-2000 0.77 0.80 0.74 0.56 0.48
2000-2008 1.48 1.26 0.74 1.25 1.44
Note 1: Growth rates are ‘trend’ growth rates and are computed after deflating total revenue by state gross
domestic product deflators (base 1999-2000) for the respective years.
Note 2: Revenue buoyancy is the ratio of the growth rate of real total revenue and real state gross domestic
product (base 1999-2000).
Source: EPWRF (2004) and Reports on State Finances, published by the Reserve Bank of India

The revenue generating capacity of Punjab has gained further boost during the post-2000-01
period when the ratio of total revenue to the state GDP has improved to a considerable extent
which has placed Punjab at the top among these states. In terms of growth rate of total
revenue, the state has recorded somewhat similar pattern but in this respect, it has got the
second position. Nevertheless, in terms of revenue buoyancy, it has attained the top position.
Its revenue buoyancy during the period 2000-08 has remained as high as 1.48. Clearly, such
high revenue buoyancy along with a high ratio of total revenue to the state GDP during the
current period leaves little doubt that there is a scarcity of revenue with the Punjab state;
rather it enforces the fact that the revenue profile of the Punjab state is much sound. It
receives not only a high proportion of its GDP as its revenue but also its revenue generating
capacity has remained sound and sustainable over the period of time.

6
3. OTHER SIDE OF GROWTH: PERVASIVENESS OF VULNERABLE LIVELIHOODS
However, the fruits of economic growth were not shared equally by the masses. Many more
became vulnerable in the due process of economic growth. We discuss their plight across the
agricultural and non-agricultural segments.

3.1. Livelihood Vulnerability in Agricultural Segment

It is noteworthy that the process of Green Revolution has induced certain changes in
agricultural society that in one way or the other have contributed to the vulnerability of
masses dependent on agriculture. In its initial stages, the Green Revolution has benefited all
sections of the peasantry as the viability of even the small farms has increased (Saini, 1976).
But, over the period of time, the cultivation process has become more capital-intensive due to
rising input cost. These have been the farmers with large land holdings, who could borrow
easily and thereby have had access to this technology but the small and marginal farmers
have remained, to a large extent, unable to do so due to their limited access to credit. The
increasing non-viability of small farms due to declining productivity of agriculture added
further to their woes (Bhalla and Chadha, 1982a; 1982b).

The available statistics on asset ownership indicate the presence of severe inequality in
Punjab’s agriculture. For example, the 59th Round of the National Sample Survey
Organisation (NSSO) point out that only 9 percent of the rural cultivating households own 45
percent of the assets whereas the assets owned by 76 percent of the households constitute
only 24 percent of total assets.5 Such inequality in asset ownership is related to the earnings
from crop production (Chopra, 1984). Land is the major asset and the distribution of
operational land holdings assumes significance per se. We depict this distribution pattern in
Figure 2, from which it becomes clear that there has arisen large inequality in the ownership
of land. The share of farmers having operational land holdings below one hectare which was
about 38 percent in 1970-71 got reduced to about 12 percent in 2000-01 whereas the share of
farmers having more than 2 hectares of land has increased.

FIGURE 2: DISTRIBUTION OF OPERATIONAL LAND HOLDINGS IN PUNJAB

Source: Agricultural Census, Punjab: 1970-71, 1990-91, 1995-96, 2000-01

5 Based on Table 8R (pp. A - 166) of NSSO (2005a).

7
Besides asset and land ownership, another indication for the prevalence of vulnerability in the
agricultural segment is made by the share of cultivators in agricultural workforce, which has
declined from 67.9 percent in 1971 to 58.1 percent in 2001 (GoP, 2006: Table 3.11), thereby
resulting into an increase in the share of agricultural labour. Though one may attribute such
an increase in labour to the inflow of migrants, it is difficult to deny in the light of above
evidence on land inequality that there has arisen a new class who has lost land and is working
as agricultural labour.

Similarly, the distribution pattern of the outstanding debt also provides some insights about
the marginalisation of peasantry in Punjab’s agricultural segment. It is pointed out by the
NSSO’s Situation Assessment Survey of Farmer Households that in 2003, out of total farmer
households having outstanding debt, about 35 percent belong to the category of farmers
having less than 1 hectare of land. A consideration of the purpose and source of loan reveals
that a large part of the loan taken by marginal and small farmers is for consumption purposes
and ceremonies like marriages. It is also pointed out that a majority of these farmers do not
have access to institutional sources of credit and they have to rely on non-institutional sources
of credit (mostly, money-lenders and traders).6 Such inferences have also been revealed in a
study by Gill (2004). This study points out that the agrarian credit markets in Punjab are
interlinked which contributes towards the exploitation of marginal and small farmers.

Besides the cultivating class, evidence on the plight of agricultural labour is also available.
Most of this literature has remained focused on migrant workers.7 It is revealed that the
migrant labour has to face exploitation not only in terms of working conditions but also in
terms of remuneration. There are even the instances when it is turned into bonded labour. A
few studies like Rangi et al. (2004) have pointed out an increasing incidence of casualisation
of Punjab’s agriculture. Similarly, Singh and Singh (2006) finds Punjab’s agricultural labour
as economically vulnerable.

3.2. Livelihood Vulnerability in Non-Agricultural Segments

Unlike agriculture, there is not much research work available, in Punjab’s context, for other
non-agricultural segments like construction, transport, trade, hotels, community services etc.
However, the NSSO’s quinquennial rounds reveal that these segments employ not only a
large proportion of workforce but their share of workforce has increased over the period of
time.

Nevertheless, by an analysis of the 61st round of NSSO, we observe that a large proportion of
the employment generated by these segments bear such characteristics that no one can deny
their exposure to vulnerability. About 22 percent of the workers are casual and about 33
percent are own account workers including both home-based and non-home-based workers.
Both of these workers experience vulnerability in one way or the other. Though this data-set
does not provide much information to explore further the nature of vulnerability experienced
by these categories of employment, it provides information about the nature of contract
between the worker and the employer, duration of wage receipts, access to paid sick leave
and social security benefits. By these indicators, it has been found that about 72 percent of the
workers are working without any (written) contract with their employers. About 25 percent
are receiving their wage payments on daily basis. About 62 percent do not have any access to
paid sick leave and about 69 percent do not receive any kind of social security benefit (see,

6 As per Table 2 (pp. A-76) and Table 3 (pp. A-91) of NSSO (2005b).
7 A few of the available studies in this respect are Oberai and Singh (1980), Grewal and Sidhu (1981), Singh
(1997) and Sidhu and Rangi (1998).

8
Table 4). But, we get a varied picture when we look across different sectors. It has been
found that the construction sector generates a majority of the casual employment.

TABLE 4: EMPLOYMENT QUALITY INDICATORS IN PUNJAB’S NON-FARM SECTORS, 2004-05

Transport, Electricity, Financial, Real
Trade &
Construction storage & gas & water Estate & other All
Hotels
communication supply services
R 94.5 87.2 28.2 88.8 37.5 77.8
No U 89.0 72.6 17.6 90.4 49.7 64.6
Written Job Contract

T 93.4 79.3 22.3 89.8 45.5 71.5

R 2.2 2.5 0.8 1.4 4.1 2.5
1 year or
U 0.0 0.6 2.1 1.2 0.9 0.9
less
T 1.8 1.5 1.5 1.3 2.0 1.7
R 0.4 0.0 0.0 0.3 0.4 0.3
1 - 3 years U 0.0 0.8 0.0 0.4 3.6 1.8
T 0.3 0.4 0.0 0.4 2.5 1.0
R 2.9 10.3 71.0 9.4 58.0 19.4
>3 years U 11.0 26.0 80.4 8.0 45.9 32.7
T 4.5 18.7 76.2 8.5 50.0 25.7
R 9.8 71.7 96.7 66.3 94.8 45.7
Monthly U 25.1 85.6 96.1 88.9 93.3 82.6
T 12.7 79.2 96.4 80.6 93.8 63.3
Duration of Wage Receipts

R 3.8 3.2 0.0 4.5 0.0 2.8

Weekly U 2.3 0.0 0.0 0.0 0.3 0.4
T 3.5 1.5 0.0 1.6 0.2 1.7
R 67.6 9.5 0.8 21.1 1.9 38.3
Daily U 50.0 9.2 3.9 5.0 4.7 11.3
T 64.3 9.3 2.5 11.0 3.7 25.4
R 1.4 8.1 0.0 1.6 0.5 2.0
Piece Rate U 0.0 0.1 0.0 1.9 0.7 0.7
T 1.1 3.8 0.0 1.8 0.6 1.4
R 17.4 7.5 2.5 6.5 2.8 11.2
Others U 22.5 5.1 0.0 4.1 1.1 5.0
T 18.4 6.2 1.1 5.0 1.7 8.3
Social Security Paid Sick Leave

R 96.8 80.4 5.3 86.6 29.1 75.1

Don’t Get U 86.1 56.3 10.0 70.8 29.3 48.0
T 94.8 67.4 7.9 76.6 29.1 62.1
R 3.2 19.6 94.7 13.4 70.9 24.9
Get U 13.9 43.7 90.0 29.2 70.7 52.0
T 5.2 32.6 92.1 23.4 70.9 37.9
R 96.8 85.3 6.1 87.2 35.8 77.3
No U 91.5 70.5 10.9 91.4 38.5 59.4
T 95.8 77.4 8.8 89.9 37.6 68.7
R 3.2 14.7 93.9 12.8 64.2 22.7
Some U 8.5 29.5 89.1 8.6 61.5 40.6
T 4.2 22.6 91.2 10.1 62.4 31.3
Note: R, U and T stand respectively for rural segment, urban segment and the total.
Source: Derived from Unit-level NSSO data (61st Round, 2004-05).

The situation is relatively worse in rural areas where about 71 percent of the employment
generated by the construction sector is casual. The other segments of transport, storage and
communication also reveal a relatively high proportion of casual employment whereas the
incidence of casual employment in other segments has not been that high.

With respect to the nature of job contract, the overall situation is not much attractive as a
majority of the workforce work without any (written) job contract.8 A majority of the
employment generated by the construction sector do not have any (written) job contract.

8 Job contract assumes significance as it ensures job security to a certain extent whereas the absence of such
contract makes the workers vulnerable to the implicit threat of job loss.

9
Similarly, about 90 percent of employment generated by trade and hotels do not have any job
contract and the situation is relatively alike in both the rural and urban areas. The sector of
transport, storage and communication also provide most of the employment without any job
contract with the worst in rural areas. Though the situation in other sectors is also not much
encouraging, they may be termed as relatively better due to the fact that a majority of
employment generated by them is based on some sort of written contract.

In terms of the duration of wage receipts, we find that a majority of construction sector
workers receive wage payments on a daily basis. A small proportion of the workers in
transport / storage / communication sector also receive their wage payments on a daily basis.
The situation remains somewhat better in other sectors where a majority receive wage
payments on a monthly basis. In terms of access to paid sick leave, we do not get much
encouraging picture as a majority of the workers do not have access to paid sick leave except
the sectors like electricity, gas and water supply and financial, real estate and other services.
It is noteworthy that a large part of these two sectors belongs to the organised segment of the
Punjab economy. Consequently, the access of paid sick leave to these workers does not have
much significance when we are concerned about the quality of employment in the
unorganised segment. On the other hand, the remaining segments of construction, transport
and trade / hotels - a large part of which belong to the unorganised segment, clearly reveal
that a majority of the workers in these sectors do not have access to paid sick leave. Similar
has been the situation with respect to workers’ access to any sort of social security benefits
across these sectors.

Thus, the employment generated by these segments too bears the characteristics that leave the
workers bound to experience vulnerability in one way or the other. The construction sector
followed by transport / storage / communication and trade / hotels has emerged as the major
sector generating a majority of the insecure employment. In fact, the recruitment processes in
these segments are much more informal that trigger insecurity in various aspects of the
employment. Moreover, the working conditions in such employment are too degraded that
they have implications for the occupational health and safety of the workers. Besides wage
earnings being very low, there are limited chances of skill formation and thereby
occupational mobility in these segments. The lax implementation of labour laws aggravates
the situation.

4. ARGUMENTS FOR ACTIVE STATE ROLE

Such pervasiveness of vulnerability amidst remarkable economic attainment of the Punjab
state during the post-reorganisation period raises the expectation that the state might have
developed a sound social welfare system to alleviate the plight of its masses. Such an
expectation is deeply rooted in the democratic set-up of the Indian political system by which
the state must come forward to protect and promote the well-being of its vulnerable masses as
the notion of democracy per se implies the rule of the people, by the people and for the
people. This argument goes in line with the ‘Rights-based Argument’ as put forward by
studies like Kannan and Pillai (2007).

Besides this, the available literature also provides an economic rationale for the state to come
forward as the key agency in providing social security to the vulnerable masses. Contrasting
with the private sector, Barr (1989) urges the state to come forward primarily on the grounds
of efficiency and equity. It contends the view that the provision of social insurance in
developed countries is not merely ideological to facilitate any redistributive aims; rather it is
deeply rooted in economics as it is necessary in such cases where “private insurance markets,

10
for technical reasons, would not do at all, or would do inefficiently” (pp. 59). It argues that
for markets to provide an efficient outcome, a number of conditions concerning perfect
information, perfect competition and the absence of market failures should be met but these
conditions are met with rare exceptions and the failure of one or more of these conditions
generally make the resulting market equilibrium inefficient. In such situation, it is the state
that can provide a better alternative to ensure efficiency of outcomes.

Barr (1992) further downplays the redistribution dimension of the welfare state by arguing
that in industrialised countries, it has been the asymmetric information leading to failure of
markets for providing insurance against unemployment, medical contingencies etc. that has
led the citizens to demand public solutions from the state. This study opines that the private
provision of insurance is inherently inefficient as the would-be insured have private
information about their risk level and that bad risks may accordingly drive out good.

Guided by these arguments, an assessment of the social security provision by the state in
Punjab is made in the subsequent section.

5. STATE PROVISION OF SOCIAL SECURITY IN PUNJAB: AN ASSESSMENT

5.1. Few Insights into the Fragility of State Policy for Protecting Vulnerable Masses
Any policy framework for mitigating vulnerability has two vital constituents, viz. legislations
and the policies / schemes. Legislations emerge out of the procedures specified in the
Constitution and thereby are the commitments that bind the state to perform its asked role
whereas the policies / schemes are enacted by the respective governments in response to
various considerations such as ideology, finance, priority etc. The schemes may have a
transitional character whereas the legislations are generally permanent.

As far as the former constituent of the policy framework is concerned, it is noteworthy that
the state of Punjab has not enacted any major legislation to protect the interests of the
unorganised poor workers as done by many other states like Kerala, Maharashtra, Madhya
Pradesh etc. Generally, the nature and scope of the enforced legislations in Punjab remains
confined to only those enacted by the Central government.9

However, the state is supposed to facilitate the implementation of these legislations

effectively in its territory. But, it seems that the state has failed in this respect as well. The
Minimum Wage Act, 1948, for example, urges the payment of minimum wages to the workers
across all the organised and unorganised segments. But, as pointed out by Jain (2010a) that
the wages received by 71 percent of the unorganised manufacturing sector workers fall below
the stipulated minimum wage. The severity of the reward differential (gap between minimum
and the actual wage as the ratio of the minimum wage) is high10 for 43.6 percent of the
wageworkers. Similarly, the incidence of bonded labour in agriculture is well documented by
studies like Singh (1997) – a finding indicating the violation of the Bonded Labour System
(Abolition) Act, 1976. The studies on wage discrimination like Kapoor (1987) and Jain
(2010b) indicate nothing but the gross violation of the Inter-State Migrant Workmen
(Regulation of Employment and Conditions of Service) Act, 1979.

Similarly, there has been a lack of concern with the state to implement the Building and
Other Construction Workers (Regulation of Employment and Conditions of Service) Act,

9 The details of various labour legislations in Punjab is available at

http://punjabgovt.gov.in/punjabrti/Labour.html
10 i.e. more than 0.40.

11
1996. This Act though passed by the Central Government in 1996, took about 13 years to get
implemented in the state. At present, the state is collecting one percent cess on all public,
private and commercial construction work in the state and by one estimate, so far it has
collected Rs. 36 crore in its welfare fund. But, the labour welfare board has registered only
5000 construction workers out of about 3 to 4 lakh workers in the state (Singh, 2010).

Thus, merely having the legislation on paper does not serve the purpose; what matters is its
effective implementation because the ultimate outcomes depend on this. The required
institutional structure is already in place. There labour welfare board was constructed in the
state in 1974 under the Punjab Labour Welfare Fund Act, 1965. This board is responsible for
the implementation of various labour laws and to design various schemes for the welfare of
the working masses. But, the welfare schemes implemented has remained limited to the
benefit of the organised workforce. It has not introduced any major scheme for promoting the
welfare of unorganised workers. Moreover, by gauging the effectiveness of the labour
welfare board from the pervasiveness of vulnerability among the working masses, it seems
that the board is not playing its role effectively.

In terms of policy as well, we do not find any specific scheme to alleviate the plight of the
vulnerable masses in Punjab’s agricultural and non-agricultural segments. The state is having
some general schemes for elderly, widows, disabled, SCs, etc. Some of the main features of
these schemes are highlighted in Table 5.

TABLE 5: STATE-FUNDED SOCIAL SECURITY SCHEMES IN PUNJAB

Scheme Name Introduced in Eligibility Conditions Benefits
Age: 60 years for women & 65 years for men if
Old Age Pension Scheme 1964 Rs. 250 per person
they belong to BPL family
Financial Assistance to Widows / unmarried women < 60 years of age;
1968 Rs. 250 per month
Widow & Destitute Women Also available to unmarried destitute > 30 years
Financial Assistance to Orphans & destitute children (< 21 years) if they Rs. 250 per month per
1968
Dependent Children belong to BPL family child
Financial Assistance to Disabled with > 50 percent disability and monthly
1982 Rs. 250 per month
Disabled Persons income < Rs. 1,000
Shagun / Ashirwad > 18 years old girls of BPL SC / Christian / Rs. 15,000, limited to
-
Scheme Widow families with Punjab domicile two girls per family
Atta-Dal Scheme 2008 BPL families -
Source: Various Websites of the Punjab Government

It is noteworthy that the amount of monthly pension under State Old Age Pension Scheme is
merely Rs. 250, which is lower than the neighbouring state of Haryana. The state in Haryana
provides a monthly pension of Rs. 500 to all and Rs. 750 to widows and destitute women and
Rs. 600 to the handicapped persons. Similarly, the state in Himachal Pradesh provides a
monthly pension of Rs. 330 to the elderly, Rs. 330 to widows and destitute women and Rs.
300 to the disabled. The pension amount in the southern states of Karnataka and Tamil Nadu
are higher than Punjab.

5.2. Fragile Social Welfare Effort by State: Some Empirical Evidence

In light of the fact that Punjab has been one of the prosperous states of India, such lack of
sound social security policy framework indicates nothing but the state’s apathetic attitude
towards the vulnerable masses. As various social security policies get translated into actual
expenditure incurred for promoting welfare, we provide some empirical evidence here to
substantiate the inherent fragility in the social welfare effort made by the state.

12
In order to quantify the social welfare effort made by the state,11 we rely on the actual
expenditure statistics provided by the Reserve Bank of India’s publications on state finances.
We consider the period since 1980-81 till the latest available (2007-08). The social sector
expenditure, in these reports, is reported under twelve heads, viz. (1) education, sports, art
and culture, (2) medical and public health, (3) family welfare, (4) water supply and sanitation,
(5) housing, (6) urban development, (7) welfare of scheduled castes, scheduled tribes and
other backward classes, (8) labour and labour welfare, (9) social security and welfare, (10)
nutrition, (11) relief on account of natural calamities, and (12) others. But, these are primarily
three heads, viz. (7), (8) and (9) that are used to quantify state’s social welfare effort.

We define the social welfare effort in terms of the magnitude of the social welfare
expenditure incurred by the state vis-à-vis its gross domestic product. Since it involves a
comparison over the period of time, we have converted the social welfare expenditure figures
in real terms12 (base=1999-2000). Therefore, the social welfare effort may be denoted by the
formula:
RSWEij
Social Welfare
= X 100
Effortij RGDPij
where RSWE and RGDP stand for real social welfare expenditure and real gross domestic
product respectively and the subscripts i and j stand for year and state respectively.

FIGURE 3: SOCIAL WELFARE EFFORT ACROSS HIGH-INCOME STATES SINCE 1980-81

1.50
1.30
1.10
0.90
0.70
0.50
0.30
0.10
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08

Punja b Ha rya na Guja ra t Ma ha ra shtra Ta mil Na du

Source: Same as Table 3

In order to capture the relative performance of the Punjab state, we have plotted the social
welfare effort made by the Punjab state vis-à-vis other high-income states of Haryana,
Gujarat, Maharashtra and Tamil Nadu (Figure 3). It can be observed that the state of Punjab
has made the lowest social welfare effort for most of the time period under consideration. In
few years, its performance has improved but it has remained much lower than that made by
its counterpart states.

11 There is the possibility that besides state, other (semi-government) organisations like welfare boards etc. may
also be contributing significantly to promote social welfare. We do not consider such organisations here as our
prime focus is to evaluate the social welfare effort made by the state.
12 Real values are derived by deflating the nominal values with state gross domestic product deflators.

13
In order to reflect the negligible social welfare effort of the state in monetary terms, we have
estimated the amount of money that the states have spent on social welfare out of every Rs.
1,000 of their gross state domestic product (GSDP). Since this estimation has a temporal
dimension, we have provided the figures in real terms (Table 6). It is found that during the
1980-90 period, the state of Punjab has spent, on an average, Rs. 4.82 on social welfare out of
its real GSDP worth Rs. 1,000 whereas its counterpart states have undertaken relatively high
expenditures on social welfare out of their real GSDP. Similar has been the situation with the
subsequent time periods of 1990-2000 and 2000-08.

TABLE 6: (AVERAGE) REAL SOCIAL WELFARE EXPENDITURE PER RS. 1000 OF REAL GSDP
(BASE=1999-2000)
Punjab Haryana Gujarat Maharashtra Tamil Nadu
Rs. Rank Rs. Rank Rs. Rank Rs. Rank Rs. Rank
1980-85 5.01 4 3.87 5 7.62 2 5.04 3 10.33 1
1985-90 4.64 5 9.24 2 7.33 3 5.31 4 11.21 1
1980-90 4.82 5 6.55 3 7.48 2 5.18 4 10.77 1
1990-95 4.54 5 8.90 1 5.70 3 4.67 4 8.85 2
1995-2000 3.70 5 6.64 2 4.98 3 4.60 4 8.45 1
1990-2000 4.12 5 7.77 2 5.34 3 4.63 4 8.65 1
2000-05 2.76 5 7.02 2 5.34 4 5.39 3 8.38 1
2005-08 3.29 5 7.55 2 4.32 4 6.05 3 9.90 1
2000-08 2.96 5 7.22 2 4.96 4 5.64 3 8.95 1
Source: Same as Table 3

It is also found that the average amount of the resources spent on social welfare has got
reduced over the period of time. Though such pattern has been revealed by Gujarat as well,
the decline has not been as sharp as in the case of Punjab. Maharashtra and Tamil Nadu has
revealed a fluctuating trend – the magnitude of their social welfare expenditure has fallen
once in the decade of 1990-2000 and in the subsequent decade, it has recorded an increase
from its earlier level.

Thus, it can be concluded that the state of Punjab has not made a sound social welfare effort,
both in terms of its policy and expenditure, to protect the vulnerable masses. Its performance
in this respect has remained very poor – a situation that it could have avoided given its
affluence and affordability. But, why has it been so? An answer to this query is sought with
an understanding of the forces underlying politico-social dynamics of the state in the
subsequent section.

6. FORCES SHAPING STATE’S APATHY ABOUT THE PLIGHT OF VULNERABLE MASSES

6.1. Political Dynamism Reflecting the Absence of Concern for the Vulnerable Masses
A. Dominant Political Parties and Their Ruling Agendas
Since the reorganisation of the state (in November 1966), various political parties, both
national as well as state, have contested elections but among these, only a few could
influence the political environs of the state. Prominent among these have been the national
level parties like the Indian National Congress (INC), Communist Party of India (CPI /
CPI(M)) and the Bhartiya Janata Party (BJP), earlier Bhartiya Jana Sangh (BJS) and the state
level party of Shiromani Akali Dal (SAD). These parties have remained in the dominant
position either independently or as coalition partners over the period of time.

14
TABLE 7: ELECTORAL PERFORMANCE IN PUNJAB’S ASSEMBLY ELECTIONS (1967-2008)
2007 2002 1997 1992 1985 1980 1977 1972 1969 1967
Seats Contested 116 105 105 116 117 117 96 89 103 102
Congress
Seats N 44 62 14 87 32 63 17 66 38 48
Won % 37.93 52.99 11.97 74.36 27.35 53.85 14.53 63.46 36.54 46.15
% Votes Polled 40.90 35.81 26.59 43.83 37.86 46.12 35.59 42.84 39.18 37.45
Seats Contested 93 92 92 58 100 73 70 72 65 61
Akali Dal

Seats N 48 41 75 3 73 37 58 24 43 26
Won % 41.38 35.04 64.10 2.56 62.39 31.62 49.57 23.08 41.35 25.00
% Votes Polled 37.09 31.08 37.64 5.20 38.01 26.92 31.41 27.64 30.44 24.68
Seats Contested 23 23 22 66 26 41 41 33 30 49
CPI/CPI(M) BJP (BJS)

Seats N 19 3 18 6 6 1 25 0 8 9
Won % 16.38 2.56 15.38 5.13 5.13 0.85 21.37 0.00 7.69 8.65
% Votes Polled 8.28 5.67 8.33 16.48 4.99 6.48 14.99 4.97 9.01 9.84
Seats Contested 25 13 25 20 38 18 18 17 28 19
Seats N 0 2 2 5 1 14 15 11 6 8
Won % 0.00 1.71 1.71 4.27 0.85 11.97 12.82 10.58 5.77 7.69
% Votes Polled 1.04 2.50 4.77 6.04 6.36 10.52 10.09 9.77 7.91 8.46
Source: Various Reports on Electoral Results, accessed from http://eci.nic.in/eci_main/index.asp

Table 7 reveals that the Congress party has never remained a major party to win elections for
most of the time. Its electoral base has eroded steadily in the state due to a variety of reasons.
Consequently, it has obtained a majority of seats only four times, i.e. in 1972, 1980, 1992 and
2002, out of the ten assembly elections held since the reorganisation of the state. Moreover,
the concern of the Congress party in the state was no other than being in power as it did its
best to be so (Gill and Singhal, 1984b).

The alternative parties to Congress have emerged only as alliance / coalition of diverse
groups such as Akali Dal, BJP and the Communist parties. These coalitions have always been
led by Akali Dal, which may also be termed as a strong religion-based regional party of India.
As evident from the ‘Anandpur Sahib Resolution’ of 1973, this party has stood for furthering
the interests of the Sikhs and the capitalist farmers. The welfare of the vulnerable masses has
never been on the agenda of this party (Kaur, 1999).

The popularity of the Communist Party in Punjab got reduced over time. Researchers
attribute its weak status to a variety of reasons like organisational weaknesses emerging from
small membership, leadership never emerging from the ranks of the proletariat, party
factionalism, inter-personal clash between the leadership of CPI and CPI (M), limited
industrial sector acting as a hurdle to make much headway, intellectual backwardness, petty
bourgeoisie character and the problems of communalism and terrorism in state (Singh, 1985;
Brar, 1989). Moreover, it is said that it has wasted most of its valuable time and a great deal
of resources to cultivate a political alliance with the Akalis rather than to build up its own
independent political base in urban and rural areas (Sangwan, 1995: 255).

It has been the phase of militancy that caused a big loss to the Communists in the state. It is
pointed out that “CPI alone has lost 62 comrades in Punjab and 3 in Haryana... and such
prominent leaders as Malkiat Mahal and Nachhatar Singh. ... CPI-M has lost about 31,
including former MLA Harbans Singh Beeka and Youth leader Gurnam Singh Uppal. The
Naxalites have lost more than ten” (Dang, 2000: 307). Though the Communists, irrespective
of such heavy loss, continued to fight for national unity, communal peace and harmony, the
terrorist killings at such massive scale (of prominent communist leaders) have created a
vacuum in state leadership fighting for the rights of workers.

15
B. Rural Society and the Nature of Political Influence
In light of the prevalence of significant vulnerability in the agricultural segment, an inquiry
into the nature of political influence exerted by rural society assumes significance. The
farmer organisations represent the influencing force emerging from the rural society
especially the farming community13 and a description of their agenda and struggles fought by
them may reveal the nature of political influence generated by Punjab’s rural society.

In order to substantiate our discussion, we focus on the case of the Punjab unit of Bhartiya
Kisan Union (BKU) which has come into existence with this name in 1980 though it was
active as ‘Punjab Khetibari Zamindara Union’ (PKZU) since 1972. It has fought several
struggles during 1973, 1974, 1974-75, 1977-78 but as pointed out by Gill (2000) that it
“became very prominent during 1983-84 struggle culminating into gherao of Punjab Raj
Bhawan from March 12 to 18 in 1984” (pp. 363).

Gill and Singhal (1984a) point out that the leadership of the union is mainly in the hands of
rich peasantry. Nearly 80 percent of the leaders own more than six acres of land and 49
percent own more than 11 acres of land, 95 percent have electric tube-wells / pump-sets, 84
percent have mechanical threshers and 68 percent have tractors. Its class character gets
exposed with the type of struggles led by this organisation. Its 1974 struggle aimed at anti-
single state food zone, 1974-75 struggle concerned power rate for electric tube-wells, 1975
struggle was against increased water rates, revenue and commercial tax, 1977-78 struggle
aimed at replacement of defective tractors, 1979 struggle came to be known as ‘diesel
morcha’, struggles during 1973-83 focused on sugarcane prices and related issues, 1981
strike was related to milk prices and 1984 agitation aimed at hike in the procurement prices of
wheat and abolition of tariff rates of electricity, among other things.

The issues which concern exclusively the rich farmers have received priority in agitations of
BKU and the union has never started any agitation concerning the needs of poor farmers,
agricultural workers and the women. Though the issue of demand for minimum wages is
included in Union’s agenda since its inception, it could not mobilise significantly the
agricultural labour due to “open conflict between agricultural labour and the farmers and
openly biased attitude of the union in favour of farmers in the situation of conflict between
the two” (Gill, 2000: 366).

Thus, the struggles led by the farmer organisations have remained confined to agricultural
aspects and served largely the economic concerns of large farmers. The medium and small
farmers along with agricultural labour have remained weak in asserting their demands.14 It is
also noteworthy that the communists have also tried to organise agricultural workers
independently of their Kisan Sabhas besides CPI(M)’s initiative to launch ‘All-India
Agricultural Workers Union’ (AIAWU) in 1982, they could not get much response from the
agricultural labourers as they saw communists with a bit of skepticism due to its alliance with
Akalis. Consequently, the concerns for social welfare have remained at large neglected in
rural society’s effort to influence state power, politics and policy.

13 Mukherji (1998) studies farmers’ movement in Punjab from the perspective of pressure group politics.
Similarly, an earlier study, viz. Singh (1990) examines farmers’ movements with this perspective.
14 Nonetheless, there are a few instances in Punjab’s rural history when these workers have struggled for their
rights. Singh and Talbot (1980) provide a detailed discussion on agricultural workers’ struggle in Punjab.

16
6.2. Non-Influential Character of Worker Unions / Organisations
Besides rural sector organisations, the worker unions especially of the industrial labour have
remained weak. They have not been able to influence the state, in any effective way, for
attaining the social welfare objectives except, in few cases, their (trivial) economic concerns.
While discussing this point, a major factor that needs to be kept in mind is the fact that the
industrial working class has never been a big force in the state as it constitutes a very small
proportion of the state’s population.

In the year 2006, 2605 trade unions have been registered with the labour commissioner of
Punjab - out of these, only 543 have submitted economic returns. The estimated membership
in these trade unions has been only 5.62 lakhs which reflects that a majority of the workforce
is not organised in trade unions. It is scattered across towns and cities. Such situation
indicates the absence of strong trade union movement (numerically speaking). It is
noteworthy that a major factor for such fragile situation of trade union movement has been
the nature of industry in Punjab. Punjab’s industry has been mainly small or medium in its
scale of operation. In such units, the size of the workforce is relatively small.

Across industries, the workforce remains spatially dispersed with conflicting relations among
themselves. It is only in large units, the workers can stand collectively to pressurise for their
demands but the number of such units in Punjab is very minimal.

6.3. Societal Dynamics Hampering the Demand for Sound Social Welfare Effort
In a democratic set-up, one may expect that such apathy by the state towards the vulnerable
masses must have aroused strong reaction by the society. Nevertheless such an expectation is
based on the belief that there must exist, a priori, strong social cohesion and cooperation
among the masses. Unfortunately, the arousal of various inherent conflicts has disturbed the
social fabric in Punjabi society to such a large extent that it has lost its capacity to stand
collectively to assert the state for providing a sound social security mechanism.

Like elsewhere in India, these inherent conflicts are shaped largely by the religious and caste-
related differences. What is more disturbing in case of Punjab is the fact that they have
contributed most often to the subjugation of the interests of one group by the other and
thereby leaving one group isolated from the other.

The religion based conflicts are deeply rooted. It is learned that prior to the Indian
Independence, the Hindus and Sikhs have remained in clash with each other. The Arya Samaj
Movement has been termed as the conversion of Sikhs into Hinduism. Moreover, the
question of Sikh identity has led to the formation of All India Sikh Gurdwara Parbandhak
Committee in the 1920s. After independence, the call for a ‘Sikh Homeland’ by Master Tara
Singh and of ‘Maha Punjab’ by the Hindus has reflected another strand of Hindu-Sikh
conflict. There has been a bloody clash between the Nirankaris and the Sikhs in 1978.
Likewise, during the 1980s, the phase of militancy has been more or less based on Sikh’s
hatred towards the Hindus. During recent times as well, there have been clashes between the
Sikhs and the followers of Baba Bhaniarawala. There has been a clash between Sikhs and the
followers of Sacha Sauda Sect (Meeta and Rajivlochan, 2007). The tension is still continuing
and the Malwa belt has emerged as the most sensitive region that may witness religious
clashes.

Similarly, the caste and class based societal segregation is also dominating in Punjabi society.
Though an earlier study (Jodhka, 2000) argues that the caste system in Punjab is not that

17
severe in its strictest sense as the process of economic growth has removed the notions of
‘pollution’ and ‘untouchability’ to a large extent, there are instances by which the present-day
Punjabi society cannot be said as free from caste-based societal segregation and
discrimination. The Mazhabi Sikhs are looked down by Jats. It is also found that a number of
scheduled castes and the rural landless of the Sikh community feel alienated from Sikh
institutions. Jodhka (2002) has revealed that out of the 51 villages, dalits have separate
gurudwaras in as many as 41 villages. In most cases, dalits have built separate gurudwaras to
assert their autonomy and avoid the humiliation they feel in the gurudwaras run by Jats.
Moreover, dalits have sought alternatives in other socio-religious institutions such as that of
Sant Nirankari, Radha Swami, Sacha Sauda and Ad Dharam. There are other instances of
social boycotts by Jats – a recent caste conflict in Talhan reveals pervading caste-based
tensions in Punjabi society (Jodhka and Louis, 2003).

Besides caste, the Punjabi society has witnessed polarisation across class. The class conflict
in both the rural and urban areas is an outcome of the structural changes experienced by the
state economy during the past. The Green Revolution led growth in agriculture has created a
new class of capitalist farmers in the rural society. The economic interests of this class are in
conflict with those of the poor peasants on the one hand and the rural proletariat on the other.
The capitalist farmers have remained in conflict with the poor peasants due to latter’s demand
for a greater share in developmental benefits distributed through government agencies (Azad,
1981). Similarly, they have remained in conflict with rural proletariat due to the latter’s
demand for an increase in wages and the distribution of surplus land among the landless
labourers. As the landlords are mainly the Jats and the agricultural labourers belong largely to
the scheduled castes, the clash of economic interests sometimes assumes the form of caste
conflict as well.

In recent years, another segregating force that is cutting across these religious, caste and
class-based differences is the allegiance of an individual / family / community / village to a
certain political party. It is observed that these political differences have sharply divided the
Punjabi society into two political parties, viz. Congress and Akali Dal. The individuals are
generally recognized by their party and the divisions caused have been so sharp that it has left
no room for the existence of sound social cohesion and cooperation in the Punjabi society.

7. CONCLUDING REMARKS
Thus, the study has revealed that Punjab despite being the affluent state could not do much to
protect the vulnerable masses. Its effort, in terms of policy and expenditure, for curbing
vulnerability has remained minimal. In spite of their existence, the legislations protecting the
working poor have remained largely ineffective. Similarly, the institutions like labour welfare
board etc. has not been of much help to the working poor. Moreover, the welfare effort made
by the state has remained negligible not only in absolute terms but also in terms of its
magnitude vis-à-vis other high income states. We point out implicit political economy of such
apathetic attitude of the state – a finding that leaves much room for disappointment in an
affluent state that could have emerged as the ‘model’ welfare state due to its ‘relatively
better’ resource endowments.

18
APPENDIX

TABLE A1: RANK DISTRIBUTION OF PER CAPITA INCOME* ACROSS MAJOR INDIAN STATES

Jammu & Kashmir

Himachal Pradesh

Madhya Pradesh#
Andhra Pradesh

Uttar Pradesh#

West Bengal
Maharashtra

Tamil Nadu
Karnataka

Rajasthan
Haryana
Gujarat

Punjab
Assam

Orissa
Kerala
Bihar#
Year

1970-71 15 7 16 9 2 5 3 13 4 14 6 11 1 10 8 17 12
1971-72 14 6 16 9 2 5 4 12 3 11 7 15 1 13 8 17 10
1972-73 15 6 16 14 2 4 3 12 5 11 8 10 1 13 7 17 9
1973-74 14 7 16 9 5 4 2 11 3 13 6 10 1 15 8 17 12
1974-75 11 7 16 13 4 5 2 10 3 12 6 14 1 15 9 17 8
1975-76 15 7 16 9 2 3 4 11 5 12 6 13 1 14 8 17 10
1976-77 15 8 16 9 2 4 3 12 6 14 5 13 1 11 7 17 10
1977-78 15 9 16 8 2 4 3 11 6 14 5 12 1 13 7 17 10
1978-79 14 9 16 8 2 5 3 11 6 15 4 10 1 13 7 17 12
1979-80 12 10 16 8 2 6 3 9 5 15 4 13 1 14 7 17 11
1980-81 14 7 17 8 2 4 3 11 6 12 5 13 1 16 9 15 10
1981-82 10 6 17 8 2 4 3 11 7 13 5 14 1 15 9 16 12
1982-83 10 5 17 8 2 6 3 11 7 13 4 16 1 15 9 14 12
1983-84 12 5 17 6 2 7 3 11 8 14 4 15 1 13 10 16 9
1984-85 12 5 17 6 2 8 3 10 7 13 4 14 1 15 9 16 11
1985-86 12 5 17 8 2 6 3 11 7 14 4 13 1 16 9 15 10
1986-87 13 6 17 7 2 4 3 11 8 16 5 12 1 14 9 15 10
1987-88 12 5 17 11 2 4 6 9 8 13 3 14 1 16 7 15 10
1988-89 10 9 17 5 2 4 6 11 7 15 3 14 1 12 8 16 13
1989-90 10 9 17 5 2 4 8 11 6 15 3 13 1 14 7 16 12
1990-91 10 9 17 7 2 4 8 12 5 14 3 16 1 11 6 15 13
1991-92 10 8 17 11 2 4 7 9 6 15 3 16 1 13 5 14 12
1992-93 11 10 17 4 2 5 8 9 6 14 3 16 1 12 7 15 13
1993-94 10 11 17 7 2 5 9 8 4 13 3 15 1 14 6 16 12
1994-95 9 11 17 4 2 6 10 8 5 14 3 15 1 13 7 16 12
1995-96 9 12 17 6 2 5 11 8 4 14 3 15 1 13 7 16 10
1996-97 9 13 17 4 2 5 11 8 6 14 3 16 1 12 7 15 10
1997-98 11 13 17 4 2 5 12 8 7 14 3 15 1 10 6 16 9
1998-99 10 13 17 4 2 5 12 8 7 14 3 15 1 11 6 16 9
1999-00 10 13 17 7 2 4 11 8 5 14 3 15 1 12 6 16 9
2000-01 9 13 17 8 2 4 11 7 6 14 3 15 1 12 5 16 10
2001-02 10 13 17 7 2 3 12 8 5 14 4 15 1 11 6 16 9
2002-03 10 12 17 7 1 4 11 8 5 14 3 15 2 13 6 16 9
2003-04 8 13 17 6 1 4 12 10 5 14 3 15 2 11 7 16 9
2004-05 8 13 17 6 1 4 11 9 5 15 3 14 2 12 7 16 10
2005-06 9 13 17 6 1 5 11 8 4 15 2 14 3 12 7 16 10
2006-07 8 14 17 6 1 5 12 9 3 15 2 13 4 11 7 16 10
2007-08 9 14 17 4 1 6 12 8 2 15 3 13 5 11 7 16 10
Note: * indicates that the per capita income is per capita net state domestic product (at 1999-2000 prices).
Note 2: # implies that from 1993-94 onwards, the per capita income Bihar, Madhya Pradesh and Uttar Pradesh is
inclusive of the values for Jharkhand, Chattisgarh and Uttarakhand respectively.
Source: Same as Table 1.

19
 TABLE A2: PATTERN OF MONTHLY PER CAPITA TOTAL EXPENDITURE (IN RS.), 1972-73 TO 2004
th nd th rd th th th
27 Round (1972-73) 32 Round (1977-78) 38 Round (1983) 43 Round (1987-88) 50 Round (1993-94) 55 Round(1999-2000) 60 Round* (2004)
State
Rural R Urban R Rural R Urban R Rural R Urban R Rural R Urban R Rural R Urban R Rural R Urban R Rural R Urban R
Andhra
39.8 13 56.3 14 69.7 7 93.2 9 115.4 7 153.5 12 160.1 7 230.3 12 288.7 7 408.6 12 453.6 12 773.5 12 557.1 10 1101.7 5
Pradesh
Assam 41.7 9 60.8 9 59.0 14 94.4 8 113.0 8 154.0 11 153.6 10 269.9 3 258.1 13 458.6 6 426.1 13 814.1 10 531.7 12 1019.5 10
Bihar 41.2 11 59.9 10 57.5 15 83.1 14 93.8 16 138.5 15 136.6 15 186.5 16 218.3 16 353.0 16 384.7 15 601.9 16 442.5 14 784.0 16
Gujarat 51.7 4 57.6 13 70.3 6 100.9 3 122.7 5 163.6 9 161.2 5 240.7 9 303.3 5 454.2 8 551.3 4 891.7 7 613.2 4 1092.0 6
Haryana 70.1 2 69.9 3 92.4 3 100.4 4 151.8 2 186.9 1 214.7 2 251.8 5 385.0 3 473.9 5 714.4 3 912.1 4 878.7 3 1050.3 9
Karnataka 44.5 5 57.9 12 64.9 10 87.6 11 116.8 6 166.3 6 149.1 12 222.8 14 269.4 12 423.1 11 499.8 7 911.0 5 501.6 13 937.1 12
Kerala 42.2 7 58.3 11 74.2 5 82.7 15 145.2 3 176.4 4 211.5 3 266.2 4 390.4 2 493.8 3 765.7 1 932.6 3 990.2 1 1371.5 1
Madhya
40.7 12 61.9 8 59.9 12 90.2 10 100.5 14 144.9 14 142.0 14 236.0 11 252.0 14 408.6 12 401.5 14 693.6 13 437.3 15 793.4 15
Pradesh
Maharashtra 41.6 10 74.8 2 76.9 4 110.3 2 110.4 11 184.4 3 160.8 6 279.5 1 272.7 11 529.8 1 496.8 8 973.3 1 568.9 8 1258.9 2
Orissa 35.0 16 62.4 7 52.5 16 87.0 12 98.8 15 151.4 13 127.5 16 225.2 13 219.8 15 402.5 14 373.2 16 618.5 15 414.1 16 872.1 13
Punjab 74.6 1 77.9 1 114.4 1 121.7 1 170.5 1 185.2 2 244.2 1 270.0 2 433.0 1 510.7 2 742.4 2 898.8 6 946.9 2 1058.8 8
Rajasthan 52.0 3 63.9 5 108.7 2 95.7 7 127.0 4 159.9 10 177.8 4 237.9 10 322.4 4 424.7 10 548.9 5 795.8 11 580.5 6 994.8 11
Tamil
37.7 15 54.0 15 63.3 11 86.1 13 112.2 10 163.7 8 154.3 9 248.8 8 293.6 6 438.3 9 514.0 6 971.6 2 603.4 5 1130.5 4
Nadu
Uttar
42.1 8 53.6 16 67.3 9 82.5 16 104.5 13 135.5 16 148.7 13 216.7 15 273.8 10 389.0 15 466.7 10 690.7 14 538.2 11 827.0 14
Pradesh
West
38.5 14 68.2 4 59.3 13 97.1 5 104.6 12 170.0 5 149.9 11 249.5 7 278.8 9 474.2 4 454.5 11 866.6 8 580.2 7 1133.4 3
Bengal
All-India 44.2 6 63.3 6 68.9 8 96.2 6 112.5 9 164.0 7 158.1 8 249.9 6 281.4 8 458.0 7 486.1 9 855.0 9 564.7 9 1060.2 7
Note: *As per Schedule I; R implies Rank in Descending Order.
Source: NSSO’s Various Surveys on Household Consumer Expenditure.

20
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