The India-Pakistan conflict, in spite of the ceasefire, has started to take its toll on the economy of the border state.
Debt-ridden Punjab is not only anticipating immediate losses in its revenue generation, but also staring at the possibility of a slowdown in industrial growth as the drone and missile strikes last week continue to keep migrants — who constitute a chunk of the state’s labour force — away, with many still leaving fearing escalation.
While the state government is making a regular assessment of its finances, industrialists are doing all they can to stop the reverse migration of labour and ensure that their production is not hit. However, their efforts have borne little fruit, as a majority of the labour, which runs the industry in Punjab, has left and is not willing to come back immediately. This slowdown in industrial production is expected to further hit the GST collections in the state.
According to information available with The Tribune, the state government has already witnessed a shortfall of Rs 525 crore in the GST collections and Rs 228 crore in excise duty collections for the month of April. As a result, the “Own Tax Revenue” of the state is down by Rs 557 crore, registering a negative growth of 12 per cent. The “Own Non Tax Revenue”, collected from the departments of Urban Development, Health and Family Welfare and Cultural Affairs department, too, has also seen a negative growth.
Official sources in the Finance Department told The Tribune that though the GST revenue was down after the Central government made some adjustments of the IGST devolutions made last year, they admit that the tension at the border was expected to impact the consumption of goods, thus hitting the GST collections in the month of May. “It may take time for the economy to recover, as most people have been depositing money in banks and withdrawing much less, ever since May 7, when the tensions escalated after the Pahalgam terror attack of April 22,” said a senior officer.
Meanwhile, industry in Amritsar and Jalandhar, which bore the brunt of attacks from Pakistan last week, is grappling with the problem of labour shortage as migrant labourers from Uttar Pradesh, Bihar and West Bengal, have gone back home.
Gaurav Sud of Prime Leathers, Jalandhar, told The Tribune that not only his unit, but all leather goods manufacturing units are at their wits end after the labour left in droves last week. “Nearly 50 per cent of the labour in my unit has gone back, citing safety concerns. We offered them many freebies and other incentives, but they said they did not feel safe here amidst the rise in conflict. With 50 per cent of the labour gone – which is 600 persons – the delivery of my orders will be hit,” he rued.
Arvinder Pal Singh of Amar Singh Chawal Wala, who exports basmati from Amritsar, said 200 labourers employed at his unit had gone back home. ‘I even offered them an additional bonus for two months, over and above the normal bonus, but no one was ready to stay. Even though there is ceasefire now, they are not willing to return immediately. It will take another month for the industry to start operating normally. Till then, our orders will be delayed,” he rued.
