Punjab's Policy Paradox: How Semiconductors Highlight a Governance Gap

In the span of just one week, Punjab witnessed two decisions that could not be more different in vision, preparation, and impact. One came from the state government in Chandigarh — a reluctant withdrawal of its controversial Land Pooling Policy for industrial projects, abandoned after months of farmer protests, legal ambiguities, and a complete lack of clarity in execution.

The other came from New Delhi, where the Union Cabinet, led by Prime Minister Narendra Modi, approved four cutting-edge semiconductor manufacturing projects, one of which will be established in Punjab. It was a juxtaposition that spoke volumes about the contrasting approaches to governance and development.

For anyone who cares about Punjab’s economic future, these developments tell a deeper story. On one hand, we have a state government that rushed to push through a land pooling model without adequate consultations, feasibility studies, or legal safeguards. Here, the design and process were deeply flawed too.

Farmers were left unsure of compensation mechanisms, land titles were trapped in procedural uncertainties, and potential investors saw an unclear roadmap with no guaranteed infrastructure timelines. The end result? Distrust, protests, and the eventual scrapping of the policy — all of which consumed time and goodwill without creating a single job or attracting a single new investment.

On the other hand, the Centre’s decision on semiconductors reflects a level of preparation, long-term thinking, and alignment with global trends that Punjab urgently needs. The semiconductor industry is not just another manufacturing sector; it is the backbone of the digital economy, critical to everything from smartphones and electric vehicles to defence electronics and renewable energy systems.

The Union government’s approach has been clear and strategic — building a policy framework with incentives, identifying global technology partners, securing supply chain linkages, and selecting states based on infrastructure readiness and potential workforce capabilities.

That Punjab has been chosen as one of the sites for this futuristic industry is no accident. It is the outcome of sustained engagement between the Centre and stakeholders, careful assessment of the state’s strengths, and a willingness to integrate Punjab into a national vision of technological self-reliance.

The plant will not only create high-skilled jobs but also build an ecosystem of suppliers, R&D institutions, and training centres that could help reverse the trend of youth migration for overseas employment. In the long run, such projects have the power to reposition Punjab from a primarily agrarian economy to a diversified industrial-technological hub.

What makes the contrast sharper is that both decisions — the semiconductor approval and the land pooling withdrawal — came within days of each other. One signals confidence from global investors and national planners that Punjab can host industries of the future. The other exposes how ill-prepared the state machinery has been in converting ideas into workable policies. This is not about political point-scoring; it is about the quality of governance and the difference between being reactive and being proactive.

The Modi government’s track record in Punjab over the past few years shows a consistent pattern — whether in agriculture infrastructure, connectivity, or now high-tech manufacturing — of matching vision with implementation.

Each major decision has been preceded by groundwork, consultations, and integration with larger national strategies. By contrast, the state’s recent policy missteps, from industrial land pooling to stalled infrastructure upgrades, have reflected a lack of long-term planning and an over-reliance on ad hoc measures.

Punjab’s economic challenges are well known: stagnant industrial growth, declining farm incomes, and a worrying outflow of skilled youth. Addressing these requires bold thinking, but boldness must be backed by preparation. The semiconductor project demonstrates what is possible when planning meets ambition — a project that looks not just at the next year, but at the next generation.

The lesson for Punjab’s leadership is clear. The global economy is changing fast. The next decade will belong to regions that can align themselves with emerging industries, leverage technology, and provide investors with both policy stability and skilled manpower. This demands that we move away from short-term fixes and politically expedient schemes, and instead focus on building the fundamentals — infrastructure, education, research capacity, and industrial clusters.

It is a rare opportunity for Punjab to ride the wave of a national transformation. The semiconductor decision is an opening — but only if we create the right local environment to complement the Centre’s initiative. Otherwise, it risks becoming an isolated success story rather than the foundation of a broader industrial revival.

In one week, Punjab has been shown two possible futures: one of missed chances through poorly designed policies, and another of possibilities through well-planned, forward-looking investments. The choice between them should not be hard. The question is whether we have the will, the discipline, and the vision to make it.

(The views expressed in this article are personal and do not represent the opinions or positions of Outlook Business.)