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As per the leading journal, India Today, the state of Punjab is regarded as the best state in all aspects since 2003 and it has managed to retain that top position till today. It offers the best quality life to its people. As per the State Hunger Index of India, the Punjab state has lowest level of hunger in the country.

The land of Punjab has a very rich fertility on earth. This region is an ideal place for growth of wheat, rice, fruits, sugar cane and various vegetables. The Punjab belonging to India is known as “India’s bread basket” or “Granary of India”. It has 10.26% production cotton of India, 19.5% of wheat of India and 11% of rice of India. The Ferozepur and Fazilka Districts are the highest wheat and rice producers of state. As far as the world is concerned, Punjab in India grows 2% of world's cotton and 2% of wheat along with 1% of rice. The largest crop cultivated here is wheat. Other prominent crops grown here are cotton, rice, sugarcane, maize, pearl millet, fruit and barley. Wheat and rice are double cropped in state of Punjab and rice stalks are being burned off across thousands of acres before wheat planting. The practice done across large area is wasteful and polluting. The fertilizer consumption per hectare here is 223.46 kg although it is 90 kg nationally. This state was honored with the National Productivity Award for extension services of agriculture for 10 years from 1991-92 to 1998-99 as well as from 2001-04. Recently, there has been productivity drop because of falling fertility level of soil. The reason may be because of too much of use of pesticides and fertilizers over years. One more issue is the rapid fall in water table which is responsible for 90% of agriculture. According to a study, groundwater is also falling by over a meter every year.

Major Sector of Punjab Economy


About 2/5th of population of Punjab occupies itself with agriculture accounting to a major segment of gross product of state. Punjab has a significant portion of food grain production in India contributing a prominent rice and wheat stock kept by Central Pool i.e. a national repository for excess food grain. Most of the productivity and agricultural progress of Punjab is attributable to the Green Revolution which is an international revolution established in 1960s which was meant not only for new technologies of agriculture but also rice and wheat high-yielding varieties.

Beside rice, corn, wheat, pearl millet and barley are also significant cereal products in Punjab. However, the pulses yield has been reduced since the later 20th century, there is a rapid increase witnessed in production of fruits, citrus, guavas and mangoes commercially. Several other prominent crops found are cotton, chickpeas, sugarcane, peanuts, oilseeds and vegetables.

There is adequate irrigation facilities provided to the cultivated area, state of Punjab is ranked to be one of the most irrigated regions. The major source of irrigation here are canals and wells owned by the Government mostly found in southwestern and southern Punjab whereas the wells are more common in northeastern and northern areas. Bhakra Dam project of adjacent Himachal Pradesh supplies a lot of irrigation water to Punjab.

Resources and Power

Punjab is scarce in fossil fuels and therefore, it draws energy basically from thermal plants being fired with coal (imported). There is a large amount of power provided by the hydroelectric plants and solar power stations to a small extent. In 21st century, there is a higher demand of electricity in the state.


The manufacturing sector is expanding since late 20th century. The industries with huge number of workers include silk, textiles and wool industry along with beverages and processed foods, metal products, machinery, furniture and transport equipments. Several other manufacturing units have leather goods, hosiery, rubber, plastics and chemicals.


The Punjab sector has services including trade, storage, transportation, financial services, public administration, real estate and other services. This sector has been growing at a large pace by late 20th century. At present, it is the highest component of economy in Punjab.


This state has an agrarian economy having a lower industrial output comparatively with other states of country. A significant factor of industrial scenario of state is small sized units of industry. There are about 194,000 small scale industries in Punjab along with 586 medium and large units. Ludhiana is a significant centre of industry.

These are the 3 categories of industrial units in Punjab-

  • Agro-based industrial units
  • Chemical units
  • Machinery units

Textile Industry

Punjab produces about 70% of best cotton quality in the country. One of the primary disadvantages here is merely 1.5% spindlage capacity in the country. Ludhiana is referred to as India.

The mills of cotton are situated at Abohar, Phagwara, Malout, Amritsar, Mohali, Kharar and Ludhiana. Cotton ginning is very common in Malerkotla, Malout, Abohar and Bhatinda and around 25.3 mln bales of cotton is pressed every year. Around 97 million kgs of yarn along with 36.5 million m of cloth is being manufactured in textile mills of cotton in Punjab state.

Sugar Industry

The sugar mills of Punjab are situated at Batala, Bhogpur, Gurdaspur, Phagwara, Zira, Nawanshahr, Morinda, Dhuri, Rakhra, Fazilka, Dasua, Nakodar, Budhewal, Mukerian, Budhladha, Tarn Taran, Faridkot, Ajnala, Jagraon, Lauhka, Amloh and Patran. As compared to the other states of the country, size of the sugar mills is comparatively small in Punjab. The Co-operative mill of sugar at Morinda is the largest in state having a daily crushing capability of 4,000 tons sugarcane. 6 of the cooperative mills of sugar are not working whereas the left out 9 crush cane at the time of season of 150 days.

Dairy Industry

The basic source of milk as well as other dairy products in Punjab state is the buffalo. Punjab has a top rank in India as per the availability of milk coming after state of Haryana as well as Gujarat.

The plants of milk are basically situated at Verka in the district of Amritsar, Ludhiana, Jalandhar, Mohali, Patiala, Gurdaspur, Hoshiarpur, Ferozepur, Bhatinda, Sangrur, Faridkot, Mogha, Nabha, Hamira and Kot Kapura. The plant at Mogha is the highest plant in Punjab having a processing capacity of about 435 thousand liters of milk.

Banking and Finance

The Banking and finance sectors in the state of Punjab contribute in saving resources in a better way and in turn raise the saver income along with that of borrower at that very time. In case the state is not having a proper banking system and finance, the money which is saved does not give adequate return and there are several risk factors. The Banking and finance of state is the major feature of its prospect as well as growth. The more investment is made by a state, the more would be its industrial and technological upliftment.

For a systematic state economy, there is an efficient banking system and finance which is essential. There are few salient features which enhance the efficiency of this sector such as:

  • proper trading
  • specialization of production
  • professionalism
  • savings
  • efficient use of resources
  • risk-taking


The Punjab state consists of one of the best-developed network of roads in India. All the roads which are weather paved extend to majority of the villages and this Punjab state is crossed by several numbers of national highways. Punjab has a very well developed railway system served by Northern Railway which is a part of national railway system. Besides this, there is an availability of international airport in the district of Amritsar along with a great service of domestic airlines in Ludhiana and Chandigarh. Various other airports have a cargo service also.

Minerals and Energy

The basic mover of Punjab economy is its resources basically energy and the minerals. However, there is a scarcity of minerals as well as energy resources which is an unfortunate thing about Punjab.

There are potential areas of petroleum and oil bearing in the country in Punjab as well as Assam, Manipur, Tripura, West Bengal, Kutch, Himachal Pradesh and the Andamans.

Adequate as well as dependable availability of energy and minerals is important to sustain growth in the economy of the state. The Renewable as well as non-renewable sources of energy are the 2 forms of energy.

  • The Renewable energy sources consist of hydro-power, bio-gas, fuel wood, solar, wind, tidal power and geo-thermal power.
  • The Non-renewable energy sources can be got from coal, gas and oil.

In the state of Punjab, there is no availability of oil wells and coal mines and therefore the state is basically dependent on hydel, thermal and solar power.

Because of the deficiency of energy and minerals, the Punjab resources have been growing exponentially in the field of agricultural products and therefore, the state is the major agro-economic sector in the country. The electricity form of Energy is the prominent input for the development of economy.

Tourism Sector

The Punjab state is famous for its culture, cuisine and interesting history. Few of the prominent cities in the Punjab state are Amritsar, Ludhiana, Jalandhar and Patiala. The public transportation of the state has an excellent system along with great tourist transportation.

The Tourists visiting Punjab state may enjoy its culture, spirituality, ancient civilization and history. The state is enriched with religious history and incorporates Islam, Sikhism and Hinduism. The beautiful and royal palaces of Punjab, historic sites of battle, temples, shrines and has exemplary Sikh architecture which is attractive.

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