This is the advice being doled out to the Parkash Singh Badal government by the country's top economists. Badal has held consultations with Montek Singh Ahluwalia and several other members of the Planning Commission to seek a prescription for the ailing economy of this once most prosperous state.

Sources said Badal was told in no uncertain terms to roll back his policy of free water and electricity since these incentives had not even helped the Akali Dal to win elections. Unless Punjab opted for ``major structural changes like downsizing the administrative costs, introduction of reforms which would entitle the state to foreign aid for infrastructural projects'', the state's economy was doomed, Badal has been told.

After Chandrababu Naidu rolled back the subsidised rice distribution programme andBansi Lal withdrew prohibition, the Akali politicians too seem keen to debate the impact of populist policies. Official sources said the Akali leadership has acknowledged that populist measures neither helped economic growth nor kept voters tied down to a particular party.

It seems free water and electricity deprived the government of revenue amounting to Rs 1,000 crore. Lack of funds resulted in deterioration in infrastructure development, which in turn spread unrest among voters. This, sources said, was being cited as one of the reasons for the Akalis' defeat in the recent Parliamentary elections.

The subsidies culture had deprived Punjab of aid from International Monetary Fund (IMF) and other world bodies for infrastructural projects. Economists have told the Punjab government to ``make realistic corrections'' in its policies for attracting foreign investment.

For the social security pension fund, the Planning Commission has asked Punjab to charge special levies and not extract funds fromdevelopmental sectors.

Officials said Badal proposed a corps fund of Rs 10,000 crore to dole out incentives for states which are willing to implement economic reforms. The Chief Minister said he would ask the Prime Minister to implement the Gadgil formula for plan allocations to offset the political biases that creep in distributing funds to the states.

Sources close to Badal told The Indian Express that the Akali leaders were in a reflective mood and were likely to roll back the populist measures step by step to prevent a major political fallout.