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Industrial Development & Economic Growth in Rajasthan

March, 2018

Rajasthan, the largest (area-wise) state in India, is located in the north-western part of the subcontinent. It borders six major states in the northern, western and central parts of India. Rajasthan is a natural corridor between the wealthy northern and the prosperous western states, making it an important trade and commerce centre.

The natural resources, policy incentives, strategic location and infrastructure in the state are favourably suited for investments in sectors such as cement, IT and ITeS, ceramics, tourism, automotive and agro-based industries.

Rajasthan is the largest producer of oilseeds, seed spices and coarse cereals in India. Tremendous opportunities exist in the areas of organic and contract farming as well as in infrastructure developments related to agriculture.

Between 2011-12 and 2017-18, Gross State Domestic Product (GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 6.05 per cent to US$ 129.79 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 6.15 per cent to US$ 116.97 billion.

Rajasthan accounts for 17.5 per cent of the total cement grade limestone reserves in India and is the largest cement producer with 24 major cement plants having a total capacity of 55 million tonnes per annum.

Bureau of Investment Promotion (BIP) is a nodal agency of the Government of Rajasthan that facilitates investments in various sectors in the state. Rajasthan State Industrial Development and Investment Corporation (RIICO) is the sole agency in the state that develops land for industrial growth.

Some of the major initiatives taken by the government to promote Rajasthan as an investment destination are:

  • As per the state budget 2018-19, an estimated outlay of US$ 692.59 million was made for agriculture in the state
  • Under state budget 2018-19, the state government allocated an amount of US$ 30.89 million for the phase-I-B of metro rail project in the state.
  • A Single Window Clearance System (SWCS) for investment approvals is operational in the state and the BIP was set up to focus on investments above US$ 2.2 million.
  • The Government of Rajasthan is promoting the development of several SEZs across the state for sectors such as gems and jewellery, handicrafts, IT, electronics, automotive/auto components and textiles.
  • Special auto and engineering zones have been developed in Pathredi Industrial Area and Bhiwadi. The three main auto clusters of Rajasthan – Bhiwadi, Neemrana and Pathredi –have as many as 100 functional units.
  • RIICO developed 323 industrial areas, including SEZs, export promotion industrial parks and inland container depots.
  • The state government is encouraging JVs and contract management of private heritage properties (forts, fortresses, palaces and havelis) as well as identifying heritage government properties to award on a lease basis to promote tourism.
  • IT parks with special infrastructure have been set up at Jaipur, Jodhpur, Udaipur, Kota and Alwar.
  • In 2014, Rajasthan Solar Energy Policy was introduced to reduce dependence on conventional sources of energy by promoting the development of nonconventional energy sources, especially solar power.

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