Growth



Growth, Development & Planning with special reference to Rajasthan

Historically, Rajasthan has been placed fairly low in terms of human development. In terms of human development index, it stood 28th among 32 states and union territories in 1981, with only Madhya Pradesh, Uttar Pradesh and Bihar among the larger states behind; the rank improved marginally in 1991 to 27 with Orissa also falling behind. However, the National Human Development Report 2001 placed Rajasthan at the 9th position in terms of human development index among the 15 larger states, which implied substantial improvement in the state. More recently, the 12th Finance Commission divided the states of India into five groups ranging from high to low according to selected indicators of human development and infrastructure index. Rajasthan was in the group ‘lower middle’ for human development and in the group ‘low’ for infrastructure. Thus, despite starting at a relatively low level of human development, the state has improved its position, particularly in the ‘nineties. But there is a long way to go yet, and the relatively low level of per capita income of the state implies that its efforts have to be broadly directed at a combination of economic development with human development, by no means an easy task.

Rajasthan is a leading investment destination in India after Maharashtra and Gujarat because of its environment, law and order situation, infrastructure, investment climate and favourable population density. Areas facing NCR such as Bhiwadi are now popular with automobile and manufacturing companies. Many of the small scale suppliers and vendors have opted to shift inside Rajasthan border from Gurgaon in Haryana because of power shortage and infrastructure issues there.

Rajasthan State Industrial Development and Investment Corporation (RIICO) provides facilities for development. Rajasthan is now the preferred destination for IT companies, and North India’s largest integrated IT park is located in Jaipur and is named as Mahindra World City Jaipur covering nearly 3,000 acres (12 km2) of land. Some of the companies operating in Rajasthan include Infosys, Genpact, Wipro,Truworth, Deusche Bank, NEI, MICO, Honda Siel Cars, Coca-Cola, Gillete etc.

 

Growth  

Landlocked Rajasthan borders six states: Punjab in the north, Haryana, Delhi and Uttar Pradesh in the northeast, Madhya Pradesh in the southeast and Gujarat in the southwest. It shares a 1,048 km border with Pakistan, acquiring strategic importance in national security.

Of the total 33 districts, the northern districts of Sri Ganganagar and Hanumangarh and the southeastern districts bordering Madhya Pradesh have high fertility and are relatively prosperous in agriculture. While Baran and Bundi are influenced by the agriculture revolution in MP, Sri Ganganagar and Hanumangarh have achieved high agriculture growth with the help of the Indira Gandhi canal and the Gang canal. The seven districts in the eastern belt, bordering Gujarat, are ironically the most underdeveloped agriculturally. They fall under the Thar desert and are largely tribal.

The northeastern districts of Alwar (including Neemrana), Jaipur and Ajmer, bordering Delhi and linked to it by National Highway 8, are the main drivers of industrial growth. A decade ago, Neemrana could boast of little else than a fort converted into a hotel. Today, this area along the Delhi-Gurgaon-Jaipur highway has transformed into a bustling industrial zone with a Japanese touch, like Nogedaira in Narita next to Tokyo, with sushi and sashimi cafes competing with the state’s own dal-baati-churma. Thanks to a business pact between the Rajasthan government and the Japanese External Trade Organization, investment worth millions of dollars has poured into the state. Neemrana now has 46 Japanese plants, including brands such as Daikin, Nippon and Nissin. The factories employ both Indian and Japanese workers.

Rajasthan’s economic backwardness in the past has been somewhat of a paradox as the state has been the home of one of India’s most enterprising communities-Marwari traders. Moreover, western Rajasthan has large deposits of hydrocarbons. Indeed, Rajasthan has become the second-highest crude oil producer in India (after Bombay High), generating 9 million tonnes of crude oil or 24 per cent of the total domestic crude oil production. Rajasthan also has a sizeable mining sector. The state is a top producer of polyester and the largest producer of cement in India, with a capacity of over 44 million tonnes per annum. Yet Rajasthan’s industry is relatively underdeveloped, and so is urbanisation. According to the 2011 census, almost 75 per cent of the population lives in the rural areas. Only three cities have a population of over one million-Kota, Jodhpur and Jaipur. However, the Delhi Mumbai Industrial Corridor, a significant portion of which will pass through the state, is likely to transform its infrastructure.

Rajasthan’s GDP growth rates of the past 33 years show enormous volatility. For example, in 2002-2003, the growth rate nosedived (to minus 10 per cent), but the next year, it surged (to 28.7 per cent). Incidentally, this was the year the Gehlot government was defeated and the Raje government assumed power for the first time.

However, the massive volatility is not a result of regime change. Between 2000 and 2003, Rajasthan experienced two drought years. The economic growth rate nosedived to negative. Arguably, the massive drought might partly explain why the Gehlot government lost the elections despite high growth during its first three years. Rajasthan has suffered several drought years in the past, triggering negative growth. The average volatility post 2003-2004 (3.07 per cent) is much less than in the period before it (11.48 per cent). It suggests that buffer stocks of agricultural commodities improved during the boom years and there was also general improvement.

Compared to the top four states-Maharashtra, Gujarat, Tamil Nadu and Karnataka-Rajasthan had the best agricultural growth rate (2.63 per cent) between 2011-12 and 2014-15, with the exception of Gujarat. But in the Hindi heartland, for the same periods, MP (9.94 per cent), Chhattisgarh (3.87 per cent), Himachal Pradesh (3.89 per cent) and Jharkhand (2.9 per cent) were ahead of Rajasthan. Rajasthan could beat only UP.

In industry, Rajasthan has the second lowest growth rate of 3.49 per cent, just ahead of MP (2.06 per cent). In services, its growth rate of 7.7 per cent is close to that of India’s (7.89 per cent). But when compared to the Hindi belt, Rajasthan ranks after Bihar (9.2 per cent), HP (8.36 per cent), Haryana (8.23 per cent) and Uttarakhand (8.04 per cent). Rajasthan’s agriculture grew at a compound annual growth rate (CAGR) of 2.63 per cent between 2011-12 and 2014-15. This is higher than the average agricultural growth rate of India (1.79 per cent). In industry, Rajasthan’s growth, at 3.49 per cent, is much slower than India’s (5.48 per cent). Overall, Rajasthan has grown at a slower pace than the country between 2011-12 and 2014-15.

But helped by reforms, Rajasthan today is much better off. It has considerably reduced its debt to GDP ratio, from an average of 36.6 per cent during 1999-2000 to 24.9 per cent in 2014-15. But the reforms haven’t yet penetrated enough to change macro-economic data when compared to the faster-growing states.

Planning in rajasthan

The basic objectives of the successive Five Year Plans has been to achieve a significant step up in the rate of growth of the State’s economy, optimum utilisation of benefits from potential already created, and improving the living conditions of the people specially of the weaker sections. At the time of initiation of planning in 1951, the state was involved in problems of integration and so there was lack of basic statistical data required for planning the state.

With the scrapping of planning commission, the era of Five years plans has come to an end. The 12 Five year plan (2012-17) was India’s last Five Year Plan. The Niti Aayog, which has replaced the Planning Commission, has launched a three-year action plan from April 1, 2017. Niti Aayog has also been entrusted the work on the 15-year Vision Document and a seven year strategy, which would guide the government’s development works till 2030.

The current Government of Rajasthan has taken steps to create a policy environment that nurtures private enterprise and makes investing in the State profitable. In addition to a general package of financial incentives, sector-specific policies have been formulated to promote investment.

In 2016,Department of Industrial Policy & Promotion (DIPP) in partnership with the World Bank conducted assessment of the states’ implementation of DIPP’s 340-point Business Reform Action Plan (BRAP)for 2015-16. Rajasthan implemented 96.43% of the BRAP,as against 98.78% implementation score of Andhra Pradesh and Telangana, which led the ranking. Overall, Rajasthan stood at 8 position in Ease of Doing Business Index among Indian States.


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