Rajyavardhan Singh Rathore, Rajasthan’s industry and commerce minister talks about why the state is suited to become a hub for investments. Edited excerpts
What kind of incentives are you planning to offer to attract foreign investors?
Our intention and commitment to positively change the economic environment in Rajasthan is demonstrated by the fact that despite the challenges of [forming the new state] government and with very little time, we had a global event [the second edition of the Rising Rajasthan Summit] and reached out to more than a dozen nations.
About 35 countries are participating in it, a large number of them are partner countries and we have signed a number of MoUs [memorandums of understanding].
The interest is tremendous. We have two governments [central and state] working in sync, and this is a reason for the huge investments and confidence. We had done our homework before Rising Rajasthan and we were clear that when we do this outreach, we have to live up to what we promise.
Rajasthan has had single window clearance, but we have turned that into an efficient machinery, bringing in transparency using IT [information technology] structures so the clearances are faster.
We have identified the usual bottlenecks and come up with 21 new policies. For example, ‘one-district-one-product’ policy, private industrial parks policy, textile and apparel policy, land aggregation policy; we have come up with a policy for every sector and an MSME [micro, small and medium enterprises] policy as well.
This is to bring clarity to investors. For the next five years, we will have a senior bureaucrat and an IAS officer [as a point of contact] for the countries that we visited and that are supporting us, so that queries can be addressed effectively.
Even for states, we have one administrative officer each. We also realised the importance of non-resident Rajasthanis. So, there are a lot of incentives, clarity in policies, easy acquisition of land, faster clearance of files and single-window clearance.
You mentioned addressing bottlenecks. How do you plan to address them?
For any business to do well, certain important factors need to be considered. A major one is land. The cost of land has to be viable. The location of the land has to be as per the requirement.
The previous government used to auction land. The cost would be sky-high. Real estate people would jump in [to capitalise on this]. The government would earn one-time money, but no industry would come up.
We are now going to have a lottery system for MSMEs for acquisition of land. That means the cost comes down. We are keeping costs low, so business is viable. As soon as the business comes up, multiple small-business units will come up to support that one business.
Similarly, there are gaps where the cost becomes prohibitive for business. For example, we have a large export volume of furniture, but the furniture must be taken all the way to the ports in Gujarat. The transportation cost adds up.
So, we have come up with another policy to cover the gap. Our policies have been made in comparison with policies in other states.
Foreign direct investment in Rajasthan has gone down from Rs 7,218 crore in 2022–23 to Rs 2,195 crore in 2023–24. Why is that? Can the summit help it recover?
The previous [state] government had very poor policies. Many schemes that were centrally funded were also hampered in terms of execution. But these days, the [central] government is pushing for a special economic zone in different states and to boost industrial parks.
How do you plan to keep Rajasthan competitive against other states?
A lot of businesses are interlinked. Everything is not produced by one entity. There are a lot of interdependencies.
Geographically, we are ideally located, in proximity to Delhi, the NCR [national capital region] and we do not suffer from pollution. 500km of the [dedicated] freight corridor passes through Rajasthan. 150km on both sides of that corridor is available for business. So, between Delhi, Mumbai and NCR and our geographical location, we have access to about half the market of India.
The state has abundant raw materials and is rich in minerals, key sectors being mining and petrochemicals. It boasts a skilled and educated workforce without labour union issues.
Additionally, it has ample sunlight for renewable energy and potential for tourism. We have everything going for Rajasthan. I believe that we are ideally suited for becoming a hub for investments for people within the country or outside.
The Invest Rajasthan Summit 2022 received 4,195 memorandums of understanding (MoUs) and letters of intent. How many investments have come from those MoUs?
They [the previous state government] organised the investment summit in the fourth year of their governance in a rush. The fifth year was elections. In the fourth year, if you are organising a summit, it is merely to hog the limelight and perhaps create a facade of positive intent for investments.
So, they did not have the time or the energy or the bureaucracy [to execute the MoUs], knowing fully well that the next year would be elections. That's one of the reasons why we were very sure we would do it [the Rising Rajasthan summit] in our first year.