Rajasthan has emerged, under Ashok Gehlot’s second tenure as Chief Minister, as one of India’s most progressive states with all-round development across industry sectors and a special focus on inclusive growth and development. A Business Barons special report.
Rajasthan, India’s largest state by area, is uniquely efflorscent among the country’s 35 states and union territories. It has a varied topography, a skilled workforce and a deep sense of history and culture.
Under the Chief Ministership of Ashok Gehlot, Rajasthan has become an amalgam of the best of traditional Rajasthan and modern, forward-looking, investor-friendly Rajasthan. A magnet for tourists, Indian and foreign, Rajasthan has also become a haven for inbound investment with exponential growth in infrastructure, manufacturing and services.
Chief Minister Ashok Gehlot has overseen the rise of Rajasthan since he became Chief Minister of the state for the second time. Mr. Gehlot is not a laptop-and-Blackberry Chief Minister. Rather, he has a symbiotic relationship with the masses and strongly believes in development with a human face. This has led to the popular Chief Minister being widely known as the messiah of the destitute and the masses and the “Gandhi of Marwar”.
Indira’s Protégé
Ashok Gehlot received a sound grounding in public life under the tutelage of former Prime Minister Indira Gandhi. She handpicked him in the early-1980s and he quickly showed exemplary administrative and organizational skills. Mr. Gehlot’s rise up the Congress hierarchy was rapid. He held several Union Ministerships: he was Union Deputy Minister for Tourism and later Sports.
In the Rajiv Gandhi government, Mr. Gehlot was Union Minister of State for Tourism and Civil Aviation. Prime Minister Narasimha Rao showed the confidence the Congress high command reposed in him by appointing him Minister of State (Independent Charge) for Textiles. Mr. Gehlot’s style of functioning has always combined humility with efficiency. This has so endeared him to the Congress high command that no decision in the state is taken without his approval. Mr. Gehlot’s three-decades-long political career has enabled him to garner a deep knowledge of development issues in Rajasthan.
Whether it was in defusing the Gujjar problem without rancour or constraining the liquior trade, Mr. Gehlot has demonstrated political acumen, tact and an empathy for those living on the margins of poverty and destitution.
When he returned to the Chief Minister’s post after a gap of five years, several problems confronted the Gehlot administration. The sensitive Gujjar agitation had already clained 64 lives earlier. It was solved in 64 days. The Gehlot Cabinet was given a detailed roadmap. Reforms were clearly necessary. Mr. Gehlot focused his and his cabinet’s attention on investment, infrastructure, tourism, information technology and the social sector.
Governance and transparency were emphasized. Education, providing clean water and power to every town and village, improving the PDS and implementing new irrigation technology were given a sharp impetus by Mr. Gehlot since they directly impact the lives of the common man.
Housing for all was another focus area. Mr. Gehlot ensured through the JDA that affordable housing was made available to all. Inclusive development is the leit motif of Mr. Gehlot’s work and every section of society benefits from the Chief Minister’s inclusive, all-embracing agenda.
As he moves into the second year of his Chief Ministership, Mr. Gehlot is mindful that several challenge – and opportunities – lie before him. It requires sagacity and skill to navigate these successfully across a range of diverse domains.
Mining Riches
Rajasthan is minerals-rich. There are 2,360 mining leases for major minerals and 10,113 minor leases and 16,082 quarry licenses in the state. Mineral surveys and prospecting on eight projects of base metals, three projects of noble metals, ten projects of limestone and two projects of lignite have been taken up.
All of these could make Rajasthan the largest mineral resource earner in the country. Moreover, Mr. Gehlot has plans to make Rajasthan an oil and gas hub. He is inviting energy companies to set up petrochemical plants and refineries in the state in Barmer.
The Tripathi committee, appointed by the Rajasthan government to study future prospects of the oil and gas sector in the state, has recommended a 4.5-6 MT refinery in Barmer. “The initial cost of the project would be Rs. 9,228 crore which can later be expanded to 9-12 MT,” the report recommends.
This is not all. The Rajasthan government is also planning to explore Coal Bed Methane (CBM) deposits in Bikaner. This is the first-ever exploration effort of the state government in the field of natural gas. The central government has given a grant of Rs. 3.72 crore for research and development work in the Bikaner basin where huge deposits of CBM are likely. Coal-bed methane is a clean burning fuel for domestic and industrial uses, and its extraction reduces explosion hazards in underground coal mines. Large reserves of bituminous coal of Paleozoic and Tertuary ages within the CBM window have been estimated in Rajasthan at depths of nearly 250-1,200 meters. The availability of gas in this region will ensure uninterrupted gas supply to power plants in the state. It will also promote the ceramic industry in the state as easy availability of gas will bring down the operational cost of ceramic plants from 24% to 7%.
Entrepreneurship
With so much industrial activity on the anvil, Rajasthan is attracting entrepreneurs who are drawn to the state by its investor-friendly policy. As a state, Rajasthan has produced world-class entrepreneurs itself – from the Birlas and Goenkas to the Mittals and Ruias. They took the spirit of entrepreneurship, rooted in the soil of Rajasthan, to every corner of the world. Now modern, 21st-century Rajasthan is attracting inbound entrepreneurship. And the foundations for this are being laid by the state with impeccable professionalism.
The Messiah of the Masses.
KPMG and TiE 2009 jointly conducted a study on entrepreneurship preference and ranked Rajasthan as the third most favourable destination in the country for investment and business. Rajasthan today is home to several MNCs like GE, Gillete, Electrolux, Ericsson, Corning, Federal Mogul and Mico Bosch. Moreover, Honda, St. Gobain, Lafarge Boral and Metso have also announced their presence in the state. A number of Japanese units have also set up units in the Neemrana Japanese Zone.
Recently, Honda doubled its presence by setting up a facility for two-wheelers. Honda already has a car plant in the state and is expected to make an investment of Rs. 1,000 crore in Rajasthan which will help provide employment to about 13,000 people.
Mr. Gehlot laid the foundation stone for the production plant of Honda Motor Cycles and Scooter India (Pvt) Limited. He said that a well-planned effort is being made to put Rajasthan on the country’s industrialsation map. He appealed to industrialists to invest in the state. “The state is working on strengthening its infrastructure and providing industries with facilities like a developed road network, water and power,” he said. By 2013 Rajasthan would be a surplus power state, for which the state government has cleared five new projects, he added.
Industry Forges Ahead
Rajasthan has steadily emerged as one of India’s most industrialized states. Gone is the old stereotype of a state long on tourism and culture and short on industrial development and infrastructure. Rajasthan State Industrial Development and Investment Corporation (Riico) has catalysed a silent industrial revolution. As many as 322 industrial areas have been developed in the state. RIICO has also set up several special economic zones (SEZs) with themes such as agro parks (in Kota, Jodhpur and Sriganganagar), biotech parks (in Jaipur, Jodhpur and Bhiwandi) and an apparel park in Jaipur.
RIICO Managing Director Rajendra Bhanwat said that the agency will acquire 1,088 ha private land and 819 ha government land for the development of new industrial areas. These areas will be developed in Jodhpur, Bhilwara and Sikar districts. “With almost 40 percent of Delhi Mumbai industrial Corridor (DMIC) passing through Rajasthan, we have decided to create an industrial land bank,” he said. He added that RIICO will be acquiring 459.25 ha private khatedari land on the Jodhpur-Pali road and 175.50 ha government land for developing a new industrial area.
Incremental growth in areas such as ceramics – Rajasthan’s traditional strength – will occur once natural gas, a vital ingredient in ceramic manufacture, is harnessed. The availability of natural gas in the Neerana-Bhiwadi industrial zone is being addressed by the Gas Authority of India Limited. RIICO has drawn up plans to roll out this zone by next year. “GAIL is likely to commission the Chainsa-Jhajjar spur line (Sultanpur-Neemrana) gas pipeline project by this year. It will meet the gas demand of consumers in Haryana and Rajasthan at various locations like Chopanki, Bhiwadi, Dharuhera, Khushkhera, Neemrana, Gurgaon, Khandsa, Manesar and Banmoli,” said a state official.
IT and biotech are other big areas on which the Rajasthan government is focusing its energies. The current consumption of biotechnology products in India is around Rs. 90 billion which is expected to increase to Rs. 234 billion by 2010. The healthcare sector would contribute 38% of the market, agriculture 32% and industrial products 30%. The small-scale sector is expected to play a major role in the growth of the biotech industry. Rajasthan is rich in bio resources. The state provides tremendous biodiversity, rarely found in any other state. To attract investment in the biotechnology, sector, RIICO is considering developing state-of-the-art biotech parks at Jaipur, Jodhpur and Bhiwadi (Alwar).
Powering Ahead
Power is at the heart of development. Rajasthan is moving rapidly to achieve self-sufficiency under Mr. Gehlot’s proactive leadership. The installed capacity in the state is 7,716.63 mw. The total installed capacity in the year 2009-10 was 697.5 mw. As a step towards becoming self sufficient in power generation, Mr. Gehlot announced the setting up of six more power plants with a capacity of 4,780 mw during the upcoming twelfth five-year plan. The Chief Minister also has ambitious plans in new and renewable energy. As he observed recently, Gujarat and Rajasthan are two states with potential in solar power. This move towards green, clean energy is clearly the future for both Rajasthan and India.
The state government is aiming to be self-sufficient in power by 2013-14. “At present, we are generating nearly 8,000 mw. We are planning to increase it to 15,000-18,000 mw in the next three years. For this the state government would be commissioning two power plants of 1,320 mw each besides intiving a private player to start a super critical power plant at Banswara,” said Power Minister Jitendra Singh.
The state government is eyeing non- conventional energy sources in a big way. It is framing a new policy on bio mass and a solar energy policy to promote these forms of energy. According to Rajasthan Renewable Energy Corporation, the state has received investment proposals worth Rs. 1 lakh crore in the solar energy sector. Rajasthan would be the hub of solar energy in the country. Under the Rural Electrification Programme 38,332 villages had been electrified and about 9.47 lakh wells energised by the end of December 2009. The state government has announced that the electricity tariff would remain the same for farmers for the next five years. Farmers in the canal area of Bikaner, Hanumangarh and Ganganagar would be provided three-phase electricity if they follow the drip/sprinkle irrigation system.
Water Plans
Rajasthan faced a drought-like situation in 2009 though this year’s monsoon promises to be much better. And yet, the Gehlot government is planning to harness its water resources even in years of shortage. Rajasthan is the largest state in the country covering an area of 34,271 million, half of which is more than 10% of the total geographical area of the country. About 5% of the total population of the country resides in the state and it has more than 15.7 million ha of land suitable for agriculture. Rajasthan is one of the driest states in the country and the total surface water resources in the state are only about 1% of the total surface water resource of the country. The rivers of the state are rainfed and identified by 14 major basins divided into 59 sub-basins. The entire body of water–related laws and regulations will eventually be amalgamated into a State Water Law, which would, in addition to the above subjects, establish state ownership of all water resources within the state as well as waters imported from outside the state under various agreements and the requirement for any public or private entity or individual to obtain from the Government a permit to abstract surface water or groundwater, to utilize it, to sell or distribute it, or to dispose off after use.
The state has also been active in re-establishing the depleting green cover and also encouraging eco-tourism. Under its first ever eco-tourism policy, Rajasthan has decided to open up the state’s eco-systems to tourists and wildlife lovers. The eco-tourism policy finalized by the Department of Forests and Wildlife allows tourists to go trekking on designated routes through unexplored areas, river cruising to view wildlife, overnight camping at forests and rest houses in forests and natural ecosystems. There are two national parks and 25 sanctuaries in the state spread across 0.916 million ha. The state also has forts, monuments, palaces and heritages sites adjacent or inside the forests areas. The importance of these sites for education and recreational purposes has been realised recently. People seek to visit these sites to enjoy natural and historical splendor. Though the number of foreign tourists has doubled in the last four years, there has not been a significant rise in the number of eco-tourists.
The Agri-Revolution
While promoting conventional agriculture, the state – which is a major producer of oilseeds and spices and a variety of cultivable crops – is innovating with agro-processing and agri-business. These are high-value and have great potential to make Rajasthan a hub for modern agri products.
Housing and Health
The two most important aspects of ordinary peoples’ lives are home and health. The Rajasthan government has specific and ambitious plans in both areas. Mr. Gehlot’s pro-poor and pro-development agenda has made him conscious of the need for affordable housing and universal healthcare.
The major focus of the housing policy is to include the homeless and residents of kachchi basti who find it difficult to live a trouble-free life. Learning by experience and with a will to reduce the housing shortage in the state, the state government has decided to take up large-scale construction of ‘affordable housing’ with a focus on EWS and LIG.
In healthcare, Mr. Gehlot wants to provide medical care to the poorest (BPL) families. Apart from building well-equipped hospitals and healthcare centres, the state government is also keen on providing inexpensive medicines to people. For this it is opening medical stores in all district hospitals which can provide inexpensive generic medicines. It is also planning to set up 450 medical stores across the state. The Chief Minister takes special care of the BPL family through the Chief Minister’s BPL Jeevan Raksha Kosh. The scheme provides free treatment and assistance to indoor and outdoor patients belonging to BPL families, state BPL families, Astha card holders and those suffering from HIV/AIDS. During 2009, an amount of Rs. 38.68 crore was given as advance to various medical institutions to run the scheme which benefited 19.94 lakh patients in the pervious year.
Meanwhile, the state is encouraging corporates – who have evinced great interest in the project – to build high-quality hospitals to ignite medical tourism which could be an outstanding revenue source.
In sum, the Rajasthan government is combining modernity and traditional values to create a progressive, dynamic state. Chief Minister Ashok Gehlot’s second tenure promises to be even more productive than the first as Rajasthan emerges as a world-class destination across sectors with development and humanity as central pivots of policy.
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