Investment Climate in Rajasthan

Investment Climate in Rajasthan

Contents

Economic and Demographic Profile 1 Economic Profile 1 Demographic Profile 2Physical Infrastructure 3 Power 3 Roads 4 Railways 4 Delhi Mumbai Industrial Corridor 4 Airports 5 Telecom 5Social Infrastructure 5 Health 5 Education 6Industrial Profile 7Land Availability 8 Industrial Land 8 Agricultural Land 9Manpower Availability 9State Policies and Incentives 10Investments in the State 10Looking Ahead 11Annexure : Policies 12

• All data is at constant (2004-05) prices unless explicitly stated otherwise

• GSDP stands for Gross State Domestic Product

• CSO data accessed on 18 October, 2012

Rajasthan has emerged as an attractive investment destination with a steady inflow of investments, particularly in the manufacturing sector. The geographical location of the state gives it an easy access to major markets of north-

western India. 23 percent of the National Capital Region, lies in Rajasthan, one of the world’s largest urban agglomeration. The state’s economic performance is propelled by growth in all three sectors - primary, secondary

and tertiary sectors.

Advantage Rajasthan

• Locational advantage because of its proximity to the National Capital Region

• 37 percent of the proposed western Dedicated Freight Corridor and 46 percent of the Delhi Mumbai Industrial

Corridor will fall in the state, providing access to the western and northern markets as well as access to the

western ports of India

• Endowed with vast resources of mineral wealth, the state is an attractive investment destination for mineral

based manufacturing such as cement, ceramics and glass industries

• Well - developed industrial areas and sectoral parks

• Availability of skilled manpower

• Fast developing IT sector, with IT majors such as Wipro and Infosys setting up their facilities

• Focus on simplification of procedures and favourable environment for industries

• Single window clearances for investments greater than Rs 10 million

EXECUTIVE SUMMARY

Source: CSO

Figure 1: Growth of GSDP of Rajasthan

Key Economic Indicator(2011-2012) Value

GSDP Rs. 2,155 billion

Growth in GSDP 5.4 percent

Per capita income Rs 27,421

National per capita income Rs 37,851

Exports (2010-11) Rs 237.5 billion

1

Economic & Demographic Profile

Economic profile

The GSDP of Rajasthan was Rs 2,155 billion in 2011-12 against Rs 1,278 billion in 2004-05, registering CAGR of 7.8 percent. The GSDP contribution of the state in the national GDP is 4.1 percent in 2011-121.

1 CSO

Source: Economic Review of Rajasthan, 2011-12; Government of Rajasthan and CSO

Figure 2: Key Economic Indicators

1,3631,522

1,600 1,745 1,8422,044

2,155

6.7

11.7

5.1

9.1

5.5

11.0

5.4

0

3

6

9

12

0

500

1,000

1,500

2,000

2,500

3,000

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

in p

erce

nt

in R

s bi

llion

Figure 3 : Contribution of different sectors towards the Economy of Rajasthan

The services sector in the state has expanded in the last few years contributing 48 percent to GSDP followed by the industrial and agricultural sectors at 30 percent and 22 percent respectively for the year 2011-12.

Demographic profile

The population of Rajasthan is 68.6 million2. The decadal growth rate for the state was 21.4 percent as compared to national growth rate of 17.6 percent. The density of population of the state is quite low at 201 persons per sq km. The overall sex ratio is 926 females per 1,000 males.

Source: CSO

2 Census 2011 (Provisional)

Key Indicators Value

Population 68.6 million

Population size (Males) 35.6 million

Population size (Females) 33.0 million

Population size (Urban) 17.1 million

Population size (Rural) 51.5 million

Density of Population (persons per sq km) 201

Literacy rate 67.1 percent

Male literacy rate 80.5 percent

Female literacy rate 52.7 percent

Sex ratio (females per 1000 males) 926

Figure 4 : Key Demographic Indicators (2011)

Source: Census 2011 (Provisional)

26

30

44

2004-05

Agriculture Industries Services

22

30

48

2011-12

Agriculture Industries Services

2

3

Physical Infrastructure

Infrastructure forms the backbone of any economy. In this regard, the Government of Rajasthan is taking requisite measures for the development of its infrastructure.

Power

The state has an installed capacity of 10,251 MW3.

Rajasthan has tremendous potential for solar energy due to high level of solar radiation per square inch and large amounts of contiguous, relatively flat, undeveloped land in the state.

The state has renewable energy based installed power generation capacity of 2,372 MW.4 Rajasthan is expected to take a lead in the use of generating power from

solar energy. To harness renewable energy the state is implementing some innovative programmes. Rajasthan Renewable Energy Corporation Ltd. (RREC) is implementing Solar City programme, Remote Village Electrification (RVE), developing Grid Interactive Solar Power Project (MW scale), decentralize and Off-grid Solar Applications and Solar Parks in the state.

New capacity addition expected in the 12th Five Year Plan (2012-2017)5

» Conventional sources - 13,000 MW

» Renewable sources - 3,000 MW

In addition, an Atomic Power Project on the banks of river Mahi in Banswara district is also proposed.

3 Central Electricity Authority, August 2012, including allocated shares in joint and central sector utilities4 Central Electricity Authority5 http://investrajasthan.com

Figure 6 : Services offered by different power companies in Rajasthan

7.8

13.7

17.3

12.8

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0.0

3.7

7.1

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4

8

12

16

20

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2,000

4,000

6,000

8,000

10,000

2004

-05

2005

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-08

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Peak

def

icit

%

MW

Peak Demand Peak Met Peak Deficit %

Figure 5 : Peak demand- supply position in the state

Source : CEA

4

Source : Economic Review of Rajasthan, 2011-12

Figure 7 : Key Road Network (as on March, 2012)

Road Type Road Length (in km)

National Highways 6,576

State Highways 11,388

Major District Roads 9,880

Other District Roads 24,004

Village Roads 138,554

Figure 8: Delhi Mumbai Industrial Corridor (DMIC)

Source: Government of Rajasthan

6 Economic Review of Rajasthan, 2011-12, data as on March 20127 Economic Review of Rajasthan, 2011-128 Economic Review of Rajasthan, 2011-12, data as on March 2012

Roads

The total length of roads in Rajasthan is 190,402 km6 . The road density of the state is 55.63 km per sq km (as of 2011-12). The total length of National Highways passing through the state is 6,576 km. The state is also a part of national level projects, including Golden Quadrilateral, east-west Corridor and north-south Corridor.

To further augment its road infrastructure, the state has undertaken various schemes such as the Missing Link project and the Central Road Fund, through which new roads are being constructed to link all villages in the state. Few initiatives taken by the state include:

• Road Infrastructure Development Company of Rajasthan (RIDCOR) has identified 7 projects under Public Private Partnership pattern for development of state highways and major district roads having a total length of 273.5 km. The proposed cost of this project is Rs 7.43 billion.

• Rajasthan State Road Development & Construction Corporation (RSRDCC) has identified 15 projects for development of state highways and major district roads measuring1,081 km involving a cost of Rs 25.95 billion7.

Railways

The total length of railway network in Rajasthan is 5,780 km. Almost, 4,465 km (77.3 percent) of the railway network is covered under broad gauge, 1,228 km (21.3 percent) under meter gauge and 87 km (1.5 percent) under narrow gauge. The railway route length per 1,000 sq km of geographical area is 16.9 km8 .

Important routes in the state are Jodhpur-Marwar, Jodhpur-Jaisalmer, Lalgarh-Kolayat and Lalgarh-Merta Road station.The state government is planning Metro Rail project for Jaipur city.

Delhi Mumbai Industrial Corridor

The proposed Western Dedicated Freight Corridor (DFC) connecting the Jawaharlal Nehru Port near Mumbai with Dadri near Delhi is 1,483-km long rail corridor. Around 37 percent of the corridor will pass through Rajasthan, creating new opportunities for companies located in Rajasthan to access the large western

and northern domestic markets, as well as international markets via ports on the western seaboard. This will also provide high speed, double stacked container rail connectivity that will reduce transit time, costs and increase reliability.

A stretch of 150 km has been chosen on both the sides of the Western DFC is proposed to be developed as the Delhi Mumbai Industrial Corridor (DMIC). Around 46 percent of the DMIC falls in Rajasthan, which constitutes about 60 percent of the State’s geographical area. The project influence area of DMIC will positively impact major districts such as Jaipur, Alwar, Jodhpur, Pali and Bhilwara. The DMIC will provide a high quality environment with state-of-the-art infrastructure for new investors. Khushkhera-Bhiwadi-Neemrana region is being developed as an Integrated Industrial Township in the first phase and Jodhpur-Pali-Marwar area is being developed as a second node. Development plans under DMIC include:

• Greenfield Integrated Township: Within the Investment Region of Khushkheda-Bhiwadi-Neemrana: It is to be developed as a model future city spread over 160 sq km having a world class knowledge city.

• Greenfield Airport/Aerotropolis: A world-class integrated logistics warehousing hub.

• Jodhpur-Pali-Marwar Investment Region: To be developed as an integrated township with a new civil airport, integrated multi-modal logistics hub and mass rapid transit system (MRTS) and well connected road network.

DMIC intends to mitigate the limitations of Rajasthan as a land-locked State and will generate ample opportunities for development.

Telecom

Rajasthan has 50.3 million telecom subscribers and an overall teledensity of 72.9.10

Wireless and wireline service providers in the state include :

• Bharti Airtel • Aircel • Reliance Communication • Vodafone • Tata Teleservices • Bharat Sanchar Nigam Limited • Idea

Social Infrastructure

Health

Rajasthan has well developed health infrastructure.

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9 Airports Authority of India ,http://www.aai.aero/allAirports/jaipur_generalinfo.jsp10 The Indian Telecom Services Performance Indicators (January – March 2012), The Telecom Regulatory Authority of India

Airports

Rajasthan has full-fledged airports at Jaipur, Bikaner, Kota, Jodhpur, Udaipur, and Jaisalmer. Jaipur has an international airport providing connectivity to Dubai, Sharjah, Bangkok and Singapore. The domestic and international traffic handled by the Jaipur airport during 2011-12 was 15,95,655 passengers and 2,32,649 passengers respectively.9 Moreover, air strips and helipads exist at a number of other locations.

To facilitate trade on both within and outside India, the state has an Air-Cargo Complex at Jaipur and Inland Container Depots (ICD) at Jaipur (2), Jodhpur (3), Bhilwara and Bhiwadi.

In addition, a total of 3,708 Ayurvedic Hospitals/Dispensaries including Naturopathy & Yoga along with 7 Mobile Units are functioning in the state.

To improve the healthcare facilities of the state, a number of initiatives such as the Chief Minister’s Jeevan Raksha Scheme and the World Bank assisted Rajasthan Health System Development Project have been taken up. Further, a few activities have been sanctioned during the year 2011-2012, which include11:

• Construction of new buildings of Community Health Centre, Kekri (Ajmer)

• Creation of 116 posts of Lab Technicians at City Dispensaries/Community Health Centres (CHCs)/Primary Health Centres (PHCs)12

• Upgradation of 35 Primary Health Centres (PHCs) to Community Health Centres (CHCs)

• Establishment 50 new PHCs along with creation of posts

Rajasthan is also one of the 18 high priority states under National Rural Health Mission programme (NRHM, 2005-2012). NRHM aims to provide effective healthcare to rural population throughout the country and to raise public spending on health from 0.9 percent of GDP to 2-3 percent of GDP. 13

Institutions Number

Hospitals 108*

Dispensaries 195

Primary Health Centres (PHCs)-Rural

1,612

Primary Health Centres (PHCs)-Urban

37

Community Health Centres (CHCs) 428

Maternity and Child Welfare Centres

118

Aid Posts (Urban) 13

Sub-Health Centres (SHCs) 12,696

Figure 9 : Summary of health institutions (Allopathic) in the state (as on December, 2011)

Source: Economic Review of Rajasthan, 2011-12* Excluding Medical college hospitals

Name of the system

District Hospital (Bedded)

Hospital(bedded)

Dispensary Mobile Unit Grand Total

Urban Rural Urban Rural Urban

Ayurvedic 18 45 55 3,389 188 7 3,702

Naturopathy & Yoga

- - 3 1 2 - 6

Figure 10 : Distribution of Ayurvedic and Naturopathy institutes in the state (as on December, 2011)

Source: Economic Review of Rajasthan, 2011-12

Key Indicator Value

Birth rate* 26.2

Death rate* 6.7

Infant Mortality Rate** 55

Figure 11 :Key Health indicators

Source: Sample Registration System, 2011Note: * per 1000 population ** per 1000 live births

11 Economic Review of Rajasthan, 2011-1212 Economic Review of Rajasthan, 2011-1213 National Rural Health Mission (2005-2012), Mission Document

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Education

The state has 49,210 primary schools with 224,818 teachers and 55,980 upper primary schools with 235,396 teachers with a total student enrollment of 12.5 million14.

In terms of secondary education, the state has 15,504 secondary and 8,189 senior secondary schools, out of which 8,108 secondary and 3,137 senior secondary schools are in the government sector. The total number of students enrolled is 3.2 million.

The state government is working towards developing Rajasthan as a Center of Knowledge and is taking initiatives to encourage Knowledge Hubs in the state. As a result of this many institutions have come up in the state , specially in the private sector.

Prestigious academic institutions in Rajasthan include BITS (Birla Institute of Technology & Science) Pilani, The Mayo College in Ajmer and Raffles University (Singapore) in Alwar. In addition, several well known institutions are currently establishing campuses which include:

• IIT (Indian Institute of Technology), FDDI (Footwear Design & Development Institute) and NIFT (National Institute of Fashion Technology) in Jodhpur

• IIM (Indian Institute of Management) in Udaipur

• Central University at Ajmer

Course InstitutionsGovernment Private

Total

Medical College 7 2 9

Dental College 1 9 10

B-Pharmacy - 40 40

D-Pharmacy 1 23 24

M-Pharmacy - 17 17

B.Sc Nursing 1 140 141

Figure 12 : Distribution of medical institutes in Rajasthan (2011)

Source: Economic Review of Rajasthan, 2011-12

14 Economic Review of Rajasthan , 2011-12

Figure 13 : Distribution of institutes for Higher Education (2011)

Source: Economic Review of Rajasthan, 2011-12

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Industrial profileIndustries Department, Office of the Commissioner of Industries, Bureau of Investment Promotion (BIP), Rajasthan State Industrial Development and Investment Corporation (RIICO), Rajasthan Financial Corporation (RFC), and Project Development Corporation are the agencies facilitating industrial development in the State. The State Government has investor-friendly sector-specific policies which include The Rajasthan Industrial and Investment Promotion Policy, 2010, The Rajasthan Investment Promotion Scheme (RIPS 2010), Policy for Promotion of Agro-Processing and Agri-Business, 2010, The IT Policy 2007, The Tourism Policy 2007, etc.

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

The state is among the largest mineral producing states in India with 58 minerals out of available 79 varieties of minerals being produced on a commercial scale. Important minerals are silver, phosphate fluoride, rock phosphate, copper, zinc, gypsum, clay, granite, marble, sandstone, dolomite, calcite, emeralds and garnets limestone, lignite etc. In 2009-10, Rajasthan was the sole producer of lead concentrate, zinc concentrate, calcite and wollastonite in India. Almost the entire production of silver, ochre and mineral gypsum, in the country is from the state.

The availability of clay and feldspar in Rajasthan makes it an excellent location for ceramic-related industry (e.g., white-ware, floorings and bone-china). To tap the potential of this sector, a dedicated Ceramic & Glass (Industrial) Zone is being developed at Ghilot near Neemrana in Alwar district. Incentives are available for investment under a package for promotion of Ceramics and Glass industries.

Rajasthan is the second highest cement producing state in India with a share of about 15 percent in the total cement production in the country. As of March, 2012, Rajasthan had 19 projects with aggregate Cement capacity of 38.8 million tonnes per annum (MTPA). More than 10 cement plants will be installed in the State in near future, particularly in Chittorgarh, Jaipur, Jhunjhunu, Nagaur and Pali given the availability of huge cement grade limestone reserves in the state.

Rajasthan is also endowed with mineral oil. The Mangala, Bhagyam and Aishwariya (MBA) fields, among others, constitute Cairn India’s key assets in Rajasthan. The MBA are the three largest finds in Rajasthan. The Mangala field — considered to be the largest onshore hydrocarbon finds in India in last two decades — was discovered in January 2004. This was followed by discoveries at the Bhagyam and Aishwariya fields. To date, 25 discoveries have been made in the Rajasthan block. Studies indicate that it has further potential for growth. The Rajasthan block’s resource potential was estimated at 7.3 bn boe gross in-place. There have been exploration upsides with the prospective resource base rising from an earlier estimate of 2.5 bn boe gross in-place to 3.1 bn boe gross in-place.

The state offers excellent advantage for setting up of auto and auto ancillary units especially in Alwar district due to its close proximity to major auto production hubs of the country such as Noida (Uttar Pradesh), Gurgaon and Dharuhera (Haryana).

Nearly 100 units are currently functional in Bhiwadi, Neemrana and Pathredi in Alwar district, Rajasthan. A special auto and engineering zone has also been developed in the Pathredi Industrial Area and another special zone is being planned in Bhiwadi.

Rajasthan’s textile industry with a network of backward and forward linkages, offers significant competitive advantage. Rajasthan has a leading position in the production of polyester viscose yarn and synthetic suiting material as well as processing of low-cost, low-weight fabric (at Pali, Balotra, Sanganer and Bagru). Jaipur is also a well-known centre for manufacturing garments, primarily for exports. Bhilwara has emerged as India’s leading manufacturer of suiting fabrics and yarn.

Major horticulture fruits include ber, aonla, pomegranate and guava. Leading producer of mustard and rapeseed spices viz. fenugreek, cumin seeds and coriander, guar and maize. Spices such as coriander and ajwain including cumin and fenugreek are being exported outside India. Apart from this, medicinal crops such as sonamukhi, mehandi, and kalonji are being exported to Dubai.

Huge potential for dairy farming exists in rural areas in the state. The state has the 3rd largest cattle population in India with some of the finest breeds of milk and draught cattle. Rajasthan is 3rd largest producer of milk in India with an annual production of 9.54 million tonnes (2009-10), accounting for 8.4 percent of the country’s milk production. In addition, the state is the largest producer of wool in the country with an annual production of 12,529 tonnes in 2009-10.

With its rich cultural and historical background Tourism accounts for over 15 percent of the State’s economy. The state ranks 5th in the country in number of domestic tourists’ arrival (3.9 percent of total domestic tourists) and 6th in number of foreign tourists arrival (7.8 percent of total foreign tourists). The State operates famous luxury tourist trains - Royal Rajasthan on Wheels and Palace on Wheels - that connect some of the important tourist destinations of Rajasthan with Delhi and Agra (in Uttar Pradesh). Popular tourist destinations in the State include historic cities (Jaipur, Udaipur), wildlife sanctuaries (Sariska, Ranthambore) and desert locations (Jodhpur, Jaisalmer, and Bikaner). Jantar Mantar (Jaipur) and Keoladeo Ghana National Park (Bharatpur) have been included in the list of World Heritage Sites of UNESCO.

Gems & Jewellery constitute 17 percent of India’s export, of which a significant contribution comes from Rajasthan. Jaipur is one of the most important & vibrant Gems & Jewellery clusters in the country. Close to 300 years old, Jaipur is world’s largest center for cutting and polishing of coloured gemstones. Over the past decade, the industry has witnessed a complete transformation. With heavy investment in technology, gemstone cutters have forward integrated and have started jewellery manufacturing. 80 percent manufacturers produce gems and balance 20 percent jewellery. There are 100 active exporters and 1500 sub-contractors in Jaipur. The industry provides employment to almost two lakh persons directly and indirectly. A wide pool of skilled manpower - designers as well as artisans - is available in the region. A number of training institutions also exist for capacity building.

8

Figure 14 : SEZs

Source: RIICO and KPMG Research

Land AvailabilityIndustrial Land

Easy availability of land is a very important factor for promoting industrial development.

Rajasthan State Industrial Development & Investment Corporation Ltd (RIICO) is the sole government agency in the state involved in development of land for industrial enterprises. RIICO has embarked upon creation of Special Purpose Industrial Parks.

RIICO has developed 323 industrial areas in Rajasthan.

Type Location

Special Economic Zones Jaipur and Jodhpur

Agro Food Parks Kota, Jodhpur, Sriganganagar & Alwar

Export Promotion Industrial Parks Jaipur, Jodhpur and Neemrana

Information Technology Parks Jaipur, Jodhpur, Kota and Udaipur

Gems & Gold Jewelry Complex Sitapura ,Jaipur

Textile City Bhilwara

Leather Complex Manpur Macheri

Ceramics Complex Khara & Bikaner

Minor Mineral Complexes Karauli ,Sawai Madhopur, Dhoinda in Rajsamand & Mitrapura in Dausa

Bio-Tech Parks Sitapura- Jaipur

Figure 15 : Summary of Industrial Parks in Rajasthan

Agro Food Park

4 Agro Food Parks in Kota, Jodhpur, Sriganganagar and Alwar for development of agriculture based industries developed by RIICO with an investment of Rs 614 million15.

Export Promotion Industrial Parks (EPIPs)

EPIPs have been set up at Sitapura in Jaipur, Neemrana in Alwar and Boranada in Jodhpur. The EPIP at Jaipur is the largest export park in northern India.

Special Economic Zones

3 Special Economic Zones (SEZs) has been developed by RIICO in the state which are:

• Gems and Jewellery in Jaipur (2 in number)

• Handicrafts in Jodhpur

Besides RIICO SEZ’s, the Government of India has approved the following SEZs for the state.

Type Numbers

SEZs (notified and operational) 3

SEZs notified 6

SEZs formally approved 1

SEZs approved in-principle 12

Total 22

Source: RIICO

Fig 16 : List of SEZs in Rajasthan

15 http://investrajasthan.com/cms.php?id=8&media=print

Source: RIICO

Jaipur

Bikaner

Jodhpur

Khushkera, Bhiwadi

RAJASTHAN

Ajmer

JAIPUR Mahindra world city Ltd

(Handicrafts,IT/ITeS andengineering)

Vatika Jaipur SEZ RIICO SEZ (Gems and Jewellery) Genpact

KHUSHKERA, BHIWADI Somani worsted Ltd.

JODHPUR RIICO SEZ (Handicrafts)

BIKANER RNB Infrastructure

International Airport

DMIC Investment Region -Khushkhera-Bhiwadi-Neemrana Investment Region

DMIC Investment Region - Ajmer-Kishangarh Investment Region

Dedicate Freight Corridor

Capital City - Jaipur

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Mahindra World City

In partnership with RIICO, Mahindra & Mahindra Group has established Mahindra World City (MWC), a multi-product SEZ in Jaipur spread over an area of 2,500 acres equipped with high quality infrastructure. MWC already has signed agreement with about 41 companies, including Infosys Ltd., Infosys BPO, Wipro, Deutsche Bank, ICICI Bank, QH Talbros, Connexions, Nagarro Software, Tech Mahindra and JCB India for IT, engineering and handicraft SEZ zone. The IT zone in the Mahindra World City is spread over 750 acres, one of the India’s largest IT SEZ with plug-and-play facilities and robust connectivity.

Japanese Zone in Neemrana

The state has developed an industrial estate in Neemrana dedicated to Japanese investors. So far 446 acres of land has been allotted to 42 Japanese companies out of which 20 companies have started commercial production and 11 have started construction work.

A total investment of Rs 39.8 billion is expected from these projects creating employment opportunities for approximately 8,550 people16.

Agricultural Land

Agriculture plays an important role in the economy of the state with net area sown accounting for 53.5 percent to the total reporting area.

Type Numbers

IT/ITES 1

Handicrafts 2

Engineering including related industries

1

Gems and Jewellery 2

Source: RIICO

Fig 17 : List of notified and operational SEZs in Rajasthan (including RIICO’s SEZs- sector wise)

Land type Area in (lakh ha)

Forest 26.60

Land put to non-agricultural use 17.60

Barren and uncultivated land 24.98

Permanent pastures and grazing land 17.08

Land under miscellaneous tree crops 0.14

Culturable waste land 45.46

Fallow other than current fallow 24.07

Current fallow 12.75

Net area sown 173.94

Total cropped area 216.64

Source : http://www.planning.rajasthan.gov.in/

Figure 19 : Land Utilisation pattern in Rajasthan (2010-11)

Manpower Availability

The focus of the state is on skilling the youth so that quality manpower is made available to the industry. With this agenda, the state government aims to project Rajasthan as a Center of Knowledge17 and is taking initiatives to encourage creation of knowledge hubs in the state. Jaipur, with the IIT and the Jaipur National University, has the potential to become one of these hubs.

134 ITIs (including 8 for women) with 30,704 seats in the public sector and 691 ITIs with 78,709 seats in the private sector are functioning in the state and providing vocational training in engineering trades and non-engineering trades18.

Courses Number Intake

ITIs / ITCs 825 109,413

Engineering 127 54,500

Management 134 10,500

Polytechnic 177 47,050

Figure 20 : Technical Institutes (2011)

Source: Economic Review of Rajasthan, 2011-12

16 Government of Rajasthan17 Mr. S Ahmad , Former Chief Secretary, Rajasthan18 Economic Review of Rajasthan, 2011-12

Figure 21 : Distribution of Polytechnic institutes (2011)

Source: Economic Review of Rajasthan, 2011-12

Type Numbers

IT/ITES 4

Gems and Jewellery 1

Textiles 1

Source: RIICO

Fig 18 : Notified SEZs- sector wise

State Policies and IncentivesIn order to attract investment into the various sectors of the state the Government of Rajasthan has made several policy announcements. These policies have provided a roadmap and attempt to boost the industrial climate and remove various road blocks which hampered the industrial expansion of the state. These policy documents also provide investment incentives and schemes for the investors.

Please refer to Annexure, for various policies in Rajasthan.

Single Window Clearance

The Rajasthan Enterprises Single Window Enabling and Clearance Act became effective in the State since 27.12.2010 to provide for accelerated and time-bound grant of various licences, permissions and approvals and to enable an alternative single window clearance mechanism to be triggered in case of failure of competent authorities to act in time and to support an investor friendly environment in the State.

The Rajasthan Enterprises Single Window Enabling and Clearance Rules were notified 25.01.2011 for implementing the provisions of the Act.

This Act is aimed at ensuring smooth, simplified and hassle free procedure for setting up industries and fructifying investment in the State. The Act prescribes that investments between Rs 10 million to Rs 100 million would be cleared at the district level by a committee headed by the District Collector. The nodal agency for this is the District Industries Centre (DIC).

Investments beyond Rs 100 million are cleared by a State level empowered committee headed by the Chief Secretary. The State Level Committee is also competent to recommend customized package for large investments to the Council of Ministers.

Year Numbers Filed

Proposed Investment (Rs billion)

Share of state in Northern Region proposed investments (percent)

Proposed Employment (Number)

2009 88 134.6 25.6 11,515

2010 122 296.7 40.4 35,465

2011 165 234.9 23.6 32,653

2012(May) 90 112.6 46.5 29,135

Source: SIA Statistics, Department of Industrial Policy and Promotion, Ministry of Commerce & IndustryNote: Investment in terms of Industrial Entrepreneur Memoranda (IEMs) filed, Letters of Intent (LOIs) issued and Direct Industrial Licenses (DILs) issuedNorthern Region includes the states of Delhi, Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab, Rajasthan, Uttar Pradesh, Uttarakhand and UT Chandigarh

Investments in the State The state received industrial investment proposals amounting to Rs 1,699.6 billion during the period August 1991 to May 2012. During the year 2011 the state has attracted investment intentions of Rs 234.9 billion.

The state is attracting significant investments. In the financial year 2011-12 upto December, 2011 a total of 9,195 industrial units were registered in the MSME sector. These units with a total investment of Rs 17.6 billion have generated direct employment for 74,051 persons. During the year 2011-12, upto November 2011, the state received proposals for establishment of 117 major and medium industries with an investment of Rs 132 billion.

Foreign Direct Investment

According to the Department of Industrial Policy and Promotion, FDI inflows from April 2000 to July 2012 amounted to US$ 607 million in the state. For the period April 2012 to July 2012, FDI inflows amounted to US$ 54 million19.

Figure 22 : Investment Intentions in the state

19 Department of Industrial Policy and Promotion, Ministry of Commerce & Industry

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Rajasthan is taking major initiatives towards improving the business climate and encouraging private investments in various sectors including physical and social infrastructure through Public Private Partnerships. Rajasthan Investment Promotion Scheme 2010 provides various financial incentives and subsidies. The state has introduced a statutory Single Window System and an online electronic clearance mechanism for time bound approvals for investment proposals. Special economic zone dedicated for investors from Japan has been established at Neemrana in the state, an indicator of international interest for investments in the state. The state provides excellent industrial infrastructure in the form of well developed industrial parks.

The proposed Western Dedicated Freight Corridor with about 37 percent of the corridor passing through the state will

facilitate Rajasthan easier access to seaports at Maharashtra and Gujarat. The DMIC planned along the alignment of western DFC will provide further impetus to trade and investment in the state.

The state has taken many initiatives to create favourable investment climate which includes expediting decision making at the political and bureaucratic levels, preparation of masterplans for all cities in the state to enable prompt industrial conversions20 and emphasizing responsibility sharing across all levels. Steps have been taken to simplify the tedious process of changing land use from Agricultural to Industrial. Adequate measures have been initiated to deal with the challenges related to availability of land, basic infrastructure and water supply.

The state offers ample scope for investment in sectors such as agro food

market, ceramic areas, automotive, non-water intensive industries, apparel, solar industries, etc. Sectors such as cement and tourism offer significant potential to attract additional investments. State offers tremendous scope in the field of renewable energy especially in solar energy with state government aiming to set up 10,000 – 12,000 MW of solar power plants over a decade.

LOOKING AHEAD

20 Mr.CK Mathew, Chief Secretary , Rajasthan

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Annexure : Policies

Rajasthan Industrial and Investment Promotion Policy-201021

Objective : The policy has been announced with a vision to catalyze investments, accelerate inclusive economic and create large scale employment opportunities in Rajasthan.

Key features

• Improving the business climate through policy initiatives and systemic changes• Developing high quality infrastructure• Enhancing skill levels and employability by setting up training institutes in Private Public Partnership( PPP)• Easy availability of land for projects• Focus on Micro Small and Medium (MSMEs) growth by giving high priority to cluster based development of MSMEs• Promotion of thrust areas

Rajasthan Investment Promotion Scheme (RIPS), 201022

Objective : The Scheme has been notified to promote investment in the State of Rajasthan, facilitate investment in establishment of new enterprise(s) and/or investments made by the existing enterprise(s) for modernization/expansion/diversification, help in revival of sick industrial enterprises and to further generate employment opportunities through the instrumentality of such investments.

Key features

• Subsidy: Investment Subsidy—To the extent of 30 percent of tax(es) paid by the enterprise. Employment Generation Subsidy—To the extent of 20 percent of tax(es) paid by the enterprise.• Exemption: Luxury Tax (100 percent) Electricity Duty (50 percent) Entertainment Tax (50 percent) Land Tax (50 percent) Mandi Fee (50 percent) [Above subsidies and exemptions are available for 7 years (10 years for the MSME units in the notified areas)] Stamp Duty (50 percent) on purchase or lease of land and construction/improvement on such land Conversion Charge (50 percent) payable for change of Land use.• Applicable to: (a) New Enterprise (b) Existing Enterprise making investment for modernization/ expansion/diversification (c) Sick industrial enterprise for its revival (d) Enterprise which has set up project for common social good.

Solar Policy 201123

Objective : The policy aims to establish Rajasthan as a national leader in solar energy in phased manner by creating the policy frame work for promoting use of solar energy in various applications.

Key features• Exemption from electricity duty: The energy consumed by the power producers for own use will be exempted from payment of electricity duty.• Grant of incentives available to industries: Generation of electricity from solar power plants shall be treated as eligible industry under the schemes administered by the Industries Department and incentives available to industrial units under such schemes shall be available to the solar power producers.

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21 Government of Rajasthan22 Government of Rajasthan23 http://re.indiaenvironmentportal.org.in/files/rajasthan percent20Solar percent20Policy2011.pdf

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Availability of water for power generation: Water Resource Department will allocate required quantity of water from Indira Gandhi Nahar Project (IGNP) canal or the nearest available source for development of solar thermal plants subject to the availability of water for power generation• Power producer will intimate estimated water requirement to Rajasthan Renewable Energy Corporation (RREC) along with source of water. After assessment/scrutiny, case of water requirement shall be forwarded to the Water Resource Department. The modification(s) required, if any, in the existing canal system shall be done by the Water Resource Department at the cost of the power producer• Allotment of government land at 10 percent DLC Rate (Agriculture)• Conversion of agricultural land to industrial use at 10 percent rate• Exemption of ceiling limit for the installation of solar power plants in excess of ceiling limit prescribed in the Ceiling Act 1973

Promotion of Agro-Processing and Agri-Business 201024

Objective: The policy for the promotion of agro processing industries and agri-business seeks to address the entire value chain in agro processing and marketing, including development of the supply chain, market development and diversification.

Other objectives • To increase the income in the hands of the farmers through more remunerative prices of their produce• To encourage value addition in agricultural produce and to reduce post harvest losses• To bring in new technologies and practices to modernize agro-processing and marketing• To promote export of agri-products of the state and to build a strong state brand in the domestic and international market• To attract private investment in agro processing and create new employment opportunities on a large scale

Key features

• Incentives admissible under RIPS 2010• Additional incentives/concessions under this policy• Incentives/assistance admissible under ongoing or specific schemes/ programs

Rajasthan Micro, Small and Medium Enterprises (MSMEs) Development Assistance Scheme, 2008 25

Objective: With a view to strengthening the institutional support framework, improving quality of MSMEs’ products through Research & Development (R&D) and compatibility with the environmental benchmarks, the scheme was introduced under Incentive Package for MSMEs 2008.

Key featuresConcessions:• 50 percent of the capital cost for establishment of Common Effluent Treatment Plant/Facilities (CETF/Facilities) by industries association of MSMEs in industrial areas/clusters in the state• 50 percent of the capital cost incurred by MSMEs for establishment of individual Effluent Treatment Plant/Facility. This benefit would be available only if the enterprises’ establish the Effluent Treatment Plant/Facilities, using 80 percent of the recycled water.• Part of the capital cost as decided by the competent committee under clause 6(I) for setting up a regional office or the branch of national laboratories in the state• Part of the capital cost as decided by the appropriate committee mentioned under clause 6 for the establishment of Research, Development and Testing laboratories set up by MSMEs Association. Maximum limit of part of the capital cost to be provided under the scheme by the state government would be Rs 20 millions. This benefit would be available only to such laboratories which obtain accreditation from national level accreditation board/authority• 50 percent of the capital cost for setting up of training institute in the state by national/state level institutions for ensuring availability of skilled manpower in the state

Exemptions:

75 percent exemption from electricity duty to the MSMEs located in rural areas.

24 http://rajind.rajasthan.gov.in/Msme.pdf 25 http://rajasthan.gov.in/rajgovresources/actnpolicies/it_policy.pdf

IT & ITES Policy 200726

Objective: : An investor friendly IT Policy has been implemented in the state which provided lucrative incentives to IT industries. It is targeted for the IT and IT enabled service industries which aspire to invent in the state.

Key features

Concessions available for IT Companies.• Land rebate up to 60 percent, depending upon the type & size of investment in RIICO IT Parks• Exemption of stamp duty on registration of land• 50 percent exemption from electricity duty for 7 years• Simplified Labour Laws. (Women are allowed to work in night shift, self certification under various state enactments, etc.)• Customized package for investment beyond Rs 500 million.• Venture capital support

Tourism Units Policy 200727

Objective: This policy enhances the scope of the Hotel Policy, 2006, by including all other categories of hotels (heritage hotels and other

Key features• There will be no conversion charges for conversion of agriculture land in urban areas and coversion of agriculture land for non agriculture purpose in rural areas under tourism unit policy 2007• Maximum land are for allotment of land in urban areas has been increased and special reserve prince has been kept from 10 percent to 50 percent of the commercial reserve prince of the are and in rural area on DLC rate of the local area for various Tourism Units under Tourism Unit Policy 2007• Regularisation of residential land & building which were running as hotels or other tourism units without permission and are also operational the same shall be regularised on marit basis on payment of 25 percent of regularisatin fee scheme under Rajasthan Municipality Rule 2000 under Tourism Unit Policy 2007• F.A.R. for hotels already established will be increased from 1.75 to 2.0 to allow construction of additional floor under Tourism Unit Policy 2007• For new hotel project under Hotel Policy 2006 Floor Area Ratio (F.A.R.) has been increased upto twice within scheme are subject to the condition that overall F.A.R. of the scheme are shall not exceed 1 (one)• Heritage property which is converted into Heritage Hotel having minimum of 10 rooms has been exempted 100 percent from conversion charges• 75 percent concession in stamp duty on conversion of old heritage properties (more then 100 years) into hotels• 50 percent Remission in luxury tax during the off season i.e. April to July

Other Policies/Packages/Schemes/Incentives28

Various other Policies for promoting investments in the state include:

• Policy for Promotion of Private Sector Investment for setting up of power generation projects in the state of Rajasthan, 2005 • Rajasthan Special Economic Zone Policy, 2003 • Special Incentive Package for Ceramic and Glass Sector, 2011• Rajasthan Mineral Policy, 2011• Rajasthan Ecotourism Policy• Policy to Promote Private Investment in Healthcare Facilities (Amendment), 2011• State Livestock Development Policy• Incentive Package for Powerloom sector in Jodhpur, Pali and Barmer• Rajasthan Incentive Scheme for BPO Centre and KPO centre, 2011• Integrated Township Policy 2007• Policy for promoting generation of electricity from Wind 2012• Policy for promoting generation of electricity from Biomass

26 Government of Rajasthan27 Government of Rajasthan28 Government of Rajasthan

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