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‘Oil Finds Will Push Growth’

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Till recently, lack of an investor-friendly climate in Rajasthan kept big companies away from the state. The government has now made a conscious effort not only to formulate investor friendly policies, but also set up a transparent mechanism to monitor its implementation. Chief Minister of Rajasthan Ashok Gehlot, backed by the state budget in 2010 packed with such initiatives, is confident of delivering more than what other states promise. The former Union civil aviation minister is now piloting the state's flight to a new destination. In an interview with BW's M Rajendran, he details the challenges and targets for Rajasthan and the realistic achievements for the future. He is betting on the single window clearance, that is an Act now, rather than just a policy announcement, to attract big ticket investments into the state.

What makes Rajasthan an attractive state for investment, both domestic and foreign?
Our policies have been investor friendly. But we were not aggressive in marketing our policies; that would have helped boost investor confidence. This has now been given top priority. Rajasthan's proximity to National Capital Region, road infrastructure, power and water availability, fast growing educational infrastructure, employable manpower and concrete policy initiative are key to our state being an attractive investment destination.

What are the challenges for the state to help create a more conducive business environment?
We are silent workers, but our antenna is fine tuned to the requirements of those who wish to invest in the state. Earlier, there was not sufficient effort by those who ruled Rajasthan to attract investments. So when you start with such a background, the biggest challenge is to change the mindset - of the people, officers and those who wish to invest. Once we achieve it, the business environment will also change. We have taken a few steps, in every sector, and that has resulted in many big business houses in various sectors starting business in the state; the challenge is to keep that confidence going now. Our policies are tuned to achieve that objective.

Which are the cities that have better infrastructure in the state?
Jaipur, Jodhpur, Udaipur, Kota, Bhiwadi, Neemrana, Bhilwara are some cities where the investments tend to flow as these cities support a comparatively better social and industrial infrastructure.

What are the sectors that are attracting most investment and why?
The state is attracting private sector investment now, both in established sectors such as tourism, ceramic, glass and automotive, as well as emerging sectors such as IT/ITES, solar, education, health and agriculture. We have confirmed investment of Rs 3 lakh crore from various sectors. More efforts are being made to attract investment and investors in different sectors. It is 'Rajasthan Calling'.

Can you elaborate on the reforms that have made the state more attractive and new reforms that are planned in the next few years?
The Rajasthan Investment Promotion Scheme offers a holistic initiative for the state's overall economic development. Our statutory electronic single window systems with fixed timelines and direct monitoring by an empowered committee have been well received. The reforms are not just to attract investment, but also to ensure that the poor and underprivileged in the state get the benefits of these policies, in terms of employment, health and education. This has resulted in better economic well-being of people in the state and them ultimately contributing to the state's well being.

But your state has a low per capita income at $497. It should be a cause of worry. How do you plan to improve it?
Yes, if you compare it to other states, our per capita income may seem to be low. But unlike other states, this per capita income level is due to natural factors. Since 66 per cent of people in the state are dependent on agriculture and that, too, single crop, availability of water for irrigation is difficult. However, we understand the need to increase the per capita income and will improve it through multi-pronged efforts -- promoting agriculture, solar energy and policy changes.

How innovative is the state in developing policies and programmes to make it business friendly?
We are focused on developing policies that are in tune with the future requirements of the state and nation. Land is a controversial issue, but not for us with huge tracts of desert. Rajasthan gets huge amounts of quality solar power but it needs land to set up solar farms. So we are transforming our liability into profit. Oil exploration and refining will be the next big industry in the state. The Cairn fields have given us an opportunity, ONGC has promised to work on new fields. Oil and gas exploration will transform the face of this state.

We will host the Pravasi Bharatiya Sammelan 2012 in Jaipur from 7 to 9 January. It is a huge event for us to showcase our policies and initiatives, and we will play a very good host as is our tradition. As mentioned earlier, the single window clearance for setting up business, superimposed with an Act, is a major initiative that business community not only in India but abroad will find will meet global standards. The state has rich mineral deposits such as lignite. It offers a huge opportunity for employment generation, when investments flow in to developing the mines.

Education is a major sector where the states are competing with each other to attract investments. What is Rajasthan offering?
We are aware of the growth in this sector. Already Indian Institute of Technology at Jodhpur and Indian Institute of Management at Udaipur are big projects. A Footwear Design and Development Institute at Jodhpur is coming up soon while National Institute of Fashion Technology is already functioning since last year. The All India Institute of Medical Sciences is also planned at Jodhpur. Lakshmi Mittal (of ArcelorMittal) is also setting up an IIIT in the state. A number of other well-recognised private and public educational institutes are in discussions to either expand their existing infrastructure and courses or to set up greenfield projects. That is an encouraging sign.
Health sector is another challenge for Rajasthan. What response has the state received from private companies in this segment?
Bengaluru-based Narayana Hrudayalaya will set up a hospital in Jaipur, making it a true health city. Fortis has already set up a hospital in the state, Bombay Hospital is in the process of setting up a 600-bed super-specialty hospital in Jaipur; and Max has also shown keen interest and is in talks with our officers. My government has been providing major thrust and initiative to Central and state government health schemes; private sector will only boost those efforts.

So the state is in a path of progress and needs acceleration…
There would be challenges, but my government has provided the best governance, the performance is evaluated by people, and you (media) keep a watch on us. I will not comment about other states or their governance, but the progress made by Rajasthan and its future growth is not just an announcement, but a fact for all to see.

(This story was published in Businessworld Issue Dated 09-05-2011)