Industrial Scenario of Rajasthan

India's largest state (area-wise) has some unique advantages in terms of mineral wealth, forest reserves and human resources which will help it to become one of the industrial hubs of the country.

Rajasthan accounts for 17.5% of the total cement grade limestone reserves in Indiaand is the largest cement producer with 21 major cement plants. The northwestern state is the sole producer of lead concentrate, zinc concentrate, gypsum, calcite, selenite and wollastonite as well as the leading producer of silver, gold, copper, marble, sandstone, rock phosphate and lignite.

The gross state domestic product (GSDP) expanded at a CAGR of 12.83% from 2004-05 to2014-15. For 2014-15 fiscal, the GSDP stood at $95.31 billion at current prices as against $28.5 billion in 2004-05. In 2014-15, Rajasthan’s per capita GSDP at current prices was $1,351.03 compared to $469.8 in 2004-05.

The per capita GSDP is estimated to have increased at a CAGR of 11.4% between 2004-05 and 2014-15. The state has immense potential for electricity generation through renewable energysources and wind power. Rajasthan Renewable Energy Corporation Ltd has actively promoted solar energy and biomass projects. Under the PPP model, a total of 132 projects were in different development stages as of March 2015.

Moreover, RIICO developed 323 industrial areas including SEZs, export promotion industrial parks and inland container depots. In 2014-15, tourist arrivals in the state reached 34.59 million. Historic palaces, especially those in Jaipur and Udaipur, offer opportunities to expand the luxury tourism segment. Moreover, tourists visit wild life sanctuaries and desert locations.

Rajasthan is the largest producer of oilseeds, seed spices and coarse cereals in India. Tremendous opportunities exist in the areas of organic and contract farming as well as in infrastructure growth related to agriculture.

Rajasthan has reserves of numerous precious and semi-precious stones and is the largestmanufacturer of cut and polished diamonds in the country. The world's largest centre for gemstone cutting and polishing is located in Jaipur.

The state has a considerable pool of skilled and technically qualified human resourceswith more than 2 lakh students enrolled in technical institutions. In line with this, a number of IT parks with special infrastructure are being developed.

The policy environment has been favourable for the establishment of industrial units. A single window clearance system (SWCS) for investment approvals is operational in thestate and the Bureau of Investment Promotion (BIP) was set up to focus on investmentsabove $2.2 million.

Six cities namely, Ajmer, Bharatpur, Bikaner, Jaipur, Jodhpur and Kota are selected to be developed as smart cities of the state.

Economic composition

In 2014-15, the services sector contributed 44.28% to the state’s GSDP at current prices, followed by agriculture (32.65%) and industries (23.08%). The services sector expanded at a CAGR of 11.7% between 2004-05 and 2014-15.

At a CAGR of 13.4%, the agriculture sector reported the fastest growth among the three sectors over 2004-05 to 2014-15. In 2014-15, total production of food grains was 20.1 million tonnes.

In 2014-15, production of cereals was 19.4 million tonnes, while that of pulses aggregated to 2.1 million tonnes. Cotton, which is an important cash crop, is primarily grown in Ganganagar and Hanumangarh districts. Cotton production was 0.8 million bales over 2013-14.

In 2014-15, total production of oilseeds was 6.1 million tonnes. According to the Department of Industrial Policy and Promotion (DIPP), the FDI inflows stood at $1,264 million from April 2000 to March 2015.

The electricity and manufacturing sector accounted for majority of investments made in the state.

2015-16 Budget initiatives

  • Resurgent Rajasthan Summit will showcase the investment potential of the state to attract global firms and investors.
  • Mega land bank planned for industries.
  • Offices of district industries centres and Commissioner Industries will be computerised.
  • For Honda Corporation vendors, 25 acres of land will be allotted at Karauli Industrial area in Alwar.
  • 50 acres of land will be allotted for electronics manufacturing cluster in Salarpur- Bhiwadi industrial area.
  • 127 acre ESDM (electronic system and design manufacturing) zone in Kaladwas extension will be constructed.
  • The natural resources, policy incentives, strategic location and infrastructure in the state are favourably suited for investments in sectors such as cement, IT and ITeS, ceramics, tourism, automotive and agro-based industries.
  • Bureau of Investment Promotion (BIP) and Rajasthan Industrial Development and Investment Corporation (RIICO) are responsible for promoting investments and developing industries in the state.
  • The state government is promoting several SEZs across the sectors such as gems and jewellery, handicrafts, IT, electronics, automotive/auto components and textiles.
  • Rajasthan is endowed with two critical resources that are essential for solar power production: high level of solar radiation per square inch and large amounts of contiguous, relatively flat and undeveloped land.

Tops in cement production

Rajasthan has huge reserves of cement-grade and steel melting-shop (SMS) grade limestone. SMS-grade limestone from Jaisalmer is supplied to various steel plants in thecountry. The state has 21 major cement plants, having a total capacity of 55 million tonnes per annum (MTPA).

It is the largest cement-producing state in India. The state has about 17% share in cement grade limestone reserves of India. Rajasthan is host to all major cement producers in the country, with significant presence across the state. Some of the top firms are ACC Ltd, Ambuja Cement, Shree Cement and GrasimIndustries Ltd.

Given the availability of huge cement grade limestone reserves, more than 10 cement plants would be installed in the state in the near future, particularly in Chittorgarh, Jaipur, Jhunjhunu, Nagaur and Pali.

Mining and mineral processing

Around 79 varieties of minerals are available in the state and 57 minerals are produced on a commercial scale. In 2014-15 Rajasthan accounted for 9% share of the total mineral production in the country. It is home to the second highest number of mines in the country (557 mines).

The state is a leading producer of major minerals such as wollastonite, lead-zinc, calcite, gypsum, rock phosphate, ochre and silver. Minor minerals such as marble, sandstone and serpentine (green marble), among others, from the state contribute almost 90-100% to national production.

In 2014, the mineral production in Rajasthan was 5,694 lakh tonnes. The state has about 210 million tonnes of identified reserves of lead-zinc ore with 1.5% lead and zinc, and 639 million tonnes of copper ore reserves containing 0.8-1.2% copper.

Rajasthan is the sole producer of lead concentrate, zinc concentrate, gypsum, calcite, selenite and wollastonite. The state accounts for 31.8% of the country’s copper concentrate production.

Rajasthan accounts for 23.92 million tonnes resources of tungsten ore which contributes nearly 17% of India’s resources. In 2015, the state’s copper ore resources accounted for 49.86% of the country’s resources. In terms of copper production, Rajasthan produces nearly 32% of the total ouput of this metal in India.

The state accounts for 82% in gypsum resources in the country. It's share in the total gypsum output of the country was 99% in 2014-15. Rajasthan has about 5,720 million tonnes of lignite reserves in the districts of Barmer, Bikaner, Nagaur, Jaisalmer and Jalore.

Lignite is being produced in Barmer and Matasukh area of Nagaur. Some lignite blocks in the districts of Barmer, Bikaner and Nagaur have been allotted for setting up thermal power plants.

The availability of clay and feldspar makes the state an excellent location for ceramic-related industries (e.g., white-ware, floorings and bone-china). Around 500 ceramic industries including glass and mineral grinding units operate in the state.

Auto and auto-components

  • The Alwar and Jaipur districts are close to major auto production hubs of the country such as Noida (UP), Gurgaon and Dharuhera (Haryana).
  • Rajasthan offers excellent advantages for setting up of auto and autoancillary units.
  • Over 100 units are currently functional in Bhiwadi, Neemrana and Pathredi in Alwar district -- these are the 3 main auto clusters in Rajasthan.
  • Special auto and engineering zones have been developed in Pathredi Industrial Area and Bhiwadi.
  • Rajasthan has become a prominent base for auto manufacturing with the setting up of an auto cluster in Alwar district and Honda's facility in Bhiwadi.
  • Honda Motorcycle and Scooter India has opened its second two-wheeler plant in Rajasthan with an annual production capacity of 6 lakh units.
  • Honda Siel Cars India’s (HSCI) car assembly and diesel engine component production line at its Tapukara facility with an investment of $460.3 million became operationalin February 2014.
  • Neemrana–Japanese zone: A 1,167-acre industrial area in Neemrana has been developed especially for industrial units from Japan. Automotive units of Nissin Brakes, TPR Auto parts, Takata India, Nippon Steel, Toyota Gosei,Mikuni India and Toyota Kirloskar Motor are present in this zone.
  • Hero Motor Corporation is setting up its fourth manufacturing plant and a global parts centre at Neemrana in Rajasthan.
  • Bosch Limited plans to increase the capacity of its plant at Jaipur to 5.5 lakh pumps annually.

Textiles in Rajasthan

  • Rajasthan has a leading position in the production of polyester viscose yarn, synthetic suiting material as well as processing of low-cost, low-weight fabric (at Pali, Balotra, Sanganer and Bagru).
  • Jaipur is a well-known centre for manufacturing garments, primarily for exports.
  • Bhilwara has emerged as India's largest manufacturer of suiting fabrics and yarn.
  • Around 16 ATDC (Apparel Training and Design Centre) smart centres have been opened in Rajasthan to train people.
  • Availability of raw material and trained labour has promoted the growth of the textile industry with many units being set up across the state.
  • Nine integrated textile parks have been sanctioned in the state at an approved investment of $276 million.
  • With a network of backward and forward linkages, Rajasthan’s textile industry offers significant competitive advantages.

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