Business in Rajasthan

Can I start business in Rajasthan

The Rajasthan government is taking steps to eliminate the bottlenecks, enhance ease of doing business and create a land bank to facilitate investors looking to set up ventures. At the same time, the officials have denied the local industry's complain that the state has adopted a step-motherly attitude towards them while going out in a big way to attract large investments.

In order to allay the fears of MSME sector, the government has assured them the business community is the backbone of the state. Potential is already there as the state has large tracts of land and a rich base for a lot of minerals. The Delhi-Mumbai Industrial Corridor (DMIC) for which the land acquisition process is complete will be a game changer for the state.

The proximity to NCR (National Capital Region) has lot of advantages. Moreover, the government is intent on eliminating roadblocks that have hampered investments in the past. The political leadership is keen to ensure that the potential gets translated into real investments. Going by the number of MoUs and the engagements with the investors, the government is confident that 'Resurgent Rajasthan', a global investors summit, will be a grand success.

The Centre had circulated a set of 285 questions to all the states aimed at ranking them on ease of doing business. Rajasthan has complied with 236 of them, while 38 of the questions are not applicable to the state. The state machinery has put in place a system for online approvals and certifications that would address the entire process from making an application for starting a new company to filing of returns.

This online process of approvals will bring in transparency, fast-track decision making and end inspector raj. While the state is going in a big way to attract investments from outside, the local industry feels betrayed. They allege land is being not allotted for their projects.

Even allotted land is being cancelled. They complain the top officials in RIICO don't give them even an appointment to hear their problems. But the government has clarified that if the local industry has grievances, they can seek immediate redress from the concerned officials or agencies. Everything is being done to promote local industry and business interests too in Rajasthan so that they enjoy the utmost level of comfort and expand their enterprises.

MSMEs constitute 90% of the industry in the state and the latter is doing everything to make their operations in Rajasthan a hassle-free experience.

Single Window Approval mechanism

Single Window Clearance System (SWCS) is a single point of contact to reduce the time and efforts involved in various clearances and approvals for the proposed investment submitted by investors.

This online application shall render transparency to the system, thereby facilitating investors with expeditious and time-bound clearances and approvals. SWCS has come into effect from 1 April 2011 in all the districts of the state. Application through SWCS is mandatory for all projects involving investments above $165,893.

The system will grant permissions, invoking and using clearance mechanism, in case of failure of the original competent authorities to decide on application within the specified time. It will serve as a single point interface between investors and various government departments.

SWCS will provide an electronic-based transparent system for online tracking of application/forms. Moreover, the investors will be updated on information relating to relevant rules, regulations, orders, policy initiatives and schemes for guidance.

With the introduction of the Single Window Clearance portal, setting up new projects and investment proposals in the state is expected to become a speedy, uninterrupted and hassle-free process.

Investor also has the right to appeal against the decision of rejection by the department before the state empowered committee.

Key investment promotion offices

Bureau of Investment Promotion (BIP): This is a nodal agency of the state government that facilitates investments in various sectors in Rajasthan. It provides one stop service, mainly for large projects, by acting as an interface between entrepreneurs and the government.

Rajasthan State Industrial Development and Investment Corporation (RIICO): A sole agency in the state that develops land for industrial growth. RIICO provides financial assistance and other vital infrastructural facilities for industries.

Rajasthan Financial Corporation (RFC): This provides medium and long-term loans for new industrial units in the SME sector. It also assists in planning a balanced development of industries in the state.

PDCOR Limited: A company jointly promoted by the state government and Infrastructure Leasing and Financial Services Limited (IL&FS) to facilitate private sector investment in the infrastructure sector of Rajasthan.

Cost of doing business in Rajasthan

  • Industrial land: $70-$130 per sq.ft (industry sources)
  • Labour cost (minimum wages per day) $3-$5.5 (Union ministry of labour and employment)
  • Hotel costs (5-star) $95-$385 per room per night (Top hotels in Rajasthan)
  • Office space rental: $0.22-$2.5 per sq. ft per month (industry sources)
  • Residential space rental: $0.05-$0.28 per sq. ft per month (rates depend on the type of structure and location)
  • Power cost (per kWh): Domestic: 7.9 cents, Commercial: 11.3 cents, Industrial: 9.7 cents, Agriculture: 2.5 cents; (DCH Databook, October 2013)