What's next for the Rajasthan Model?

Vasundhara Raje will likely focus on easing rules for doing business in the state to boost investor confidence

After initiating land and labour reforms, what might be the next steps that the Rajasthan government will take to create an investor-friendly ecosystem? A closer look at the areas in which the government has initiated reforms reveals a definitive pattern. It is what economists have been proposing for years – next-generation reforms to tackle the factor markets: land, labour, capital and enterprise. An educated guess would be that the next set of reforms will focus on tackling the ease of doing business. 

It might be instructive to read Rajiv Kumar’s new book, Exploding Aspirations. Kumar, currently a Senior Fellow at the Delhi-based think-tank Centre for Policy Research, is also on the Advisory Council of the Rajasthan government. It is likely that the measures proposed in his book, released by Finance Minister Arun Jaitley, may be implemented in the coming months. 

 

Among the steps listed in the book which are seen as critical to building investor confidence are: 

 

1. A combined application form for obtaining all required licenses and clearances

 

2. Reduce the time taken for starting and exiting a business

 

3. Shifting to a system of self certification – a step which has already been announced by the central government

 

For a state which has long suffered the ignominy of being classified as a BIMARU state – an acronym for Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh but also as much a euphemism for lacklustre performance on various socio-economic indicators – this change in the narrative to reposition Rajasthan is indeed quite interesting.

Although Vasundhara Raje has 163 seats out of a total 200 in the assembly, these measures, says Kumar, can be implemented by executive action. Ironically, these are the very issues that many had hoped the new central government would tackle. 

(Ishan Bakshi covers national economy and policy issues)