CII Sounds Alarm on Rajasthan's Investment Climate
The Confederation of Indian Industry (CII) has raised serious concerns about Rajasthan's business environment. During a crucial pre-Budget meeting with Chief Minister Bhajan Lal Sharma and senior state officials, CII representatives highlighted persistent policy and implementation issues. They warned that these problems could severely undermine the state's investment potential if not resolved quickly.
Ambitious Economic Target at Risk
Rajasthan has set an ambitious goal to become a $350 billion economy by 2030. CII emphasized that achieving this target depends entirely on improving the ease of doing business and implementing meaningful policy reforms. The current hurdles are making this objective increasingly difficult to reach.
Restrictive Investment Scheme Excludes MSMEs
A major point of contention is the Rajasthan Investment Promotion Scheme (RIPS) 2024. The scheme includes a restrictive transition clause that requires enterprises to invest over Rs 100 crore and employ at least 200 workers to qualify for benefits. This condition effectively excludes most Micro, Small, and Medium Enterprises (MSMEs). Many of these smaller businesses are still recovering from pandemic-related challenges and cannot meet these high thresholds.
Weak Enforcement of Local Procurement Policy
CII's memorandum also criticized the weak enforcement of Rajasthan's public procurement policy. This policy mandates that 25% of government purchases should come from local manufacturers. However, industry members report that various departments routinely bypass this rule. This inconsistent application erodes business confidence in the state's investment climate.
Bureaucratic Hurdles and Licensing Maze
The ease of doing business remains a significant stumbling block in Rajasthan. CII pointed out several specific problems:
- Starting an industry requires nearly 140 different licences
- Hotels need over 40 licences to operate
- Frequent licence renewals create additional burdens
- Delays in disbursing incentives announced by RIICO
- Double taxation issues for IT firms in Udaipur
- Slow approvals for fire safety, environmental clearances, and groundwater use
These bureaucratic obstacles actively discourage new ventures from establishing themselves in the state.
Credit Crunch for Small Businesses
The memorandum highlighted another critical issue affecting MSMEs. Banks are not honouring collateral-free loans promised under central government directives. This leaves small enterprises starved of essential credit, hampering their growth and recovery.
Pending Cases Block New Investments
Numerous RIPS cases remain stuck at district industry centres, creating a backlog that blocks new investments. Industries also complain about years-long delays in receiving approved subsidies, further frustrating business operations.
CII's comprehensive assessment presents a clear picture: Rajasthan must address these policy and implementation challenges urgently. The state's economic ambitions depend on creating a more supportive environment for businesses of all sizes, particularly the vital MSME sector that forms the backbone of Rajasthan's economy.
