Rajasthan

New investment destination
ECONOMY
Financial discipline, social thrust a unique development paradigm
By Shankar Agarwal

THE BJP came to power with a thumping majority in . The reasons were obvious?during the previous Congress regime, there was hardly any money left to be paid as salaries or as bonus to the State government employees. For the first time since Independence the previous government had decided not to pay bonus, medical reimbursements, etc. So much so, that the State government employees faced a dismal scenario mainly because of the mismanaged fiscal policies of the then Congress government.

is being ranked third in financial management. It was due to this reason that the State government got additional grant as an incentive. Fiscal deficit has now been reduced remarkably. It was 30 per cent of the revenue gains in 2002-03 but during 2003-04 it came down to 22 per cent.

But as soon as the BJP came to power, the economic scenario started changing for the better. It is solely due to the able guidance and firm determination of the present Chief Minister of the State, Smt. Vasundhara Raje, that there is prosperity and happiness among the State government employees and a sense of confidence is appearing among the common man as far as the policies and decisions of the State government are concerned. Today, the employees are being paid incentives, bonus, etc., the size of annual projects have also increased and new dimensions of development are coming to the forefront. The policy of the State government has attracted NRIs, particularly NRI is, to make heavy investments in the State. Let us analyse the various stages of this development:

A CII initiative for education in the State

Various facilities to employees

The normal facilities that had been provided to the employees were withdrawn by the previous Congress government due to financial constraints. But the BJP Government, as its first priority, took initiatives to meet the demands of the employees, which are: Bonus was given to the employees and in 2003-04 orders were issued to release bonus or ex-gratia to employees. Fifty per cent of the dearness allowance (DA) was added to the basic salary, as a result, the facilities provided to the employees increased correspondingly. The ceiling of loans for festivals, grains, education of childrens, etc. was raised from Rs 1,800 to Rs. 8,000.

Tie-and-dye is done using a process in which threads tie off areas that are not to be dyed, creating patterns with such points that, when opened can form an intricate jaal

New contributory pension scheme was floated by the State. Easy home loans were provided to the employees by the banks at the initiative of the State government. Retirement age was increased from 58 years to 60 years. Thousands of youth were given opportunity to make a bright future when the ban imposed by the earlier government on new appointments in various departments was lifted.

Size of annual scheme was increased

During the previous regime, the size of annual schemes kept on decreasing. But the Vasundhara government increased the expenditure on development and increased the expenditure on annual schemes from Rs 4,258 crore to Rs 5,500 crore for the year 2003-04. Thus the actual investment went up to Rs 6,044 crore. Similarly, the State government has planned development works to the tune of Rs 5,707 crore for 2004-05 and Rs 8,350 crore for 2005-06.

The strong financial management has opened the way for speedy development. In the first three months of the present financial year there has been an increase of 23.62 per cent in revenue collection and 17.08 per cent increase in non-revenue gains.

No overdraft for a single day

Fiscal deficit has been contained due to the State government'spolicies. There could hardly be a much bigger proof than the fact that the State government has not taken overdraft since February 10, 2004. If one looks into the past, one would find that 1986-87, 1993-94 and 2004-05 were the only years when the State government had not taken any overdraft during the whole year. But the previous Congress government had taken overdrafts for 704 days during a period from 1998 to December 4, 2003.

Creating Infrastructure

Increase in revenue

Strong financial management has opened the way for speedy development. In the first three months of the present financial year there has been an increase of 23.62 per cent in revenue collection and 17.08 per cent increase in non-revenue gains. All the departments are earning profits as per expectations or rather much more. The policy to promote tourism has yielded the desired results and the revenue gain has correspondingly increased to 27.42 per cent from this sector alone.

Heavy reduction in taxes

It is one of the major factors in the success of the present government. The State government is of the view that reduction in taxes promotes tax collection and discourages tax-evading tendency. Thus, a huge benefit has been extended to the public. The last two budgets of the State are a proof of it wherein no new tax has been imposed and relaxations continued. Some of the highlights are: Professional tax was abolished; Turn-over tax was also abolished; Surcharge on sales tax was abolished; Entertainment tax was reduced from 70 to 50 per cent; Luxury tax was reduced from 10 to 8 per cent; The Purchase tax imposed on the purchase of machines and plots was also abolished so as to promote installation of new industries; Stamp fee on the transaction of property and transfer of property in the name of females was reduced by 50 per cent; and Large and small scale industries were given concessions in electricity charges.

Computation of State loan on low interest rates

The loan extended by the Central government to the State government was so far being recovered at a rate of 12.5 to 17 per cent. Although, the computation could have been at a lower rate, the previous State government never tried to take any initiative in this regard. But the present BJP government took benefit of the ?read swap? scheme of the Centre and the interest over a loan of Rs 8,553.07 crore is now being computed at the rate of 7 to 9 per cent. This has reduced the financial burden of the State.

The State government is of the view that reduction in taxes promotes tax collection and discourages tax-evading tendency. Thus, a huge benefit has been extended to the public.

Foreign tourists enjoying kite flying

Third position in better financial management

Today it is a matter of sheer honour that is being ranked third in good financial management. It was due to this reason that the State government got additional grant as an incentive. Fiscal deficit has now been reduced remarkably. It was 30 per cent of the revenue gains in 2002-03 but during 2003-04 it came down to 22 per cent. Owing to these efforts the State got Rs 59.77 crore as fiscal reforms facility from the Centre. Again in 2004-05, the fiscal deficit was restricted to 15 per cent and once again the State got Rs 60.61 crore as fiscal reforms facility from the Centre. It is expected that the fiscal deficit will be reduced to 7.5 per cent during 2005-06. In this way the State is trying to increase the size of annual schemes as well as stressing upon the quality of work. In 2002-03 the capital outlay was Rs 2,570 crore, it is expected to be Rs 5,161 crore in 2005-06. Similarly, the assets of the State have also increased and as per expectations, during 2005-06, a major part of the annual budget would be utilised for developing 65 per cent assets.

Conclusively, it is due to the good fiscal management that several NRI is are showing an interest in making investments in the State. The work on the oil refinery is in progress. A number of IT companies are making huge investments in the State. The work on knowledge corridor and IT city is also in progress. Keeping in view the all-round development of and strong determination of CM Vasundhara Raje, it could be said that in the coming five years these positive policies will have a deep impact on the progress of the State and will soon become one of the leading states of the country.