A sign of relative economic underdevelopment in a state is that its politics dominates its economics and not the other way around.
Rajasthan is currently in a frenzied swirl thanks to manoeuvres of power politics.
It seems to be all about the ‘ease of forming government’ rather than the ‘ease of doing business’!
Irrespective of how the politics shapes up, the economic heartbeat does not and must not stop. Rajasthan is the land which has given in this country exceptional leadership in the area of enterprise, entrepreneurship and business leadership. In every corner of our vast country, the mark of Rajasthan’s entrepreneurs can be seen. Unfortunately, the homeland has not reaped a rich harvest.
In Rajasthan, economics has taken a backseat. It can get even more dismal. One glance at the ‘post-Covid’ world scenario can tell us that .Travel and tourism at a standstill. New economic activity devastated. Large capital infusions improbable. Profitability badly squeezed. Tax revenues much poorer. One can visualise how difficult things may become for Rajasthan. We need a political leadership obsessed with growth and economic expansion.
Economic growth is a matter of objective realism. Going beyond individual competence and charisma, it is about a relay race where separate institutions and individuals run for the same team.
I am a corporate professional, marketing expert and have handled business operations across diverse industries. I look at ‘Brand Rajasthan’ from an investor’s eyes and ask what is the state of affairs?
How should we judge the economic performance of a Chief Minister? The easiest way would be to rank performance according to aggregated statistics during a CM’s administration, such as the growth of real GDP, revenues and employment. Have major corporations set up operations in the state and has domain concentration grown?
However, given that some Chief Ministers may face a larger economic crisis as against others who may govern in more favourable times it is important to also take note of the national conditions with reference to inflation, financial health and overall investment climate.
The fruits of economic liberalisation in India ever since 1991 have gone in disproportionate measure to states such as Maharashtra , Andhra Pradesh, Tamil Nadu and Karnataka.
Why did Bangalore, Chennai and Hyderabad become hubs for Indian IT? Why not Jaipur? Why is there not a booming culture industry -media, art and leisure pursuits- in the state? Why are Goa and Kerala gaining and edge in holistic tourism? Why does Haryana have such a large manufacturing base compared to us?
It needs a will and ability to lead reform, drive catalysis through institutions, laws and regulations. Politicians are not trained economists or business professionals. Therefore, observe how the Chief Minister is going about making economic decisions. Who are the advisors? Who are the people chosen to head vital institutions and departments? Are they empowered to make decisions that have a bearing on economic growth?
Successful Chief Ministers employ macroeconomic tools such as tax policy, labour policy and dip into fiscal and monetary broad stream to avoid crunches, foster real GDP growth and maintain economic stability.
Secondly, we should consider whether the leadership improves the economic infrastructure of the state? Are they looking at good social policy as a precursor to good economic policy? Are they aware of the cost structures of doing business in the state?Dothey notice the conditions that impact productivity and strengthen competitiveness of businesses based in Rajasthan? Short term policy making can end up imposing excessive costs, reducing productivity, weakening of the state’s competitiveness and the decelerating long-term growth of real GDP for the state.
What any CM must provide is political will and a social contract. Rajasthan ought to be known as a state that is active in those sectors where there is great growth, vibrancy and energy. Automotive, Telecom, Information Technology, Commercial Agriculture, Financial Services – these are boosters for job creation.
When a chief minister reforms the economic infrastructure, it leads to economic freedom and fairness, revives confidence and provides support to those who seek growth. It is also crucial that poor, depressed classes in Rajasthan , particularly those who may have suffered from past discrimination, are participating fully, freely and energetically in the economy and enjoying the fruits of their labour.
Of course Rajasthan’s backwardness has structural reasons but we must also reflect on whether political leadership in Rajasthan has done enough? Is our political leadership genuinely interested in business and economics?
When these questions become part of public thought, Rajasthan will advance.