Overview

This working paper examines how strategically directed industrial investments can drive Rajasthan toward its $350 billion economy target by 2030. With Own Tax Revenue (OTR) contributing about 82% of state revenue and closely tied to industrial output, the paper evaluates two growth scenarios, benchmarks high-performing traditional sectors, and assesses emerging industries enabled by RIPS 2024 and allied policies.

Key Highlights

• Industrial growth directly lifts state revenue, primarily through higher economic activity and consumption rather than tax structure shifts.
• The $350 bn target needs about 1 percentage point higher annual industrial growth than the past decade's CAGR; the current investment multiplier of 1.06 is too modest to close the gap without a substantial rise in capital formation.
• Five sectors anchor manufacturing: textiles, food products, basic metals, machinery & equipment, and chemicals — with textiles, engineering goods, gems & jewellery, and metals leading exports.
• Sector roles diverge sharply: textiles deliver high jobs (around 15 per crore of GSVA); chemicals and metals drive output and exports but are capital-intensive — calling for a balanced policy mix.
• Emerging sectors show 1.5x–5x multipliers with differentiated profiles: data centres (high fiscal returns, low jobs), eco-tourism and agro-processing (high jobs, moderate returns), logistics and media & entertainment (balanced), green hydrogen and ethanol (high-multiplier energy plays).

Recommended priorities: adopt data-driven investment evaluation across competitiveness, employment, sustainability, and export potential; create a central body for industrial data and coordination; strengthen logistics, utilities, and worker housing; and institutionalise replicable good practices across sectors and regions.