Rajasthan to focus on investment into key areas: CM Raje

The Chief Minister of Rajasthan, Vasundhara Raje after taking charge in 2013, for the first ever television interview spoke to CNBC-TV18’s Shereen Bhan on the reform and investment push undertaken by her government.Government of Rajasthan in association with Confederation of Indian Industry (CII) is organizing Resurgent Rajasthan Investors Summit on 19-20 November at Jaipur. The Resurgent Rajasthan Summit will be an unprecedented event with strategic conferences, panel discussions, round-table deliberations, presentations, roadshows in various parts of India and abroad and one-on-one business meetings, Signing of MoUs for investments in RajasthanThe main aim of the government from the Summit is not just to garner huge investments but to marry the state’s strength with that of the investing partners, said Raje. It is very important for the state to keep the partners happy, to get other people to invest and essentially to invest in areas where Rajasthan wants to make a difference – be it manufacturing, textiles, stone, petroleum, mines etc.These investments will go towards creating jobs, infrastructure and general social happiness. Japan has invested large amounts to the state so far, and now Singapore is also a partner country with whome the state would be looking at development in ITES for hospitality industry, said Raje.    Raje said her government’s clear focus is to bring in investments into the state because there is a need for quick development. Our strategy is to focus on social reforms, social justice for the people and effective governance, said Raje.Discussing the power and discoms issue, she said the state will have to take tough decisions to get discoms back on track because power is a pillar on which an economy stands. “Want to make power sector strong and stand on its own feet”, she added.Below is the verbatim transcript of the interview..Q: If you look at your TV screen today, there are ads from the Punjab government, there are ads from the Wet Bengal government, just about every state government is building on the Prime Minister’s idea of competitive federalism which in itself is not a new idea, but he has thrown his weight behind it. What would you say would be the differentiator as far as Rajasthan is concerned, because you are pretty much going after the same set of investors, aren’t you?A: I would not look at it like that. This is something that I would be continuing from 2008. We had put this programme in place during that period. It is of course something that gets additional impetus from the fact that the Prime Minister has put his weight behind it and that cooperative federalism is now a very big thing on the screen. But, I do believe that when we fought this election, there was some kind of unease amongst the people. There was also a feeling of urgency and interest for change. There is definitely a kind of impression amongst all of the electorate that I saw that it would be very important to create development quickly and we cannot wait for it.Q: One of your ministers has been quoted as saying that you expect to garner or at least that is the attempt or the aim about Rs two lakh crore worth of investments from the Resurgent Rajasthan road show that you are going to be doing on November 19 and 20. Would a large chunk of this Rs two lakh crore really be coming in from Japanese investors where there is a long association in fact Rajasthan is the only state where you have a special zone for Japanese investors? Is a bulk of that also going to come in from the oil and gas sector where already you find memorandum of understandings (MoU) worth Rs 30,000 crore?It is not the number, it is about being able to keep our partners happy, to be able to get other people to invest and also to invest in the areas where Rajasthan wants to make a difference. So, whether it is manufacturing, whether it is textile, whether it is stone which we are very rich with or whether it is petroleum as you said, mines maybe we could look at, all of these areas in which we have a strength. Those are the areas which we are actually looking at to working with our partners.I am really delighted to say that with Singapore for example, which is our partner country now, we are going in for a large investment in ITeS for hospitality which will probably be one the best when it is done in 2016 in the country. So, it is things like that where our strengths are, as you know tourism, hospitality and other strengths, to be able to actually marry our strengths with those of our partners. That is what we are looking at and we hope that we will generate a good enough investment that will go towards creating jobs, infrastructure and general social happiness.Q: Let me address each of those sectors and let me start by asking you about oil and gas because in September, this year, the government has inked MoUs worth over Rs 30,000 crore. I understand also that there is a proposal at this point in time and you are evaluating and assessing a possibility of a refinery. A report was expected this month, where do things currently stand on that because that has been a concern that domestic value add is not really happening and perhaps this would be the best way.A: I think that at a moment in time, there was a serious discussion going on with the ministry with the company concerned and with us. This meeting took place only about – I think it was two weeks ago. I do not expect a complete result on this because it is going to be renegotiated to some extent because Rajasthan requires to get the best out of it and so does the company. We need to work together to be able to find the best solution for this.We are a pretty much well on our way and when we are ready we will make the announcement.Q: Where would things currently stand as far as this proposal is concerned? Is it stuck perhaps?A: No, not at all.Q: Because of tax incentives or any uncertainty on that front?A: No, there is none, but we are naturally looking to find the best for Rajasthan as they are looking to find the best for their company. But there is no such thing as being stuck on any of the issues. In fact the talks are proceeding very smoothly and we should be able to come to a conclusion soon.Q: Let me ask you about land. Tamil Nadu incidentally has been the first state government to actually deviate from the central law and it got presidential assent as early as January. You were attempting to do very much the same but it did not go down that road. How soon can we expect your government to seek presidential assent to deviate from the central law?A: We don't have a problem with land at all, we never did because we always give back 25 percent of developed land back to our people. In fact in the solar fields, we have done something quite new. Our investors are actually now, working directly with the farmers so they can have a joint venture with the farmers as they wish. That farmer is happy or in a position to make his own arrangement or agreement with the people who are coming to invest. The other proposal is that we have said that the farmers can make a company and then work with it. So, there are lots of proposals with them.Q: So, the 2013 land bill is not holding any discomfort?A: There has been no discomfort, we are working comfortably on this. Everyone is going down a very happy path. I do not really believe that we need to give this kind of hype. And as far as we are concerned, government itself has huge tracts of land across the state which we are consolidating at the moment. We have already consolidated 6,000 hectares of land and we are looking at something like 10,000, it will go up to 10,000 so, 4,000 more will happen before the Resurgent Rajasthan.As far as we are concerned, we have so much availability with this, 10000 hectares is a large availability. We will go on from there.Q: So, you are saying there is no need to seek presidential assent to try and change?A: It never was in that situation. What I am trying to say is that we are very comfortable, we have the Mahindra SEZ, we have so many things that we have done with land. What we need to do, we will do it at our own pace and with consultation.Q: So, the social impact assessment or the consent clause which the BJP government at the centre said is going to stall all development is not a concern as far as you are concerned?A: No, we don't have a problem with that, I have just explained that to you.Q: So, you are saying that before Resurgent Rajasthan which is in November you will have a landbank of about 10000 hectares?A: We will have 10000 hectares of landbank. We will also allow people to work in the solar energy field where huge tracts of land are required directly with the farmers. It is not an issue.Q: Since you have specifically raised the issue as far as solar energy is concerned, how big an area of focus is this going to be because I understand that there are conversations on with Softbank Bharti joint venture that is looking at renewable energy specifically solar energy. How big of an item is this going to be on your agenda?A: Very big item on our agenda. I am really very happy because a lot of people had enquired and have invested. To the extent of something like 26000 megawatt has already been worked out between us and to the extent that they might even go up to 32000 megawatt. We were only looking at 25000 megawatts in five years, that was part of our manifesto. So, we have already gone over that amount. Now the idea is to make it comfortable for the parties who are coming to invest. So, we are in the process of doing that. We just don\\'t want to over extend ourselves to such a thing that we are not going to be able to look after the people who are coming into Rajasthan.Q: How soon can expect a resolution as far as the state of the distribution companies (Discoms) are concerned to address Discom debt for instance and also I understand that your government is working to move towards privatisation or divesture both on the generation side as well as the distribution side of the state electricity boards (SEB). What can you share with us on the road map ahead as far as the Discom is concerned?A: We had legacy issues definitely and there were some problems which we definitely believe that need to be ironed out quickly. Naturally, we would have to do some things like upgrading. There will be some things like Aggregate Technical and Commercial (AT&C) losses, all of these we are working on. We are also looking at two or three districts which could work in a public-private partnership with different companies. So, we are in the process of working that out.I believe even in the generation area we are talking with various companies. Let us see what the results of this is going to be.Q: Do you believe that mere flexibility as far as the FRBM limit is concerned will allow you to ride out to this problem?A: It is not just one thing. There will have to be lots of small things which will be going as part of the package, something that we will be doing, something that they will be doing and obviously it is incumbent upon both of us to see that we put across a package which is going to be able to help revise not just the fortunes of the state but also make us contributor to the economy of the country.Q: How much of the debts could you perhaps take on as a state?A: We are discussing it at the moment and we will come to conclusions in a little while.Q: Let me talk to you about one of the areas where your government has actually made significant progress and that is on the issue of labour reforms. In fact you were ahead of the central government to make amendments to several laws pertaining to labour. If I look at the Department of Industrial Policy & Promotion's (DIPP) and the World Bank's Ease of Doing Business report the state or Government of Rajasthan comes in at number six in terms of the ease of doing business but interestingly on labour compliance despite the fact that you have actually moved significantly ahead on amending the law on labour compliance you fall short as a state that haven't done as much work on reforms?A: Yes, so we need to do a little bit more. We are working hard on that but as far as we are concerned we have opened up a huge area and a lot of thinking on a sector which perhaps not many people were paying attention and I believe that itself is a significant contribution from the states. Of course there is a lot more to do but we have taken some baby steps in the right directions and it is going to be a win-win situation for all because opening up the labour areas and it is looking at making it employment friendly and job creation is actually the end of our thinking. So, to be able to set this up in such a fashion where there is an interest in job creation. So, many of our youngsters are out on the road just now. To be able to skill them, to work closely with jobs that we create will really help the investors when they come in. They won't have to go to Tamil Nadu or to Bangalore or any of the others like they used to do or to even Bengal but will happen now is that you will be having educated and skilled youth who will be able to plug happily into the jobs that are created by the investments coming in which is what this whole thing is about.Q: Agriculture reforms and agricultural growth for the State of Rajasthan has been significantly higher than the national average along with states like Madhya Pradesh. What more can we expect in terms of perhaps models of public-private partnership as far as agriculture reforms are concerned and what is the aspiration really to drive growth because that is the key engine of growth for your state?A: Yes, at 42 percent of our people are actually with agriculture still. We are probably one of the largest states dependent on agriculture but we have a major problem and that is the weather. Also the fact that being the largest state with the least amount of water that also gets in our way. So, we are trying very hard to work with the logistics on the side that is the cold chains, the godowns, the storing facilities and also shelf life improvement on one side. On the other side bringing in crops which are less water intensive but also at the same time working with countries like Israel to create date farms and olives and again all those which don't require much water.We are also looking at improving the structure of our canals which haven't been done for so many years and have seen enormous leakage that we can't afford because there is a lot of water that comes in from various other states through those canals but we lose a lot of it because of the state in which the canals are. So, this is going to be one of the few areas where we are going to be actually working with those canals, so that every drop of water is made to count.Q: That is as far as the agriculture is concerned but if I am going to ask you about industry because industry or the share of industry's growth in the state's Gross Domestic Product (GDP) has actually been declining significantly between FY09 and FY15 from 31 percent down to about 28 percent whereas on the agriculture side you have been higher than national average. On the industry side you have been actually been significantly lower than the national average. What are we likely to see you do to try and provide impetus as far as industry sector is concerned. Services has done well for you, but on the industry side what can we expect?A: As I said first of all to look at the infrastructure now you have a good infrastructure. We are looking at, as I said, Rajasthan not being land locked in that sense any more. We are also looking at seeing railways doing well with us in Rajasthan a large network of railways. You have now eight containers depots here in Rajasthan but apart from that you have two international and three or four domestic airports in Rajasthan. All of these are connected well to other states.So, DMIC coming up alongside the freight corridor and going through almost 39 percent of Rajasthan but 60 percent on most of our districts will make a lot of difference to us. All of this help industries because now no more are you landlocked, no more do you have a problem. You can get your goods to areas quite fast, there is that possibility that we make a connection with maybe Mundra at some point in time through Barmer. That is a big deal.All of these things happening it has now become a very relevant space for investment to come into. Also with using our Rajasthan investment promotion plan we have a lot of things where tax rebates and others has been given to industries and then we are getting close to Delhi. So, all of these things have worked together to create that. And as you can see that in one year that investments and that is why we are number six from god know where we were but number six means that we have made that step in the right direction and that fact that in one year there is that interest in investments also makes a lot of difference to Rajasthan. The idea is actually to be able to balance investment with agriculture and education and skills which are also very important and also health. And if we are able to get this well rounded kind of picture we will be in the right direction._PAGEBREAK_     Q: Let me start by asking you about healthcare, what more can we expect in terms of public private partnership? I have heard of some very interesting models where the social sector is also working with the state government of Rajasthan specifically in the healthcare sector, what can we expect in terms of healthcare and healthcare reforms?A:  There is a problem because being a large state with a huge outreach there is a major shortage of doctors and we would always be chasing our tail as far as this is concerned, we understand that. So, it is very important to work with PPP partners and that is what we are doing just now. We have picked up on using the lowest denominator  as far as the health area is concerned which is the primary health centre. Primary health centres are right down the districts and we felt that it would be very important for NGOs to work with us. So, we have foundations like the Wish Foundation working with us as also industries.There are now private partnerships that we have made with companies that are working with health. Strangely enough which we did not think it will be possible but people are happy with it.Q: If I could ask you specifically as far as education is concerned because there again there is a problem in terms of the quality of the growth that we are seeing. Female literacy numbers both rural as well as urban significantly lower than the national average. What are you going to do in terms of perhaps involving the private sector if at all to try and change that picture?A: At the moment we have looked at the right the education but basically taking it to right to learning. I believe that the model that we have now been able to put forward is something that has been taken across the country which I am very proud of. The idea is just now to also try to create schools which go from standard 1 to 12 in the main panchayat headquarter areas. We have started with about 3000 this year, we will carry on later on this year. We at the moment are dealing with primary and medium schools where these public private partnerships have taken place, I think we are a little more confident now and our teachers are doing a good job. With public private partnership coming in together with them I believe that we have an opportunity of being able to take this to a different level. To be able to bring in new subjects, to be able to refine the subjects that we are already working at and to be able to make our presence felt, this thing that we have done which is right to education moving on to right to learning has made the difference to us also.Q: Let me ask you about reforms, often both at the centre as well as the state level you sort of get boxed into this ideological debate on whether privatisation is good, privatisation is bad and so on and so forth. At this point in time if I were to ask you what is the position for instance of the state staying in business or state divesting majority in state run businesses or pure play privatisation     for instance  because those are issues that I understand at least as far as power is concerned that you are looking at but is there any ideological debate on whether divestment is a good idea or a bad idea or privatisation is a good idea off the table?A: There has been some thinking so to say over  all this period of time. However I think the time has come for all of us to look at these things a little bit more closely and to understand benefits that might be accruing to us which perhaps we are not even looking at. We are certainly looking at it, whether it is divestment, we are certainly looking at all of these things to see how it can make things easier for everybody in Rajasthan. However that doesn't mean that we are going to take away from one and give it to other. The natural corollary  to this is that somebody will lose a job, but it is not naturally that. There are lot of other ways of looking at resettling and working with divestment which would be for the benefit of the state. I am certainly looking at it for the moment.Q: Giving up majority control?A: Yes why not.Q: So, full privatisation, you are not averse to that?A: No, I would keep a certain amount within the company I am sure but I am not averse to giving up majority control.Q: Is there a list that has been identified in terms of where the government  may want to stay invested in and the kind of businesses that government considers non-core?A: I think things like tourism, things like power that we were talking about, there are some areas where it is imperative that these things happen. There are some areas in which we can look at it further because it is important to be able to create resources to create more resources. It is very important to be able to look at new ways of doing this.Q: So the focus is clearly on revenue generation as far as you are concerned?A: I am not looking at saying no to anything and yes to everything. I am looking at a happy mix and I need to get convinced, that is all. The time has come for us to sit with investments and investors to see what are the good things that can come out of this to the state. The benefits that will accrue to the state are going to make a difference to us.Q: But how hard is it getting for state governments like yours to try and draw investments because as I said just about every state government today is doing a road show and you are all going after the same investors, whether it is Telangana, the state of Andhra Pradesh, state of West Bengal, Punjab you are all trying to attract the same pieces of the pie if I could call it that. How hard is it really getting at this point of time and has it moved beyond tax incentive because really the old model, the Uttarakhand model which was provide tax incentive, tax suite doesn't bring industry in?A: You know if you are an industrialist you want to go where the best is being offered naturally. So, these things will make a different in their mind as to where they should go. But then there are other things that make a difference. For example there are people who have enjoyed Rajasthan, who have lived in Rajasthan and want to come back to Rajasthan. So, there is that psychology. There is also those people who believe that the kind of industry that they are setting up is going to be able to - for example, defence industry. In time to come when they are coming here, first of all there is a huge border we have then also the fact that there are huge installation for army where people would perhaps be able to test. They wouldn't be able to do it in any other place.Q: So, is defence going to be a key focus area for you?A: I believe so. Defence is a very interesting and important area for us and we have been working at it since the time it was announced but I am saying, Andhra would have a costal line, Maharashtra is a coastal line, we don't have it will we have this. There are different areas that we are going to be looking at and different psychology that will be at work but yes, definitely the comfort and the ease of doing business is going to make a difference too to people.Q: What about changes in government because that is very closely linked to the ease of doing business, when you say governance at the end of the day what does it really mean to somebody on the ground who is starting the business, who is trying to get a utility connection so on and so forth?A: Things like online single window clearance for example, just as an example if we could look at how we could take care of things like environmental pollution board for example to giving permissions online, all the permissions if they could come online, things that take many months for people to do if those could be done quickly and painlessly  industry would want to be there. Nobody wants to go through the grind as they have been in old days where they would have to push and the state would reply and say nothing. However if we have to be world citizens and if we have to put India into that bracket then for us it is very important that each state does its best to create that kind of resource base for this country. Therefore it is very important that every state makes that effort and therefore Rajasthan is making the effort to be able to bring in those resources to create the job environment as well as social environment. As I said it is not about just living in an economy, it is also about the social environment. We need to be able to make that and make our citizens happy. So, both those work together and that is our strength. There are things that I have here in Rajasthan which others don't for example solar power, people will come here to Rajasthan because it has the best solar power availability. So, there are strengths of every states and people will go there and there are then those narrow things which you can may be fall off on one side or the other but generally states have strengths which they will sell.