The Resurgent Rajasthan Partnership Summit and other initiatives by previous governments had transformed Rajasthan’s image as a high profile investment destination. But successive governments have failed to sustain investor’s perception.
By Anil Sharma
Rajasthan which has been consistently a top-ranking state in the annual ranking exercise for all States/UTs under the Business Reform Action Plan (BRAP) that is conducted by the Department of Industrial Policy and Promotion, DIPP in collaboration with the World Bank, is now losing its status fast, mainly to lack of bureaucratic hurdles and lack of political will.
The state, which is geographically largest, figured among the top ten states in all the three reports released till recently.
In 2015 and 2016, the state ranked 6th and 8th respectively in the country and made a lot of policy changes to climb up the ladder. In the last report released in 2018, the ranking dropped to 9th.
While Rajasthan has done well in the implementation of reforms securing 95.68% out of 100, on the user feedback front the performance has been less aggressive as in the top ranking states securing a much lesser score of 64%.
Rajasthan, as it appears, had started to lose the perception game a bit during the last BJP regime under the leadership of then Chief Minister Vasundhara Raje, but now it seems it is slipping much faster. Raje was a forward looking chief minister and had gone all out to bring investment in the state. She oranised Resurgent Rajasthan Partnership Summit (RRPS) in the end of 2015 that had strategic conferences, panel discussions, round-table deliberations, presentations and one-on-one business meetings.
Though the event became controversial, and it is still not known how much of investment came into the state after hundreds of MoUs were signed during the event, but there is no denying that the event, Resurgent Rajasthan, helped Rajasthan to showcase its strengths to investors not only in India but also globally.
Just look at the hard facts.
The National Council of Applied Economic Research, NCAER, releases State Investment Potential Index (N-SIPI) every year as a credible yardstick of how the investment climate of India’s States is changing. The first edition was launched in 2016 March. The Third edition was launched in 2018, August.
Covering all 29 States and the Delhi Union Territory, the index has been built on the basis of 5-6 pillars based on data relating to land, labour, infrastructure,economy,governance.
What makes this survey more interesting is the inclusion of perception survey to get the perception of the investors on these very factors.
The perceptions-based the survey, an integral part of N-SIPI, helps in assessing the ground level impact of various initiatives based on the perception of investors.
Rajasthan emerged as the 2nd best state to invest in after Gujarat in 2016 in the perception survey conducted by NCAER. The state had extremely positive perception across parameters including labor, infrastructure, economic and political climate as observed in 2016.
Rajasthan looked very rosy in the eyes of the investors. More than 50% of the respondents were planning business expansion in the state in 2016 Survey and 63% of respondents perceiving business conditions to be better in the year ahead.
What is remarkable is that the ranking based on just the data and factual information placed Rajasthan in 16th position but it jumped 7 points to 9thrank through the prism of perception that is by including the perception score.
This survey was done during the Resurgent Rajasthan phase. In order to improve the attractiveness of state and increase investment from private sectors, the Government of Rajasthan embarked on a sustained investment promotion campaign over a period of time which included investor meets, events, conferences, culminating into Resurgent Rajasthan Partnership Summit 2015. It included a sustained public relations and media campaign that was unleashed across leading channels including TV ,airports and social media. Actor Irrfan Khan was hired as a brand ambassador with the tagline “Rajasthan Hai Tayyar”.
Unfortunately due to internal bureaucratic tussles, the State lost the momentum built so amazingly in such a short span. The whole Resurgent Rajasthan effort was spun into a cesspool of lies, negatives and “scam.
A state that emerged like a phoenix and shot to the 2nd best place to invest in in the eyes of investors in 2016 dropped dramatically to the 11thrank in terms of perception as a business destination in 2018.
On objective parameters, the State showed improvement in infrastructure, labour, economic conditions in 2018 but the perception of these very indices dropped in 2018.
Influencing perceptions is essential to brand-building and this requires a concerted effort by all stakeholders. Destination promotion builds awareness, familiarity, and relationships in commercial networks (institutions, companies, individuals) that are critical in attracting investment making it important for economic development.
The funding for destination marketing and promotion should be prioritized in light of the substantial dividends that it is capable of producing. But the Rajasthan bureaucracy has other priorities where disruption of perceptions is a bigger game than the building of perception for the benefit of the state and its people.