Economy Of Rajasthan

Rajasthan is one of the least densely populated states in India. It is also one of the poorest state with low per capita income and low level of literacy, specially in women. The economy of Rajasthan is agricultural or pastoral economy. Besides this, there are good mineral resources, industries, industrial areas and an expanding tourism industry in Rajasthan.

Rajasthan has the eighth largest economy with a Net State Domestic Product (NSDP) of over US$ 11.5 billion. Over the last ten years from 1994 to 2003, the state of Rajasthan underwent growth at a Compounded Average Growth Rate (CAGR) of 6% increasing from US$ 6.4 billion to US$ 11.5 billion.

In the years 1995-96 and 2001-02, the industrial sector of the state underwent a growth rate of 6.9% per annum. The growth rate of the service sector was 7.4 %.

The main economy of Rajasthan is agrarian based. Agriculture is the leading economy of the state accounting for 22.5 per cent. The total cultivated area of the state encompasses about 20 million hectares and out of this only 20% of the land is irrigated.

The principal crops Barley, Wheat, Gram, Pulses, Oil Seeds, Bajra, Pulses, Jowar, Maize Ground Nuts, fruits and vegetables and spices.

Next to the agricultural sector, the Industry of Rajasthan plays a major role in the economy. The industrial sector accounts for about 32.5 per cent of the total share of the state’s economy. The main industries of Rajasthan include textile, rugs, woolen goods, vegetable oil and dyes. Heavy industries consist of copper and zinc smelting and the manufacture of railway rolling stock. The other industries related to Private Sector include steel, cement, ceramics and glass wares, electronic, leather and footwear, stone and other chemical industries. Rajasthan is also known for its textile industry and the state is the fourth largest producer of spun yarn in India.

Rajasthan is also the major producer of cement contributing to 15 per cent of the national cement production.

Rajasthan is the third major salt producing state of the country and accounts for one-tenth of the national salt production.

Rajasthan is the second largest mineral producing state in India and houses about 90% of the total mineral reserves of the country. It shares 24% of the aggregate national production of non-metallic minerals. Thus the Mining sector is a very important revenue earner for the state. From this sector Rajasthan earns as mineral royalty an annual income of more than US$ 100 Million.

Another most important revenue contributor of the state is Tourism and accounts for about 15% of the economy of Rajasthan. Rajasthan contributes about 11.2 per cent and 3.3 per cent share in India’s foreign and domestic tourist arrivals respectively. The Rajasthan government has brought down the luxury tax from 10% to 8% to boost the tourism industry of Rajasthan.

The services sector accounts for 45 per cent of the GDP of the state. Other sources of economy for the state are Infrastructure, Transportation, Energy, Power, Telecommunications, and Banking & Financial Institutions.

Macro-economic Trend In Rajasthan Rajasthan's gross state domestic product for 2004 is estimated at $33 billion in current prices. Unemployment and Poverty is widespread, state count among BIMARU states.