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In former times, Rajasthan happened to be one of the least densely populated state in India and came in the list of one of the poorest too. The literacy rate among women and the per capita income was also terribly low. In the year 2004, the gross domestic product of the state was thirty three billion dollars and poverty and unemployment could be seen everywhere especially in the Bimaru (which means Sick) States of Rajasthan. The culture and Heritage of the state were taken as an advantage and tourism were developed and its employees the maximum number of people. The revenue earning has also seen an increase in the past few years in this sector as the Palaces were converted into five star hotels. The Thar Desert also saw industrialization with the oil being hit in the Desert of Thar. Natural Resources, Agriculture and Tourism play a very important part in growing the economy of the state. The Compounded Average Growth Rate (CAGR) saw a growth of six percent which increased from 6.5 billion dollars to 11.5 billion dollars in ten years from the year 1994 to the year 2003.

Rajasthan has no doubt emerged as an investment destination of India which has attracted a lot of Investors over the years. The economic reforms, different variety of raw materials which are cheaper than anywhere else, and low cost labours, the financial sector’s maturity and stability in the political affairs are the main reasons why the economic growth is seen in Rajasthan.

The growth in the economy of Rajasthan can be clearly seen as the policies and the infrastructure of the economy is being developed by the government. A lot of private sector companies are showing interest in investing in the state.

Economic Factors


Twenty two percent of the economy is accounted by the agriculture which is clearly leading it. Twenty million hectares of land is being cultivated in which only twenty percent of the land is being irrigated. The main crops which are cultivated in the state are Barley, Pulses, Wheat, Oil Seeds, Gram, Jowar, Bajra, Maize Ground Nuts and Pulses, fruits, vegetables and spices.

Rajasthan has two crop seasons in which June and July are the months in which the major crops are sown and are harvested in the months of September and October. The crops include ground nuts, Jowar, Bajra, Maize and Pulses. The second season in which the Rabi crops like barley, wheat, pulses, oil seeds and gram are sown starts with the sowing which is in the months of October and November and the harvesting starts in the month of March and April. The areas in which the soil suits the fruit cultivation, they are sown throughout the year. Tanks and wells are the main source of irrigation used in Rajasthan.


32.5 percent of the economy is contributed by the industrial sector and the small industries which have been set up all around the state can be seen everywhere. Copper and zinc are in abundance in the state and the industries which depend on such metals are taking advantage of it. Gypsum, mica and lignite are also there in a very large number. The textile industry is also developing at a fast rate in Rajasthan as the production of cotton is very high. Ball bearings, caustic soda, cement and sugar are some other private industries which are being developed in the state.

Rugs, textile, vegetable oil, dyes and woollen goods are other industries which contribute to the economy of Rajasthan. The railway rolling rock is also manufactured in Rajasthan in the heavy industries which also include zinc and copper smelting. There are other private sectors which have industries of cement, steel, glass wares, ceramics, leather, footwear and electronic items. The textile industry in Rajasthan which produces spun yarn is the fourth largest producing industry in the world. Cement production is also not behind as Rajasthan alone produces fifteen percent of the total cement produced in India. One tenth of the salt produced in India comes from Rajasthan and stands third in the country.

The mineral reserves in Rajasthan are the second largest in India and account for ninety percent of reserves of the country. The non metallic minerals in Rajasthan come out to be twenty percent of the total production in the country.


Tourism is another important contributor to the economy in Rajasthan and accounts to fifteen percent of the entire economy. 11.2 percent of the total foreign tourist of India arrives in Rajasthan and 3.3 percent in the case of domestic tourist. The luxury tax has also gone down from ten to eight percent, which has increased the tourism of Rajasthan
Forty Five percent of the Gross Domestic Product comes from the service sector with other sources being of Transportation, Power, banking and Finance and Energy reserves.

Crude Oil

One hundred fifty million Rupees was being generated per day from crude oil in Rajasthan a few years back, which is estimated to increase to twenty five Crore per day by the end of this year which is an increase of sixty six percent. From 1.75 lakh barrel per day which was being extracted, the government has permitted to extract three lakh barrels per day now. Rajasthan is soon going to be a lender in crude oil once the target is complete and they are successful in extracting three lakh barrels per day. This will increase the production of crude oil in India by fifteen percent.

Macro-Economic Trend

Rajasthan is no doubt a leading investment destination of India in the previous year and the Manufacturing and the IT sector are being developed with a great speed with millions of jobs being expected in a few years.

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