Rajasthan has been in the news recently for its social welfare and people-friendly schemes launched by the Ashok Gehlot government. While the opposition has labeled it as freebies being distributed during an election year, Chief Minister Ashok Gehlot has insisted that they are not freebies and have been launched after much thought and discussion.
Rajasthan’s fiscal deficit, which measures how much expenditure exceeds revenue, has been falling and recently falling faster than the average for all other states. Moreover, Rajasthan’s receipts as a percentage of the state’s gross domestic product (GSDP) have been higher than the average for all states over the last decade.
Additionally, Rajasthan is spending a higher proportion of its overall expenditure on social sectors like health and education as compared to the average for all states. However, its spending has been lower than average for a while now, but even this has been growing in recent years.
During the pandemic, Rajasthan has done well to bring down its fiscal deficit, which was not as much as other states. Rajasthan’s revenue receipts, which include taxation, were mostly flat as a percentage of its GSDP under the former chief minister Vasundhara Raje. However, the revenue receipts under Gehlot have seen a surprising change, first dropping during the pandemic and then mounting a robust recovery for the subsequent two years.
The state government believes in creating demand so that the other part benefits by creating a continuous supply chain. For instance, if a person saves on getting a gas cylinder for Rs 500, they will spend that amount elsewhere, thereby boosting the economy. Rajasthan emerged as the second most attractive destination for investments in India in FY 2022, with the highest rate of growth during the period, attracting new investments worth Rs 2.37 trillion.
During the period from October 2019 to September 2022, Rajasthan received FDI inflows of USD 1.88 billion, according to data from Invest India. Officials say Rajasthan has also become financially more independent, with a higher tax and non-tax revenue than the average for all states and both have been rising recently.
