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India By State - Rajasthan - Taxation & Legalities




Taxation & Legalities

 

Policies & Incentives

Industrial Policy

Rajasthan was the first State in the country to adopt the International Competitive bidding route for setting up power projects and to announce a State Road policy, facilitating the entry of private enterprises in the Roads sectors.

Rajasthan is now among the six fastest growing states of the country. The principal objective of a new policy is to make preferred state for investment in sectors and to improve the competitiveness.

Policy will lay emphasis of Industrial growth, increasing employment opportunities, improving productivity, ensuring sustainable development and strengthening the SSI, Tiny and Cottage Industry sector.

The new strategy envisages the development of clusters offering economies of agglomeration and thrust sectors. It is one of the highest priorities. The plans for infrastructure development will take into account the resource endowment and the growth potential of each area. Special emphasis will be given to the development of Thrust sectors, which have been identified keeping in view their infrastructural requirements, growth potential and the capacity to generate employment.

Simplification of rules and procedures, timely and smooth delivery of services will receive continued attention. Special efforts will be made for developing Government-Industry partnership in the implementation of the Policy. Greater emphasis will be laid on development of human resources for emerging requirement of industry. The basic approach of all the initiatives will be to encourage increasingly greater participation of private enterprise in the State's economic growth.

Health care policy

Keys Initiatives are the following:

  • To promote Medical & Heath Care Institutions, Medical & Dental Colleges
  • and support units like Diagnostic Centres, Blood Banks and Paramedical Training Institutes
  • To ensure delivery of Quality Health Care at reasonable costs
  • To promote Rajasthan as a Medical Tourism destination
  • To develop Complementary and Alternative Medicine Centres
  • To develop Super Specialty Health Care Institutions
  • To promote Public Private Participation in Medical & Health Sector

Hotel Policy

  • Ensuring easy availability of suitable land for development of Hotel/Accommodation infrastructure
  • Property tax to be charged as per industrial rates.
  • Provide Higher Floor Area Ratio (FAR) for new hotel projects
  • Water supply charges as per industrial rates

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IT Policy

Rajasthan has taken steps to spread adoption of information technology in various aspects of governance. The state has one of the largest non-telecom fibre-optic networks covering 407 villages and providing Internet, cable television and e-governance services.

The state has introduced "Lokmitra" and "Janmitra", two web enabled payment services for electricity, water and phone bills. A computerised registration system for property transactions has been introduced. The state has taken lead in computerizing land records in the state. The programme has already covered 226 of the 241 land record units in the state. The transport department has introduced online vehicle registrations, licenses and other certificates in Jaipur, Jodhpur and Sikar. These cities also have online facilities for issue of birth and death certificates.

The Government of Rajasthan, in association with private investors, has established the Rajasthan Venture Capital Fund (RVCF), with the objective of promoting companies in IT, bio-technology and other technology driven businesses. The fund is looking for projects offering potential for an attractive growth and earnings located in and around Rajasthan. RVCF would undertake individual investment up to US$ 1 million.

Salient Features

  • An escort service will be started with one Government official becoming the single point of contact for approvals and clearances.
  • Exemption from certain provisions related to working on declared holidays, opening and closing hours and running 3-shift operations.
  • Fiscal incentives would be, as given in the Rajasthan Investment Promotion Policy, 2003.
  • Inspection by Labour department waived off.
  • IT and ITES units declared as Public Utility Services under the provisions of the Industrial Disputes Act, 1947
  • Mega Projects shall be entitled to a special package of incentives
  • Rebate in cost of Government land or land made available by the RIICO.
  • Self certification allowed for IT & ITES companies for several compliances.
  • Software units would be permitted to be set up in residential areas.
  • The FAR applicable shall be up to double of what is applicable for commercial buildings
  • VAT on all products has been rationalised at minimum floor rate of four per cent.

Special Economic Zone (SEZ) Policy

The Government of Rajasthan has adopted the SEZ policy for developing Special Economic Zones in the state. The SEZs, earmarked as duty-free enclaves, will have a relaxed and business friendly policy regime, aimed at promoting rapid industrial development and employment generation. The approved policy regime includes:

  • Exemption from stamp duty and registration fees
  • Exemption of all state and local taxes and levies for transactions with the SEZ and for supply from domestic tariff areas to the SEZ
  • Expeditious process for land acquisition to set up SEZs
  • Grant of labour and environment related permits and approvals through a dedicated single window mechanism
  • Permission to generate electricity for own consumption

Tourism Policy

Rajasthan has many different cities to visit (Jaipur, Ajmer, Mount Abu, Jaisalmer, Udaipur.). This state is one of the leading tourist states of India. The state's new policy was released in 2001. This policy designed to ensure optimum utilization of rich tourism resources to generate employment in rural areas especially for unemployed rural youth and to attract the maximum number of domestic and international tourists.

  • Increase employment opportunities,
  • Preservation of rich natural habitat and bio-diversity, historical, architectural and cultural heritage of Rajasthan; special emphasis on conservation of historical monuments in Rajasthan.
  • To facilitate the growth of tourism in the State and to further involve the private sector in the development of tourism in Rajasthan.
  • To make tourism a "People's Industry" in the state
  • To develop a ready market of the rich and varied handicrafts and cottage industries of Rajasthan; ensure welfare of artisans/ artistes;
  • To promote inter cultural understanding through religious / pilgrim tourism and fairs and festivals;
  • To promote socio-economic development of Rajasthan through Tourism with special thrust on backward areas
  • To minimize the negative impacts of tourism and promote sustainable tourism
  • To open new vistas in tourism like Adventure tourism, Eco-tourism, Camel/Horse safaris, River and Canal cruise, House boats in Rajasthan (Palace-On-Waves), Educational Tourism, Caravan Tourism and Village Tourism
  • Jawahar Kala Kendra, Jaipur and other cultural institutions will be associated with Tourism development.

The Role of RTDC in Tourism Development

The role of development of industrial infrastructure, which has been performed successfully by Rajasthan Industrial & Investment Corporation (RIICO) in industrial sector, similar role of development of tourism related infrastructure would be performed by RTDC.

RTDC would acquire or get allotted land from the Government, and develop it for setting up hotels and other tourism related projects. Collectors would earmark suitable sites around major tourist areas which would be developed for tourism related infrastructure.

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Doing Business in Rajasthan

Department

Timelines

Environment Site/environment clearance: 90 days
NOC to establish: 45 days
NOC to operate: 30 days
Renewal of consent: 30 days
Industries Letter of intent/industrial license: 15 days
Sponsoring for essential raw materials: 30 days
Incentives District level clearance: 30 days
State level clearance: 45 days
Medical and Health Drug License: 45 days
Power Loads up to 60 HP: 66 days
Loads above 60 HP and up to 300 KW: 90 days
Loads above 300 HP and up to 3000 KW: 180 days
Load above 3000 KW and up to 33KV: 375 days
Revenue Land conversion up to 20 hectares: 30 days
Land conversion above 20 hectares: 60 days
Land allotment: 30 days
Land allotment if government approval is required: 60 days
RIICO/RFC Sanction of loan: 60 days
Allotment of plot in industrial areas: 15 days

 

Cost of setting up business

An indicative table on cost of setting up business in Rajasthan

Indicator

Value (in US$)

Industrial land (per sq mts) Jaipur- 13-30
Kota-4-10
Udaipur-2 - 10
Office space rent (per sq ft per month) Jaipur - 0.50
Residential rent (for a 2,000 sq ft house, per month) 500
5-star hotel room (per night) 50
Electricity (per kWh) Commercial / Office - Industry-0.10
Water (per 1000 litres) 0.25 - 0.35

Note: Exchange rate used is INR 47 per US$

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More Information on Rajasthan

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