If Rajasthan wants to become one of the top five performing states, Budget 2026–27 cannot be routine. It must answer three questions: Will the economy grow faster than the national average? Will that growth create durable jobs? And will it raise per capita income sustainably?Growth alone is insufficient. What matters is whether it creates jobs and steadily raises average incomes. Rajasthan’s economy has expanded in recent years, yet per capita income still trails leading states such as Tamil Nadu, Maharashtra and Karnataka. Catching up requires structural change, not incremental expansion. The first pillar is capital formation with fiscal credibility. Rajasthan must raise capital expenditure and protect it from compression during revenue stress. Capital expenditure should rise meaningfully as a share of total spending, while debt-to-GSDP is put on a declining trajectory. A top-five state cannot rely on unchecked borrowing. Rajasthan should institutionalise infrastructure recycling through Infrastructure Investment Trusts (InvITs), regulated by SEBI. Completed, revenue-generating assets—highways, transmission networks and renewable parks—can be monetised, with proceeds reinvested in new infrastructure. This creates a virtuous cycle: capital circulates rather than accumulating as debt. A formal, multi-year InvIT roadmap with clear targets would sustain capital formation and strengthen fiscal sustainability. Employment intensity is equally critical. Every major infrastructure project should be assessed not only for cost efficiency but also for jobs created per rupee invested. Growth that does not absorb labour will not lift per capita income. The second pillar is strengthening the productive base. The Rajasthan MSME (Facilitation of Establishment and Operation) Act, 2019, has simplified regulatory entry. The state has also digitised several approval and compliance processes and strengthened single-window mechanisms. The next phase should focus on integration and liquidity. Digital approval systems must be linked to structured payment-tracking and dispute-escalation mechanisms, especially in supply chains involving larger firms. A unified platform that monitors receivable cycles and enables timely intervention when delays occur would ease working capital pressures. Even modest reductions in payment cycles can materially improve MSME expansion and hiring. Human capital is the third pillar. Public education reform must shift from infrastructure inputs to learning outcomes. Foundational literacy and numeracy are non-negotiable, but competitiveness also requires alignment with emerging technologies. Public schools should embed computational thinking, digital fluency and data literacy in the curriculum. This is not about turning every child into a programmer; it is about building cognitive adaptability. Reliable connectivity, teacher upskilling in digital pedagogy, and exposure to robotics, renewable energy systems and agri-tech tools can prepare students for Rajasthan’s evolving growth sectors. Public health is equally central to income growth. High out-of-pocket medical expenses strain savings and push families into debt. Strengthening primary healthcare, preventive screening and telemedicine reduces household economic volatility. A healthy workforce is a productive workforce. The fourth pillar is green growth. Rajasthan’s solar advantage places it at the forefront of India’s renewable transition, but the opportunity extends beyond generation. The state should encourage manufacturing of solar components, battery storage systems and green hydrogen pilots, linked to skill development and industrial clusters. Rajasthan can position itself not merely as a power producer, but as a green manufacturing hub. Finally, local self-governance must be strengthened as an economic enabler. Urban local bodies and gram panchayats need predictable, performance-linked transfers tied to measurable outcomes such as property tax efficiency, sanitation and water management. Governance processes in local government institutions should be fundamentally altered to improve transparency, predictability and accountability. Strong local institutions improve infrastructure execution and reduce leakages. Decentralised fiscal empowerment and better governance raise grassroots productivity and support sustained income growth. To enter the top five, Budget 2026–27 should state three measurable commitments: sustained GSDP growth above the national average; a declining debt-to-GSDP trajectory over the medium term; and a rising share of capital expenditure financed increasingly through recycling rather than fresh borrowing. Growth without jobs will not significantly raise incomes. Jobs without productivity will not generate prosperity. Income growth without fiscal discipline will not endure. Rajasthan has the demographic strength, renewable advantage and industrial potential to move into the top tier of Indian states.The opportunity is real. The question is whether the Budget will rise to it.
