India’s largest state by area, Rajasthanalso stands out in economic performance and achieved agreater reduction in poverty than any other low incomestate. This strong performance reflects broad-based effortstowards policy reform across sectors that resulted in a moreproductive and diversified agriculture sector, higherinvestments in manufacturing, and substantial improvementsin public service delivery. These achievementsnotwithstanding, Rajasthan still lags behind many otherstates in India. The state is also among the lowerperformers in womens’ and girls’ education and gender gapshave shown little improvement over the years. Rajasthan isnow at a crossroads and faces serious challenges forsustaining rapid and inclusive growth. In recent years,growth has slowed down and the crucial tourism sector haslost market share. A worsening water crisis is makingtraditional agricultural practices increasinglyunsustainable, while growing fiscal pressures, due partly todeficiencies in the electricity sector, are narrowing thefiscal space available to implement comprehensive policyactions. The purpose of this report is to help develop apossible growth strategy as part of the ongoing dialoguewith the state. In particular, the report is expected toserve as important input to the Bank’s lending strategy forthe state going forward by proposing an overall strategicframework for the development of the state.
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