Overview: Himachal Pradesh Economy - Himachal Pradesh General Studies

Himachal Pradesh is located in the northern region of India. The State is surrounded by Jammu and Kashmir on the north, Punjab on the west and the southwest, Haryana on the south, Uttar Pradesh on the south-east, and Tibet China on the east. Despite lacking rich natural resources like iron ore, and coal and being less fertile than other states in India, Himachal has progressed due to steady efforts of the hardworking people of the State and through implementation of progressive policies.

Gross State Domestic Product (GSDP) of Himachal Pradesh:

The Gross State Domestic Product (GSDP) at current prices, is estimated at ₹1,91,728 crore in FY 2022-23 (FR) as against ₹1,72,162 crore in Second Revised (SR) estimate in FY 2021-22, showing an increase of 11.4 per cent during the year.

GSDP at constant (2011-12) prices in FY 2022-23 (FR) is estimated at ₹1,33,372 crore against ₹1,24,770 crore in FY 2021-22 (SR) registering a growth of 6.9 per cent during the year.

The growth of 6.9 per cent in FY 2022-23 (FR) is mainly attributed to a 5.7 per cent growth in the primary sector, 5.1 per cent growth in the secondary sector, and 10.4 per cent growth in the tertiary sector of the economy.

Food grain production:

Food grain production, which was 15.79 lakh metric tonnes (MT) during FY 2021-22 decreased to 15.23 lakh MT in FY 2022-23 and is anticipated to be 16.52 lakh MT in FY 2023-24. Vegetable production increased to 18.67 lakh MT in FY 2022-23 as against 18.04 lakh MT in FY 2021-22.

Per Capita Income:

The PCI at current prices as per the first revised estimates for the year FY 2022- 23 is ₹2,18,788 as compared to ₹1,95,795 in FY 2021-22 which is an increase of 11.7 per cent.

As per current estimates based on economic conditions up to December, 2023, the economy of the State for FY 2023-24 is expected to grow by 7.1 per cent against 6.9 per cent during FY 2022-23

( Figure1.3).

Shift from agriculture sector to industries and services

The economy of the State has shown a shift from agriculture sector to industries and services as the percentage contribution of agriculture in total Gross State Domestic Product has declined from 57.9 per cent in 1950-51 to 55.5 per cent in 1967-68, 26.5 per cent in 1990-91 and 9.45 per cent in FY 2022-23.

The share of secondary and services sectors which were 1.1 and 5.9 per cent respectively in 1950-51 increased to 5.6 and 12.4 per cent in 1967-68, 9.4 and 19.8 per cent in 1990-91 and 41.97 and 44.08 per cent in FY 2022-23.

Declining share of the agriculture sector

The declining share of the agriculture sector does not affect the importance of this sector in the State economy as the growth in the primary sector of the State economy is still determined by the trend in agriculture and horticulture production. It is one of the major contributors to the total domestic product and has an overall impact on other sectors via input linkages, employment, trade transportation etc. Due to lack of irrigation facilities, agricultural production to a large extent still depends on timely rainfall and weather conditions.

Horticulture:

The State has made significant progress in the development of horticulture. The opographical variations and altitudinal differences coupled with deep and well-drained soils favour cultivation of temperate to sub-tropical fruits. The region is also suitable for the cultivation of ancillary horticultural produce like flowers, mushrooms, honey and hops.

Climate change mitigation

For climate change mitigation, Himachal Pradesh has taken various steps to achieve its targets. The State action plans on climate change aim to create institutional capacities and to implement sectoral activities to address climate change.

Power Supply:

Over the years State Government has taken several steps to provide an uninterrupted power supply in the State. Several steps have been taken to increase power generation, transmission and distribution. As a source of energy, hydropower is economically viable since it is non-polluting and environmentally sustainable. To restructure this sector, the Power Policy of the State attempts to address all aspects like capacity addition, energy security, access and availability of power, affordability, environment and assured employment to the people of Himachal. Private sector participation in terms of investments in this sector has been encouraging. Smaller projects
(up to 2 MW) have been reserved for investors from Himachal Pradesh and preference is given to them for projects up to 5 MW.

Welfare Initiatives

Focused Welfare Initiatives have been taken to sustain economic growth, the Government has consistently undertaken initiatives to improve socio-economic outcomes of the marginalized and vulnerable groups across caste, gender, occupational and other categories. The success of the welfare agenda rests on ensuring that the schemes are properly implemented, with their outcomes aligning with the vision of the Government’s decisions.

Natural calamity in the monsoon

The State was hit with severe Natural calamity in the monsoon months of 2023. Responding with unwavering resolve, the government allocated a special relief package of ₹4500 crore, increasing compensation by 25 times. Reconstruction aid for completely damaged houses was increased from ₹1 lakh 30 thousand to ₹7 lakh.

Up to March 31, 2024, families living in relief camps due to disasters are being given a rent of ₹5,000 per month in rural areas and ₹10,000 per month in urban areas. Besides LPG gas connection, free ration is also being provided to the affected families. There is a provision for providing cement for house construction at government rates and free electricity and water connections.

To address the challenges faced by apple-dominated areas during natural disasters, ₹110 crore has been allocated for road restoration, demonstrating the government’s commitment to the welfare of the farming community.

Mukhya Mantri Sukh Aashray Scheme:

Himachal Pradesh stands as a pioneering state with initiatives like the Mukhya Mantri Sukh Aashray Scheme, introducing a legal frame work for protection of orphans. In a remarkable gesture, 4,000 orphans have been granted the status of “Children of the State” under this scheme. Mukhya Mantri Sukh Aashray Scheme bearing the expenses of education and providing pocket money to the orphans.

Green Energy State by March 31, 2026

The Government is steering Himachal towards becoming a Green Energy State by March 31, 2026.
The progressive e-vehicle policy earmarks 54 locations for charging stations in the initial phase.
The government has signed MoUs for Green Hydrogen and Ammonia Projects, attracting an investment exceeding ₹ 4,000 crore creating over 3,500 employment opportunities.
The foundation stone for a ₹ 220 crore solar power plant in Pekhubela was laid, which will yield annual income of about ₹27 crore for the State.

Education:

To ensure educational excellence, the State government will introduce English from Class 1st in all government schools from this academic session.
The Government of Himachal Pradesh has introduced “Dr. Yashwant Singh Parmar Vidyarthi Rin (Loan) Yojana” that offers education loans up to ₹20 lakh at a nominal interest rate of 1% to the students of the state.

New Lease Policy amendment:

Addressing fiscal concerns, the government has reduced the lease period for government land from 99 to 40 years.

New excise policy:

The ground breaking new excise policy yielded a substantial increase of ₹846 crore in revenue while auctioning liquor retail shops brought a remarkable 40 percent boost for the State.

Welfare of tribal communities:

For the welfare of tribal communities, ₹857 crore has been allocated under the Tribal Area Development Program for the fiscal year 2023-24, with ₹ 335 crore proposed in central schemes.

Him Unnati Yojana

The State government has started the “Him Unnati Yojana”, aimed at boosting production of milk, vegetables, fruits, and other cash crops through structured incentives.

Himachal Pradesh Him Ganga Yojana:

₹500 crore “Himachal Pradesh Him Ganga Yojana” is dedicated to developing milkbased rural economy, facilitating transportation of milk from farmers to Chilling Plants.

HPSHIVA:

“Himachal Pradesh Sub Tropical Horticulture, Irrigation and Value Addition Project (HPSHIVA)” has been conceptualized to increase income and strengthening climate resilience of the farm households in sub-tropical areas and to develop Himachal Pradesh as Fruit Bowl of India. ₹1292 crore HPSHIVA project aims to establish farms in 400 clusters, covering six thousand acres of land and benefiting 15 thousand farmers and gardeners in its first phase. The project includes provisions for solar fencing and irrigation facilities, fostering sustainable agricultural practices.

Ease of doing business

The government’s commitment to economic growth is evident in the establishment of a State Investment Bureau which will replace the old ‘single-window’ system to scale up the ease of doing business and to minimize delay in getting requisite approvals. At a recent investor meet in Shimla, the government unveiled 29 projects worth ₹ 8,468 crore, marking a significant stride towards creating job opportunities for 12,584 State youth.

Rajiv Gandhi Swarozgar Start-up Yojana:

The government has launched the ₹680 crore Rajiv Gandhi Swarozgar Start-up Yojana, fostering entrepreneurship. The first phase provides 50 per cent subsidy on the purchase of e-taxis.

MNREGA:

Under MNREGA, the State government has increased daily wages of labourers from ₹ 224 to ₹ 240 in general areas and from ₹ 280 to ₹294 in tribal areas.

Sarkar Gaon Ke Dwar

The State government’s unwavering dedication to its citizens is illuminated through the “Sarkar Gaon Ke Dwar” initiative, where Ministers and MLAs actively engage with communities, swiftly addressing their concerns.

Revenue Lok Adalats

The groundbreaking ‘Revenue Lok Adalats’ at Tehsil and Sub-Tehsil levels have successfully settled more than 6,500 partition and Mutation cases. These transformative endeavors underscore the government’s commitment to fostering connectivity and promptly resolving the grievances at the doorsteps of the people, marking a new era of responsive governance.

Dynamic and inclusive learning environment

Additionally, the government introduces cutting-edge programs like Drone Mechanics, Artificial Intelligence, and other New Age Courses in ITI and Polytechnic institutions. These initiatives usher in a transformative era in educational enrichment, showcasing the state government’s dedication to establishing a dynamic and inclusive learning environment.

Public health

In the realm of public health, a significant ₹100 crore is allocated for the pioneering initiation of Robotic Surgery across medical colleges. Transforming health institutes into Model Health Institutes and deploying six medical experts in each of the 50 constituencies prioritizes healthcare accessibility.

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