INTRODUCTION
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 south-west, Haryana on the south, Uttar Pradesh on the south-east and China on the east.
At current prices, Himachal Pradesh’s gross state domestic product (GSDP) is estimated at Rs. 1,72,174 crore (US$ 23.58 billion) in FY22, an increase of 3% YoY. The state’s GSDP is estimated to increase at a CAGR of 7.06% between 2015-16 and 2021-22. Tertiary sector witnessed the fastest growth at a CAGR of 10.76% between 2011-12 and 2020-21.
Total exports from Himachal Pradesh stood at US$ 1,392.91 million in 2019-20. In FY21, exports from Himachal Pradesh stood at US$ 1,661.89 million.
As of April 2021, Himachal Pradesh had a total installed power generation capacity of 4,155.13 MW, comprising 1,626.39 MW under private utilities, 1,062.21 MW (state utilities) and 1,466.53 MW (central utilities). Himachal Pradesh has immense potential for hydropower as it is naturally blessed with abundant streams and rivers flowing down from towering mountains.
In November 2020, the Union Cabinet approved a proposal for an expenditure of Rs. 1,810 crore (US$ 245.41 million) for the 210 MW Luhri Stage-I hydropower project in Himachal Pradesh on the Satluj River. 758.20 million units of electricity annually will be generated by this project. The project will help create ~2,000 direct and indirect jobs and will contribute to the state’s overall socioeconomic growth.
The State Government of Himachal Pradesh offers a wide range of policy and fiscal incentives for businesses under the Industrial Policy, 2017. The state has also undertaken other policies such as Tourism Policy 2005 and IT Policy 2001 for upgradation of these sectors in the state. Himachal Pradesh has announced a Revised Solar Policy 2016 under which it plans to establish 700 MW of solar photovoltaic cell capacity.
Under State Budget 2020-21, the highest increase in allocations was observed in Water Supply, Sanitation, Housing and Urban Development at 33% of the overall budget.
According to the Department for Promotion of Industry and Internal Trade (DPIIT), the cumulative FDI inflows in Himachal Pradesh were valued at US$ 22.83 million between October 2019 and March 2021.
KEY SECTORS
- Agriculture is the main occupation and the major source of employment in the state, as 89.96% of the population lives in rural areas. With suitable agro-climatic conditions, Himachal Pradesh has realised the importance of commercial crops, including off-season vegetables, potatoes and ginger. To increase production of foodgrains, emphasis has been laid on distribution of seeds of high yielding varieties to the farmers. During 2020-21, 1,340 hectares of additional area was envisaged to bring under fruit plants against which 2,589 hectares of area has already been brought under plantation.
- Himachal Pradesh is one of the fastest-growing regions in the pharmaceutical industry in India, driven by incentives announced by the state Government in its Industrial Policy, 2004. In FY20, exports of drug formulations and biologicals from the state stood at US$ 822.0 million and have reached US$ 814.39 million in FY21.
- The tourism sector of Himachal Pradesh contributes 7% to the state GDP. Domestic tourist inflow in the state reached 16.83 million in 2019, while foreign tourist arrivals reached 383,000. As of December 2019, there were 3,679 registered hotels in the state. In November 2020, Fortune Hotels has announced fourth alliance in the state with the opening of its maiden property in Dalhousie, Himachal Pradesh. A significant rise was noticed in the domestic as well as foreign tourist inflow during last few years but due to COVID-19 there is sharp decrease of 81% in tourist arrival up to December 2020.