Himachal Pradesh has made tremendous progress among all hilly states in the past few decades. The economy of the state depends primarily on agriculture. However, the shift has been witnessed over the years from the primary towards the secondary and tertiary sectors.

1. GROWTH SCENARIO OF HIMACHAL
PRADESH ECONOMY
Presented by : Jyoti Chaudhary
PE-17009
PhD Scholar
Banaras Hindu University
Department of Agricultural Economics
Institute of Agricultural Sciences, BHU, Varanasi.

2. INTRODUCTION
• Himachal Pradesh referred to as Dev Bhumi or Land of Gods.
• Located in the northern region of India in the lap of Himalaya.
• After Independence, 30 princely states of the area were united and
Himachal Pradesh was formed on 15th April, 1948.
• On 25th January, 1971, Himachal Pradesh was made a full-fledged
State.
• As its borders, the state has Punjab on West and South-West, Jammu
& Kashmir to the North, Haryana to the South, Uttarakhand to the
South-East and China on the East.
• Being a sub-Himalayan state, Himachal Pradesh has a varied climate
that changes with altitude. The climate ranges from warm and sub-
humid tropical at low altitudes to cold and icy at high altitudes. There
are three main seasons: winter from October to February, summer
from March to June and rainy from July to September.

3. Particulars Himachal
Pradesh
India
Capital Shimla New Delhi
Geographical area (sq Km) 55,673 32,87,240
Administrative districts (No.) 12 719
Total population (million) 6.86 1210
Population density (Persons per sq 123 382
Male Population (million) 3.48 623.7
Female population (million) 3.38 586.5
Sex ratio (females per 1000 males) 971 940
Literacy rate (%) 82.8 74.04
Himachal Pradesh at a Glance
Source: Census 2011, GOI

4. HIMACHAL PRADESH AT GLANCE
Particulars Himachal
Pradesh
India
GSDP as a percentage of all
states’ GSDP
0.82 100.0
GSDP growth rate* (%) 9.6 10.8
Per capita GSDP (US$) 2585.61 1750.29
Himachal Pradesh’s Contribution to Indian Economy
(2016-17)
Physical Infrastructure in Himachal Pradesh
Particulars Himachal
Pradesh
India
Installed power
capacity (MW) (July
2018)
4046.81 365494.61
National highway
length(km) (February
2018)
2642 122,432
Airports (no.) 3 125
Industrial infrastructure
Operational PPP
projects No.(July
2018)
41 1529
Investments (US$ billion)
Particulars Himachal
Pradesh
India
Cumulative FDI equity inflows
between April 2000-June
2018
1.47 389.72

5. OVERVIEW OF INDIAN ECONOMY
• India's GDP has grown from Rs 2.7 lakh crore to
Rs 122 lakh crore in 70 years of independence.
• Indian Economy grown 7.1 percent in 2016-17 and
expected to grow to 6.5 percent in 2017-18.
• GDP at constant prices (2011-12), in 2016-17 is
estimated at Rs.121.96 lakh crore as against Rs.
113.86 lakh crore in 2015-16.
• At current prices GDP in 2016-17 is estimated at
Rs.152.54 lakh crore as against Rs.137.64 lakh
crore in 2015-16 shows an increase of 10.8
percent during the year.

6. • The per capita income at current prices is estimated at Rs.1,03,870 in 2016-17 as
against Rs. 94,731 for the previous year recording an increase of 9.6 percent.
• The per capita income in real terms (2011-12 prices) is estimated at Rs. 82,229 for
2016-17 as against Rs. 77,826 in 2015-16 registering an increase of 5.7 percent.

7. SHARE OF SECTORS IN GDP
Share
in GDP
> 60 %
12 %
15 %
8 %
5 %
Trade, hotels, transport and communication;
financing, insurance, real estate and business
services and community, social and personal
services
Agriculture, forestry
and fishing
Manufacturing
Mining, quarrying,
electricity, gas and
water supply
Construction
The most important and the fastest growing sector of Indian economy are services.

8. • Himachal Pradesh has emerged as a leading economy in the Country and is also a
leader in Hill Area Development, Agriculture & Horticulture revolution.
• Ideal destination for investment in Power and tourism sector.
• Another major part of Himachal Economy is Hydro electricity due to the abundance
of perennial rivers.
• Himachal as one of the classic examples of rapid transformation from the most
backward part of the country to one of its most advanced states.
• It stands at No. 4 in the list of states with the highest per capita income in the
country.
• The per capita income at current prices witnessed an increase of 9.1 percent as it
increased to Rs. 1,46,294 in 2016-17 from Rs.1,34,089 in 2015-16. and is
estimated at Rs. 1,58,462 in 2017-18.
OVERVIEW OF STATE ECONOMY

9. • In 2016-17, Himachal Pradesh’s Gross State Domestic Product at current prices, is estimated at
Rs. 1,24,236 crore as against Rs. 1,13,355 crore in 2015-16 (9.6 % increase).
• At constant prices (2011-12) in 2016-17 is estimated at RS. 1,02,954 crore as against Rs.
96,274 crore in 2015-16 registering a growth of 6.9 % as against the growth rate of 8.1
percent during the previous year.
• The increase in total State Domestic Product is mainly attributed to
• 18.1 % in community & personal services sectors
• 8.2 % increase in transport and trade
• 7.1 % in manufacturing sector
• 5.8 % in finance & real estate
• 5.4 % in construction
• 2.9 % increase in electricity, gas & water supply.
• Primary sector has shown a marginal decrease of 0.7 % (Due to decrease in apple production
by 40 % as compare to previous year)
HIMACHAL PRADESH’S GSDP

10. GROWTH IN THE POPULATION OVER
THE YEARS (1951-2011)
• The population of Himachal has
increased by 65.24 % during 1951 to
2011.
2386
2812
3460
4281
5171
6078
6865
0
1000
2000
3000
4000
5000
6000
7000
8000
1951 1961 1971 1981 1991 2001 2011
POPULATION('000)
17.87
23.04 23.71
20.41
28.43
19.9
21.51
24.8 24.66 23.87
21.54
17.7
1951-1961 1961-1971 1971-1981 1981-1991 1991-2001 2001-2011
HP India
Source: Census 2011, GOI

11. COMPARATIVE GROWTH RATE OF H.P. AND NATIONAL ECONOMY RECORDED DURING FIVE YEAR PLAN
PERIODS
Plan Period Average Annual Growth Rate of Economy At Constant Prices (%)
Himachal Pradesh All India
First Plan (1951-56) (+) 1.6 (+) 3.6
Second Plan (1956-61) (+) 4.4 (+) 4.1
Third Plan (1961-66) (+) 3.0 (+) 2.4
Fourth Plan (1969-74) (+) 3.0 (+) 4.1
Fifth Plan (1974-74) (+) 4.6 (+) 5.2
Sixth Plan (1980-85) (+) 3.0 (+) 5.3
Seventh Plan (1985-90) (+) 8.8 (+) 6.0
Eight Plan (1992-97) (+) 6.3 (+) 6.2
Ninth Plan (1997-02) (+) 6.4 (+) 5.6
Tenth Plan (2002-07) (+) 7.6 (+) 7.8
Eleventh Plan (2007-12) (+) 8.0 (+) 8.0
Twelfth Plan (2012-17) (+) 6.9 (+) 7.1
(2017-18) (+) 6.3 (+) 6.5
Source:- Economics Survey, 2017-18, Department of Economic and Statistics, Himachal Pradesh

12. MOVEMENT OF GROSS STATE DOMESTIC PRODUCT AND PER
CAPITA INCOME
Year
GSDP Per Capita Income
% change over the previous years (at
constant prices)
Constant price
(Rs. Crore)
Current price
(Rs. Crore)
Constant price
(Rs.)
Current price
(Rs.) GSDP Per capita income
1999-00 14112 14112 20806 20806 - -
2000-01 15004 15661 21824 22795 6.3 4.9
2001-02 15786 17148 22543 24608 5.2 3.3
2002-03 16585 18905 23234 26627 5.1 3.1
2003-04 17925 20721 24377 28333 8.1 4.9
2004-05 24077 24077 33348 33348 - -
2005-06 26107 27127 35806 36949 8.4 7.4
2006-07 28483 30281 38195 40393 9.1 6.7
2007-08 30917 33963 40143 43966 8.5 5.1
2008-09 33210 41483 41666 49903 7.4 3.8
2009-10 35897 48189 43492 58402 8.1 4.4
2010-11 39036 57452 46821 68297 8.7 7.7
2011-12 72720 72720 87721 87721 - -
2012-13 77384 82820 92672 99730 6.4 5.6
2013-14 82847 94764 98816 114095 7.1 6.6
2014-15 89095 104177 105774 124325 7.5 7
2015-16 96289 113667 113447 135621 8.1 7.3
2016-17 102792 124570 120530 147277 6.8 6.2
CAGR (%) 12.39 13.67 10.89 12.20
Source: Economic Survey, (various issues), Department of Economics and statistics, Himachal Pradesh

13. PER CENTAGE CONTRIBUTION OF SECTORAL STATE
DOMESTIC PRODUCT AT CURRENT PRICES
Sectors 1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2010-11 2016-17
Primary 71.01 63.14 58.56 50.35 35.1 25.90 21.73 16.01
Secondary 9.50 7.91 16.73 18.69 26.5 35.54 39.79 39.96
Tertiary 19.49 27.15 24.71 30.96 38.4 38.56 38.48 44.03

14. 71.01
63.14
58.56
50.35
35.1
25.9
21.73
16.01
9.5 7.91
16.73
18.69
26.5
35.54
39.79 39.96
19.49
27.15
24.71
30.96
38.4 38.56 38.48
44.03
0
10
20
30
40
50
60
70
80
1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2010-11 2016-17
Per cent contribution of sectors to GSDP at current prices
Primary Secondary Tertiary

15. PER CENT CONTRIBUTION OF GSDP
• The tertiary sector witnessed the fastest growth at a
CAGR of 13.47 per cent between 2011-12 and 2016-
17.
• Community and personal services (16.02 %) are the
main components of the tertiary sector followed by
finance and real estate (15.98 %)
• Agriculture retains a major share of the primary
sector.

16. EXPORT TRENDS
8.96 8.93
10.56
12.22
0
2
4
6
8
10
12
14
FY 15 FY 16 FY 17 FY 18
Merchandise Export from Himachal Pradesh (US $
Billion)
57%
7%
5%
4%
3%
3%
2%
19%
MAJOR COMMODITIES EXPORTED IN FY18
Drug, Formulations &
Biologicals
Cotton yarn
Man Made Yarn & Fabrics
Cotton Fabrics
Bulk Drugs
Paper & Paper Board
Drug, formulations and Biological accounts for a majority of the share in the
overall of the state and reached US$ 702.87 million in FY 18

17. PHYSICAL INFRASTRUCTURE : POWER
• Himachal Pradesh is naturally suited for hydropower generation and accounts for around
25.9 per cent of India’s total hydro power potential.
• Out of the 27,436 MW hydro power potential, 24,000 MW is harnessable.
• As per state budget 2018-19, 20,912 MW of this is already allocated under various sectors
and 182 MW of hydro power capacity addition is expected in 2018-19.
• Himachal Pradesh is one of the few states in India where power delivered to consumers is
entirely metered.
• As of July 2018, Himachal Pradesh had a total installed power generation capacity of
4,046.81 MW.
• Hydro power accounted for 2,910.48 MW of total installed power generation capacity,
followed by renewable power (861.97 MW) and thermal power (245.41 MW).

18. CONT..
2326.7
3584.9
3770.1
3986
4578.56 4463.56
3892.72
4038.68 4046.81
0
1000
2000
3000
4000
5000
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Installed power capacity (MW)
840
13332
5995
3237
4032
0
5000
10000
15000
Yamuna Satluj Beas Ravi Chenab
Assessed hydro power
potential (MW)

19. KEY SECTORS
 Agriculture and Allied Industries
 Tourism
Pharmaceuticals

20. AGRICULTURE AND ALLIED SECTORS
• Agriculture contributes nearly 45 per cent to the net state domestic product. It is the main
source of income as well as employment in Himachal.
• About 93 per cent of the state population depends directly upon agriculture.
• Major food crops in the state are rice, maize, wheat, barley, jowar, pulses, bajra and
potato.
• The four agro-climatic conditions in the state support cultivation of multiple crops,
vegetables and fruits around the year.
• During 2016-17 about 9.68 percent of state income has been contributed by agriculture
sector alone.
• The foodgrains production registered an increase of 6.8 percent in 2016-17 over 2015-16
• The yield for food grains is estimated at 2.09 metric tonnes in 2017-18. Horticulture
production in 2017-18 is estimated at 2,423 thousand metric tonnes, as per 1st advance
estimates.

21. 900.2 865.2
814.2 798.1 795.3 790.5 800.6 778.9 755.3 761.2 774.09 786.93
1439.8
1366.4
1112.2
1381.4 1421.1
1510.3 1480.7
1528.4
1607.88 1615
1745.02
1645.35
1990-91 1995-96 2000-01 2005-06 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18*
Area and production of foodgrains
area ('000 ha) prod('000 MT)
Source: Handbook of statistics on Indian states, Reserve Bank of India, 2017-18

22. • Fruit production was 5.00 lakh tonne in 2017-18 (up to Dec., 2017) against 6.12 lakh tonne
in 2016-17.
• Apple is the major horticultural crop, and constitutes about 85 % of total fruit production.
Bulk of the apple is produced in five districts viz. Shimla, Kullu, Mandi, Kinnaur and
Chamba.
• The production of apple decreased to 4.68 lakh MT in 2016-17 from 7.77 lakh MT in 2015-
16. During 2017-18 (up to Dec., 2017) 4.28 lakh tonne of apple were produced.
• To bring diversification in horticulture industry an area of 156.19 hectares has been brought
under flower cultivation upto December, 2017.
• The contribution of major livestock products during the year 2016-17
 1.32 million MT of milk
1,476 MT of wool
 95.8 million eggs
 4,460 MT of meat.

23. SECTORAL GSDP AGRICULTURE (RS. LAKH)
673402
814909
938019
816869
870987 868387
673402
742067
870435
789640
834961
740400
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1000000
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Current Prices constant price (2011-12)
The Sectoral GSDP for
agriculture increased at
compound annual
growth rate of 5.22 %
between 2011-12 and
2016-17

24. TOURISM
• Tourism is a major engine of economic growth, an
important source of revenue earnings and a generator
of employment of diverse kinds.
• Contribution of this sector to the state GDP is 6.6 %
approximately which is quite significant.
• The State Govt. has also developed appropriate
infrastructure for its development which includes
provision of public utility services, roads,
communication network, airports, transport facilities,
water supply and civic amenities etc.
• A significant rise has been noticed in the domestic as
well as foreign tourist inflow during last few years.
The tourists arrivals increased at compound annual
growth rate of 8.78 per cent between 2005 to 2017.
Year Indian Foreigners Total
2005 69.28 2.08 71.36
2006 76.72 2.81 79.53
2007 84.82 3.39 88.21
2008 93.73 3.77 97.5
2009 110.37 4.01 114.38
2010 128.12 4.54 132.66
2011 146.05 4.84 150.89
2012 156.46 5 161.46
2013 147.16 4.14 151.3
2014 159.25 3.9 163.15
2015 171.25 4.06 175.31
2016 179.98 4.53 184.51
2017 191.31 4.71 196.02
CAGR(%) 8.83 7.05 8.78
Tourist arrival (in Lakhs)

25. PHARMACEUTICALS
• 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.
• Baddi is one of the largest pharmaceutical hubs in Asia
and the world.
• Over 300 pharmaceutical companies, including
Ranbaxy, Dr Reddy’s, Morepen & Torrent
Pharmaceuticals, have set up operations in the state.
KEY PLAYERS

26. 3069090
3424001
3872473
4192842
4433767
4808473
3069090
3233072
3446535
3756104
4146017
4444324
0
1000000
2000000
3000000
4000000
5000000
6000000
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Current Prices constant price (2011-12)
CAGR = 9.40 %
SECTORAL GSDP (INDUSTRY) (RS. LAKH)

27. SECTORAL GSDP (MANUFACTURING) (RS. LAKH)
1799826
2063113
2355433
2598351
2731879
2952355
1799826
1924071
2052197
2233769
2526486
2697948
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Current Prices constant price (2011-12)
CAGR = 10.40 %

28. SECTORAL GSDP (CONSTRUCTION) (RS. LAKH)
638216
711075
775084
807374 825148
904496
638216
675541
723125
764415 774249
839573
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1000000
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Current Prices constant price (2011-12)
CAGR = 7.22 %

29. SECTORAL GSDP(BANKING AND INSURANCE)
(RS. LAKH)
287346
318473
332560
374766
408725
445510
287346
312147 304420
358302
381362
402718
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Current Prices constant price (2011-12)
CAGR = 9.17 %

30. SECTORAL GSDP (SERVICE) (RS. LAKH)
2708563
3153127
3565497
4043005
4540756
5094028
2708563
2935168
3111193
3427971
3771111
4177296
0
1000000
2000000
3000000
4000000
5000000
6000000
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Current Prices constant price (2011-12)
CAGR = 13.46 %

31. CONCLUSION
• The annual rate of growth of Himachal’s economy was highest during sixth plan (8.8 %) and during Ninth plan it was 6.2 %
as compare to 5.4 % of national economy.
• The per capita income of Himachal was higher than national average.
• Taking long term view, share of primary sector decreased significantly whereas it increased for secondary and tertiary
sector.
• Agriculture and transport were the priorities during earlier plans. The thrust gradually shifted to service sector.
• With suitable agro-climatic conditions, Himachal Pradesh has realised the importance of commercial crops, including off-
season vegetables, potatoes and ginger. The state is one of the largest producers of off season vegetables and exotic fruits
and the second largest producer of apples and almonds in the country.
• The food processing industry primarily focuses on the areas of traditional processing of agricultural and horticultural raw
materials.
• Presence of good food processing infrastructure has attracted major companies to invest in the state. There are 12 cold
chains and one dedicated food park in Himachal Pradesh.
• Sustainable Tourism Policy, 2013 was formulated for promoting sustainable tourism without damaging the ecology and
environment.

32. REFERENCES
• Economics Survey, 2017-18, Economic and Statistics Department, Himachal Pradesh
• Economic survey, 2017-18 , Ministry of Finance, Government of India.
• Handbook of statistics on Indian states, Reserve Bank of India, 2017-18
• www.ibef.org
• Himachal Pradesh Development Report, Planning Commission, Government of India