Industrial Profile of Himachal Pradesh
Himachal Pradesh is the land of lush green fields and vibrant entrepreneurial culture. It is one of the fastest growing States of the country. With congenial industrial climate, progressive and promotional steps taken by the Himachal Pradesh Government and economic liberalization adopted by the Government of India, the opportunities for
setting up MSME ventures have increased manifold in the State. In view of this, the need for providing first hand information pertaining to the development of micro, small &
medium enterprises to the entrepreneurs for taking investment decisions has become all the more important. Himachal Pradesh has emerged a leader in Hill Area Development.
Himachal is an ideal destination for investment in Power and Tourism sector. Responsive administration and conductive macro-economic conditions have induced a competitive environment in the economy of Himachal Pradesh.
Plans Period Himachal Pradesh Economy National Economy
First Plan 1951-56 (+) 1.6 (+) 3.6
Second Plan 1956-61 (+) 4.4 (+) 4.1
Third Plan 1961-66 (+) 3.0 (+) 2.4
Annual Plans 1966 to 1968-69 .... (+) 4.1
Fourth Plan 1969-74 (+) 3.0 (+) 3.4
Fifth Plan 1974-78 (+) 4.6 (+) 5.2
Annual Plans 1978-79 to 1979-80 (-) 3.6 (+) 0.2
Sixth Plan 1980-85 (+) 3.0 (+) 5.3
Seventh Plan 1985-90 (+) 8.8 (+) 6.0
Annual Plan 1990-91 (+) 3.9 (+) 5.4
Annual Plan 1991-9 (+) 0.4 (+) 0.8
Eighth 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
The economic growth in the State is predominantly governed by agriculture and its allied activity which has witnessed not much fluctuationduring nineties as the growth rate remained more or less stable. The decade witnessed an average annual growth rate of 5.7 percent, which is at par with national level. The economy has shown a shift from agriculture sector to industries and services as the percentage contribution of agriculture and allied sectors in total State Domestic Product has declined from 57.9 percent in
1950-51 to 55.5 percent in 1967-68, 26.5 percent in 1990-91 and to 14.42 percent in 2012-13. The share of industries and services sectors respectively has increased from 1.1 & 5.9 percent in 1950-51 to 5.6 and 12.4 percent in 1967-68, 9.4 & 19.8 percent in 1990-91 and to 18.23 and 41.93 percent in 2012-13. However, the contribution of other remaining sectors showed a favorable shift i.e. from 35.1 percent in 1950-51 to 39.84 percent in 2012-13. The declining share of agriculture sector do not, however, affect the importance of this sector in the State economic growth still is being determined by the trend in agriculture and horticulture production. It is the major contributor to the total domestic product and has overall impact. Due to lack of irrigation facilities our agricultural production to a large extent still depends on timely rainfall and weather conditions. High priority has been accorded to this sector by the Government .
Secrotal Contribution :
The sectoral analysis reveals that during 2012-13, the percentage contribution of Primary sectors to total G.S.D.P. of the State is 19.72 percent, Secondary Sector 38.35 percent, followed by Community and Personal Services 18.46 percent, Transport, Communications and Trade 15.17 per cent and Finance and Real Estate 8.30 per cent.
Growth of micro and small scale Industeries :
At the time of independence, Himachal Pradesh was predominantly an agrarian economy. Almost all other items of common use were imported. During the nineties, the growth rate remained more or less stable. The decade showed an average annual growth rate of 5.7 percent, which is at par with the national level. The pace of industrial development has picked up after the Grant of special package of incentive by Central govt. for setting up of Industries in the State which was notified on 07.01.2003 together with the package of incentives provided by the State Govt. in the industrial policy & incentive. This has resulted in high investment in both MSEs and Medium & Large Scale sector in the State. Maximum number of units have been registered in district Kangra which accounted for 23.07% of the total units followed by district Solan and Mandi which accounted for 13.35% and 10.14% respectively of the total registered units. But the growths of registered industries in the state during the last three years have been recorded more in district Solan followed by district Sirmour and Una respectively. In the State least numbers of units have been registered in district Kinnaur and Lahaul & Spiti. In terms of investment, maximum amount of investment have been made in district Solan with 62.03% of the total investment followed by district Sirmour and Una with 17.90% and 7.31% of the total investment while in terms of employment also district Solan has became the largest employment provider district of the state with 31.05% of the total employment followed by district Kangra and Sirmour. Further considerable numbers of chemical, mechanical and electrical & electronics industries have come up in the State after the implementation of industrial package given by the Central Government to the State.
Growth of medium and large scale Industeries :
Industrial progress is one of the most important indicators of the economic development of a region. The industrial development, in turn, largely depends, on the large and medium scale industry due to its large employment potential, higher levels of industrial efficiency and ancillary spin off. Industrialization in Himachal Pradesh, where there are severe topographical, geographical and socio-economic constraints, largely depends on infrastructure development. With the gradual increase in investment in infrastructural facilities, through successive five year plans and formulation of a well defined industrial policy, Himachal Pradesh has been able to offset the location disadvantages to some extent. As a result considerable numbers of small, medium and large scale units are coming up in the state. As on 31.12.2014, 502 Medium & Large Scale enterprises have been reported in Himachal Pradesh with an investment of 11300.62 Crores and providing employment to 60794 persons.
Industial development and Infrastructure development :
To provide services and facilities to the existing and prospective entrepreneurs District industries Centers (DIC’s) have been functioning in all districts of the state. Besides, 5 Single Window Clearance Agencies have been setup in industrial areas of Parwanoo, Baddi, Paonta Sahib, Kala Amb & Golthai which provide services and facilities required by the industries under the single roof. With a view to provide umbrella support to existing and new ventures, the state government has set up a State Level Single Window
Clearance and Monitoring Authority (SLSWC&MA) . At present the state has about 41 industrial areas established at Bilaspur, Gwalthai, Garnota, Hatli, Hamirpur, Nadaun, Nagrota Bagwan, Sansarpur Terrace, Nagri, Dhaliara, Bain Attarian, Badhal, Raja Ka-Bag, Nargala Jawali, Shamshi, Reckong Peo, Sauli Khad (Mandi), Ratti, Bhambla,
Maigal, Shogi, Maindli, Jais, Jubber Hatti, Paonta Sahib, Kala Amb, Baddi, Barotiwala , Chambaghat, EPIP Baddi(Phase I&II), Banalgi, Mamlig, Katha
Bhatoli, Mehatpur , Amb, Tahliwala, Gagret, Jeetpur Bheri and Basal. Besides this 15 industrial estate have been developed with the infrastructure facilities at Sultanpur, Parel, Shivenagari (Holi), Kangra, Dhera , Jawali, keylong, Saigloo, Pali, Pandranu, Raighat, Sunda Bhonda, Parwanoo, Chambaghat and Dharmpur. In addition to this project of an industrial Growth Center is being implemented by the state Govt. with the assistance of Central Government at Sansarpur Terrace Phase.-I, Bain Attarian, Phase-II, Raja- Ka –Bag, Phase-III, Gwalthai Phase.IV and Banalgi Phase. V. To attract investment in the state and to ensure easy availability of land to the prospective entrepreneurs in various parts of the state, the department of industries has constituted a land Bank comprising of government and private land which are available for setting up industries. The department is providing escort and facilitation services in case the entrepreneurs are willing to purchase private land.
Impact of Industrial package :
Since the implementation of industrial package announced by central Govt. in respect of Himachal Pradesh in January 2003 and recently annouced new industrial package to state soon will be provided to hill state, industrial activities in general and particularly in district Solan, Sirmour and Una has picked up in the state as a result of which large number of units particularly in the line of Pharmaceuticals electrical/ electronics, Hosiery & Textile and herbal based products have came up in the state. The impact of this package has also been noticed in case of Medium and Large scale industries. Major Industrial houses ACC, Gujrat Ambuja Cement, Birla, Dabar, Verdhmaan, Mohan Meakin, Eicher , HFCL, Godrej, Wipro , Himdustan Lever Ltd., Cipla Ltd., Ajanta India Ltd.., Jhonson and Jhonson , Cadbery , Colgate Pamolive, Dr. Reddy’s laboratories Cadila healthcare and franchises of various electrical appliances/sports shoes manufacturers such as LG, Bajaj, Phlips, Phoenix , Maharaja, Kapkon, Electronics, Revere Pentland, Lee Copper and Action etc.have already started Commercial production in the state. Due to the increase in industrial activities unemployment problem which the state was facing in the past has also been solved to a great extent as the state Govt. has put a condition on the new industries to provide 70% employment to the Himachali’s.
Availability of Industrial land :
Availability of Industrial land is an important contribution that a Government can provide for industrial development. Himachal Pradesh got full statehood in 1971. Thereafter, the stress was laid on infrastructure development and industrial areas were developed at Parwanoo, Barotiwala, Bilaspur, Shamshi, Nagrota Bagwan, Mehatpur & Chambaghat, and the plots have been allotted in these industrial accommodations to cater the dire need of land for industrialization. Industrial focal points are established at many Industrial Centres of Himachal Pradesh, rural industrial estates are also established in the State to give impetus to rural industrialization and to remove regional imbalances.
Institutional Support :
Central Government as well as State Govt. has established a number of institutions for the promotion of industries whose decisions and functions influences industrial activities in the country/region/State.
1. Directorate of industries Bemloe, Himachal Pradesh :
- Registration of MSEs and recommendation of medium and large scaleindustries to appropriate authority.
- Technical consultancy / general consultancy.
- Financial assistance, recommendation of cases to financial Institutions/ Banks for loan under PMEGP Scheme.
- Computation of statistics
- Liaison with and feed back to Central Govt.
- Providing all incentives to industries given by both Central and State Govt.
2. HP small industries coorporation HIMRUS building Shimla :
- Plan and develop Industrial Estate and Industrial Areas.
- Participation in equity of medium and large units.
3. HP state small industries and corporation , Kishore Bhawan :
- Supply of scarce raw materials through raw materials deports. Machinery on hire purchase
- Assistance in exports Marketing assistance
4. HP electronics development cooperation Shimla:
- Promotion of industries in the field of Electronic Sector including in jointand public sector etc.
5 HP Khadi and village Industries Board, Chaura Maidan Shimla :
- Development of Khadi & Village Industries in the State.
- Provides financial assistance at concessional rate.
6. HP Handloom and Handicraft coorporation, Kasumpti Shimla :
- Promote and develop handloom and handicraft products.
- Provides training in handlooms and handicraft.
- Assist Entrepreneurs in setting up units in their product.
- Render marketing assistance by selling handloom and handicrafts products of local entrepreneurs through show rooms.
7. HP state financial coorpration, HIMRUS Building, Shimla :
- Provides term loan as well as working capital loan to small and medium scale units under its various schemes.
- Provides loan for expansion and Modernization of existing units.
8. Role and functionn of MSME development organisation :
MSME Development Organization, formally known as Small Industries Development Organization (SIDO) which is an apex body and nodal agency for formulating co-ordinating and monitoring the policies and programmes for promotion and development of MSMEs in the country was established in 1954. on the recommendation of an international Planning team sponsored by Ford foundation. It maintains close liaison with Central Ministries, Planning Commission, State Govt., Financial institutions and other agencies concerned with the development of MSMEs. It also provides comprehensive range of facilities, training, testing, tooling and common facilities etc. to small scale units .
In order to develop industrialization, a number of new policies were adopted by the state government like providing various incentives such as cheaper power, twenty five percent subsidy besides easier credit facilities through the State Finance Corporation and the nationalised banks for establishing new industries. Also, land was made available on 99 years low rate lease basis and new industries were exempted from sales or purchase tax. Concessions were also given on charges for transportation of raw materials from the nearest railhead outside the state beside provision of other marginal benefits. These concessions helped the state in establishing industrial houses.