Economy of Himachal Pradesh : An Overview
Introduction
Agriculture and processed food are the main sources of income for the people of Himachal Pradesh. A small section of the population is employed in the Army. Many households of the state are recognized by the money order scheme, wherein, they survive on the money that is being sent to them by their families working elsewhere. The state is famous for its production of apple and apple juice that has many takers all over the globe. It is quite difficult to look for a source of income in the hilly areas, which is why people shift to the slopes and temperate areas to work in the terraced farms and fruit gardens.
During 1948, when the first economic plan for Himachal Pradesh was chalked out, around 5.27 crore INR was set aside for the state’s infrastructure development (during the first 5-year plan). A majority of this sum was spent on developing transport network, as it was considered to be the need of the hour.
During 1952 and post that, many technological advancements were being introduced into the state in the field of agriculture to improve productivity to a great extent. Programmes for community development covered all the rural areas of the state. The state joined hands with Germany to bring about novel methods in agriculture in areas like Mandi and Kangra. Animal husbandry too witnessed some developments during this time. Some of the achievements that the state saw during this phase were construction of Palampur Agriculture University, state-of the art laboratories for testing soil types, innovative dairy farms and workshops for improving agriculture.
In terms of rate of transformation from one of the most rural states to one of the most technologically advanced states of the country, Himachal Pradesh ranks top on the list of Indian states. Today, Himachal stands at No.4 in the list of states with the highest per capita income in the country.
Himachal Pradesh has come a long way in terms of development in its infrastructure, agriculture Tourism system. The agriculture techniques and increased productivity have attracted the attention of foreign countries as well. It is one of the few states that have put their natural resources to best use. Being a predominantly hilly state, its impressive transport network has come in for a lot of appreciation. Its hydel resources are being preserved in a great way and today, among all the mountain-dominated states of the country, Himachal Pradesh has made its presence quite strongly.
Agriculture / Horticulture
Himachal Pradesh is known as the Apple State of India because it is the country’s largest producer of apples. Around 93% people of the state depend on agriculture for their daily bread and butter. Almost 50% of the net state domestic product is contributed by agriculture in Himachal Pradesh. Wheat, maize and rice are the top three crops being cultivated in the state. Mandi, Paonta Valley and Kangra are the areas where these crops are grown in large numbers. Barley is another important crop that is cultivated extensively in Shimla. Another important source of income for the farmers of the state is through fruit cultivation. There are exclusive traces of land in the state that are highly compatible for cultivating fruits. These prove to be a steadier source of income compared to the income received from the other crops. Around 300 crore INR is the annual income that the state earns through its fruits. Apples top the fruits production in the state. Currently, there are lots of initiatives going on to make the state an hub for cultivating specific kinds of crops like saffron, pistachio nuts, mushrooms, flowers, sarda melon, olives, hops and figs.
Agriculture contributes nearly about 45% to the net state domestic product. It is the main source of income as well as employment in Himachal. About 93% of the state population depend directly upon agriculture. The main cereals grown in the state are wheat, maize, rice and barley. Kangra, Mandi and Paonta valley of Sirmaur district (to some extent) are the major producers of the first three cereals, while barley is mostly cultivated in Shimla. Fruit cultivation has also proved to be an economic boon to the state. There are huge tracts of land suitable only for growing fruits. Fruit of all cultivation does not add to the problem of soil erosion and its employment potential is more than the conventional farming. The yield per acre in terms of income is also much higher. Apple produces the maximum income. Fruit growing in the state is fetching over Rs. 3 billion annually.
Tourism
Tourism in Himachal Pradesh is a highly growing and dynamic industry. It was reported that one new tourist visits the state every 2.5 seconds. All over the globe, tourism is an industry that is considered to have a very good scope. The number of tourists who have visited the state is soon to touch the magical figure of 1.5 billion. Around 11% of the population depends on this industry for their source of income. Around 10% of the global GDP comes from tourism.
Himachal Pradesh has been identified as one of the top tourist destinations of the country. The industry is being marketing heavily in the state, which is why the sector is growing rapidly every year in the state. The natural beauty that the state is blessed with is something that one cannot get to witness anywhere else in the country. The snow-capped Himalayan Mountain peaks, silent valleys, mystic charm about the air, chill climate, wonderful ambience, gregarious people and the state’s deep rooted values in tradition and culture make the state one of the most beautiful places in the world. The valleys that form part of the Shivalik Hills are visual treats for the tourists. The green canopy of the oak, pine, cedar and spruce trees coupled with the milky white color the snow caps of the peaks is a sight to behold indeed. During the 19th century when the British rulers entered India, they considered this place as their summer capital, which is when, tourism actually started to flourish in the state. Until then, the state was predominantly a pilgrimage destination.
Tourism and horticulture in the state contributed to about 8% of the state’s domestic product. The State Government has very big plans to improve the tourism sector in the state by a whopping 20% by 2020, which is why, it has been doing all the necessary groundwork by devising policies and implementing them in phases. It is seeking the backing and assistance from various civil and private sectors for achieving this target.
Industry
Himachal Pradesh has been witnessing a consistent growth in its industrial sector. The state of the sector of industries and services that stood at 1.1% and 5.9% respectively during 1950-51, grew to an impressive 5.6% and 12.4% respectively in 1967-68 and further- more to 9.4% and 19.8% in 1990-91 due to the various reforms developed by the state.
Manufacturing industry that stood at 11.51% during 2004-05 grew to a massive 15.94% during 2008-09. It was expected that this sector would form about 15.06% of the gross state domestic product. In what looks like a clear signal of growth, the state’ secondary and tertiary sectors have grown phenomenally to make up to around 39.24% and 41.07% of the gross state domestic product respectively. Ever since the start of the 20th century, the state has been witnessing consistent growth rates.
The state has the ample availability of electricity. Parwano, Barotiwala, Baddi, Paonta Sahib, Mehatpur, Shamshi, Nagrotu Bagwan, Bilaspur, Reckong Peo and Sansar Pur Tera are some of the industrial areas of the state at present. As the dust free climate of Himachal is extremely suitable for the setting up of electronic industries, many electronic complexes have been established at Solan, Mandi, Hamirpur, Shogi, Raga-Ka-Bagh, Chamba, Ambi, Taliwala and Keylong.
Moving one step further to its growth Baddi, Barotiwal & Nalagarh Industrial area have made its presence online with a domain name baddionline.com. And other Industrial Areas of Himachal Pradesh will be covered soon. In an effort to provide infrastructure support to entrepreneurs, the Himachal Pradesh government has developed 41 industrial areas and 15 industrial estates. Solan, Sirmour, Kangra and Una districts lead in terms of investments attracted. Other industries in the state that looks highly appealing for funding purposes are IT, engineering and pharmaceuticals. Biotechnology and IT especially have many rules and regulations governing each sector of the state. The skilled workforce strength in the state is quite high, therefore many industries that are knowledge based, thrive well in the state.
There is also huge potential waiting to be tapped in industries making use of partially skilled or non-skilled workforce as well. In spite of many industries coming up in the state, agriculture continues to be its main economy contributor.
There are various reform measures that contribute heavily to a state’s industrial growth and development. Some of the key measures are:
• Policy proactiveness - The growth of a particular industry in a state depends on the approach that its government takes towards a policy. Having a relaxed approach could attract more funding for a particular industry. If a particular State Government has offered many rule relaxations for constructing industries in its premises, it would naturally attract many key players in the market.
• Availability of natural resources - A state that has a very high supply of natural resources is a safe bet for starting industries. For example, the agriculture industry can thrive only in an area that has ample supply of water. Similarly a cement industry can thrive well only in an area that has a rich supply of limestone.
• Capability - Any industry can grow in a state that has enough workforces with reasonable qualification and capabilities, as employees are the backbones of industrial growth.
Himachal is one of those states in India which was rapidly transformed from the most backward part of the country to one of the most advanced states. At present Himachal ranks fourth in respect of per capita income among the states of the Indian Union.
Himachal education system is well established, its agriculture is enough for its self-sufficiency, its horticulture is highly impressive in the country and even in abroad, its road connectivity system has emerged as the best in the mountainous areas in India, the infrastructure for its industrial development are well laid out, its rich forest resources being augmented and above all, the increasing attention of the nation towards the exploitation of its hydel resources are the signs for its bright future. It has already become the ideal in respect of development for the hill areas of the country.