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 to be Rs. 1.92 trillion (US$ 24.84 billion) in 2022-23. The state’s GSDP (in Rs.) increased at a CAGR of 7.70% between 2015-16 and 2022-23. The 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$ 1,940.34 million in FY22 (until February 2022).
As of March 2022, Himachal Pradesh had a total installed power generation capacity of 4,532 MW, comprising 2,003.26 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 May 2022, the Himachal Pradesh government announced plans to allot 27 hydro power projects in the state's Chamba, Kangra, Lahaul-Spiti, Kullu, Shimla, and Kinnaur districts, with a combined tentative generation capacity of 722.4 MW. Proposals from 'eligible bidders' have been invited for the implementation of these projects in the private sector on a Build, Own, Operate, and Transfer (BOOT) basis.
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.
Himachal Pradesh will have the world’s longest and highest tunnel by 2025, which will connect Zanskar Valley in Ladakh to Lahaul in Himachal Pradesh, and will be 4.25 km in length.
According to the Department for Promotion of Industry and Internal Trade (DPIIT), the cumulative FDI inflows in Himachal Pradesh were valued at US$ 160.74 million between October 2019-December 2021.
Key Sectors
- In July 2021, Sonalika Group invested Rs. 200 crores (US$ 26.93 million) in Himachal Pradesh to build India's largest harvester manufacturing facility.
- Amidst the current rabi season in June 2021, Himachal Pradesh procured a record 1,00,657 quintals of wheat.
- 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.
- In March 2022, the Central Government approved Rs. 108 crore (US$ 13.95 million) for the Integrated Digital Agriculture Platform in Himachal Pradesh, which will increase in-house capability in supplying farmers with information and communication technologies (ICT)-based services, saving administrative time and enhancing efficiency.
- 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 FY22 (till February 2022), exports of drug formulations and biologicals from the state stood at US$ 975.08 million.
- 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 April 2022, the Ministry of Civil Aviation and the Himachal Pradesh government signed an MoU (Memorandum of Understanding) for the development of a Greenfield Airport in Nagchala, located in the district of Mandi in Himachal Pradesh. The project is estimated to cost around Rs. 900 crore (US$ 116.24 million), excluding the cost of land.
- In April 2022, National Highways Logistics Management Limited (NHLML) and the Himachal Pradesh government signed a memorandum of understanding (MoU) on for seven ropeway projects in the state under the Parvatmala Yojna at a total cost of Rs. 3,232 crore (US$ 417.44 million). The project will cover a total length of 57.1 km.
FACTFILE
Capital
ShimlaGeographical Area (sq km)
55,673State Language
Hindi and PahariLiteracy Rate
82.8 per centKey Industries:
Textiles
Pharmaceuticals
Food procurement and processing
IT and ITeS
Electronics
Light engineering
Cement
Tourism
Hydropower
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