Shimla: Chief Minister Jai Ram Thakur presented the Himachal Pradesh Economic Survey 2020-21 in the Vidhan Sabha today. This document has been prepared by the Economic & Statistics Department, Himachal Pradesh.
Highlights of Himachal Pradesh Economic Survey 2020-21
Himachal’s Economic Performance in 2020-21
At the State level, the Gross State Domestic State Product at current prices (Nominal GSDP), is estimated to be Rs.1,62,816 crore in 2019-20 as against Rs. 1,49,442 crore in 2018-19 showing a growth rate of 8.9 percent during the year.
Due to COVID-19 impact, as per first advance estimates, Himachal’s GSDP for fiscal 2020-21 is estimated to contract by 6.2 per cent.
Per Capita Income in Himachal Pradesh at current prices, for the year, 2019-20 is estimated to be `1,90,407 as against `1,76,460 for the year 2018-19; that is a growth of 7.9 per cent as compared to 6.6 per cent during 2018-19. Per Capita Income at current prices is estimated to drop by 3.7 per cent to `1,83,286 for fiscal year 2020-21.
Agriculture and Allied Sectors
The Agriculture & livestock sector registered a positive growth of 18.3 per cent in 2019-20 at constant (2011-12) prices with a Gross Value Added (GVA) of Rs. 10,583 crore as compared to Rs. 8,949 crore for 2018-19. However, during 2020-21 a contraction of 3.1 per cent has resulted due to a decrease of 43 per cent in horticulture production. The share of Agriculture and allied sectors a key sector that supports 60 per cent of the population in Gross Value Added (GVA) of the State at current prices has declined from 15.89 per cent in 2015-16 to 13.62 per cent in 2020-21. The share of agriculture and allied sectors in the total GVA of the State has been declining on account of relatively higher growth performance of non-agricultural sectors due to structural changes taking place in the economy and is in line with national and international trends.
Tourism sector did well in 2019 and witnessed a 4.63 per cent growth in both foreign and domestic tourist arrivals as compared to 2018 where negative growth of 16.08 per cent had been witnessed. One of the hardest hit sectors by the Covid-19 pandemic was tourism; it saw a contraction of 81.33 per cent in foreign and domestic tourist arrivals in 2020. Trade, Hotel and Restaurant sector showed a contraction of 9.2 per cent during 2020-21 as against a growth of 4.6 per cent in 2019-20. Transport by other means, namely, road transport (mechanised and non-mechanised), water transport, air transport and services incidental to transport, too showed a negative growth of 28 per cent during 2020-21 as against 5.6 per cent growth during 2018-19.
Himachal economy suffered serious effects on approximately all of its sectors, ranging from acute to minor. The economy received two reinforcing shocks on both demand and supply. The largest shocks are witnessed in transport, mining and quarrying, forestry and, in logging and construction. Tourism plays an important role in revenue generation and livelihood of people of the State; this was hit the worst due to COVID-19 lockdown. State Government played a pro-active role and took many steps to mitigate the COVID-19 effect.
Himachal has an estimated hydro power potential of 27,436 MW out of which 24,000 MW has been assessed as harnessable while the Government has decided to forgo the rest to safeguard the environment and to maintain ecological balance and protect social concerns. Industries sector has the highest consumption of power (58 per cent of total power consumption) followed by domestic sector (24 per cent) in the State.
Trends in the Industrial Sector
Manufacturing sector showed a contraction of 14.2 per cent during 2020-21 as against a positive growth rate of 0.3 per cent in 2019-20. The Mining and Quarrying sector showed a negative growth of 18.4 per cent during 2020-21 as against 4.3 per cent growth in 2018-19. As per the estimates for 2019-20 at constant (2011-12) prices, the GVA of this secondary sector is estimated at `53,498 crore against `53,456 crore in 2018-19. The contribution of Manufacturing Sector in Gross State Value Addition (GSVA) at Current Prices increased from 28.94 per cent in 2016-17 to 29.18 per cent in 2019-20 but is expected to decrease by 26.94 per cent in 2020-21. Mining & Quarrying Sector GSVA decreased from 0.64 per cent in the year 2016-17 to 0.25 per cent in 2020-21. Construction sector, contracted by 11.5 per cent in 2020-21 as against 3.1 per cent growth in 2019-20. State Government had taken several initiatives including Incentives for Investors, such as facilitating Ease of Doing Business, to attract investment. There is presence of more than 28,000 enterprises. Micro, Small & Medium Enterprises (MSME) comprising 99 per cent industrial sector. 93 per cent of total employment generation of industrial sector is from MSME sector. The State has annual exports worth `10,000 crore to more than 60 countries.
Current Trends in Inflation
In Himachal Pradesh, inflation has been moderate since 2014, Consumer Price Index-combined (CPI-C) inflation was 4.4 per cent in 2015-16 and 3.5 per cent in 2019-20. In current financial year, during the months of April-December, 2020, CPI-C was 5.3 per cent as compared to 2.5 per cent for the same period in 2019-20. In current Financial Year (2020-21), during April-December 2020, CPI-Rural and CPI-Urban indices were 4.8 and 7.6 per cent, respectively, as compared to 2.0 and 4.7per cent in the corresponding period of 2019.
Trends in Expenditure on Social Services
Since March 2020, most schools have been closed due to the COVID-19 restrictions. To meet this challenge, Government has implemented several initiatives to make education accessible to children during this pandemic. COVID-19 has demonstrated the importance of investing and strengthening public health system. Himachal has made significant and notable progress in this direction over the last five decades. The COVID-19 pandemic put the health infrastructure of Himachal Pradesh to a great test. The pandemic brought forth the inherent strengths of the medical fraternity in effectively managing the spread of the disease. As of 19 February, 2021, a total of 58,344 COVID positive cases were reported in Himachal Pradesh. Recovery rate at 97.8 per cent is high, but sadly, 981 lives were lost. To combat this pandemic, Himachal has so far administered 1,58,939 vaccine doses.
Himachal has seen significant increase in expenditure on social Services. For this sector, the expenditure by the State, as a proportion of GSDP, increased to 10.89 per cent from 7.68 per cent, during the period 2014-15 to 2020-21. Expenditure on education, increased from 4.12 per cent in 2014-15 to 5.31 per cent in 2020-21, and in health from 1.25 per cent to 1.93 per cent in the same period. The share of expenditure on social services out of total budgetary expenditure has increased to 34.68 per cent in 2020-21, from 25.73 per cent in 2014-15.
As per budget estimates, the revenue receipts of the Government for the year 2020-21 are estimated to be 24.56 per cent of the GSDP as against 19.86 per cent in 2019-20. Similarly, the tax revenue for the year 2020-21 is estimated to be 9.81per cent of GSDP as compared to 7.79 per cent in 2019-20. Non-tax revenue shows a marginal increase to1.54 per cent of the GSDP in 2020-21 as compared to 1.46 per cent during 2019-20. Fiscal deficit is estimated to be 4.65 per cent of the GSDP in 2020-21 as compared to 6.53 per cent in 2019-20. From 2015-16 to 2020-21, the Revenue receipts as percentage to GSDP increased from 20.52 per cent to 24.56 per cent whereas for the same period the revenue expenditure as percentage of GSDP increased from 19.52 per cent to 25.00 per cent. Capital expenditure as percentage of GSDP increased to 4.00 per cent in 2020-21 against 2.51per cent in 2015-16.
| Also read: Himachal Pradesh Economic Survey 2019-2020
Sustainable Development Goals
Himachal Pradesh has been progressing very well in the achievement of SDGs and achieved 1st rank along with Kerala during the SDG index report 2018-19 whereas, in SDG India Index 2.0, 2019-20 report the State held the 2nd rank in the country. The State has taken several steps for integration of the SDGs into budgetary and planning process. The State has shortlisted 138 key indicators and targets for monitoring progress on SDGs, out of which 12 have been achieved, 38 are to be achieved by 2022 and 87 are planned to be achieved by 2030.
Himachal Pradesh Economic Survey 2020-21 highlights the Periodic Labour Force Survey (PLFS) Report for 2018-19. This shows that Labour Force Participation Rate has increased from 49.1 per cent in 2017-18 to 52.8 per cent in 2018-19. A striking feature of the latest PLFS Report 2018-19 is a considerable increase in female workforce participation rate in the State from 37.9 per cent in 2017-18 to 44.6 per cent in 2018-19. Overall workforce participation rate also increased from 46.4 per cent 2017-18 to 50.1 per cent in 2018-19. The unemployment rate in the State declined from 5.5 per cent in 2017-18 to 5.1 per cent in 2018-19.