SHIMLA : Himachal Pradesh's economy is showing some "green shoots of recovery" in 2021-22 after it was hit severely by the Corona pandemic in 2020-21. The state expects real GDP growth of 2.7% in 2021-22 while the real GDP at constant prices is estimated to be Rs 124,400 Crore (Rs 1, 75,173 crore at current prices) in 2021-22, reveals HP Economic survey 2021-22, which was presented in the Vidhan Sabha by Chief Minister Jai Ram Thakur today.

Horticulture, Tourism and Hydropower are three economic drivers in Himachal Pradesh. But all the three were hit by the covid pandemic in 2020-21. The industrial sector and social sector show growth over the previous year (see chart). Though unemployment rate for the 2021-22 is not given, but survey says that unemployment rate decreased to 3.7 per cent in 2019-20 from 5.2 per cent in 2018-19.     

After showing a sharp 81 per cent decline in tourist arrivals in 2020, Himachal tourism shows 75.44 percent rise in December 2021,  survey says.

Besides this,  many crucial "grey areas of economy" such as  gigantic borrowings and debt trap that has moved past Rs 55000 crore and even farther,  remained far from clear. Chief Minister  is likely to address these in the Budget 2022-23 that he is presenting tomorrow in the Vidhan sabha. 

Survey shows that agriculture and livestock sector logged negative growth 8.6 per cent in 20-21, but the increase of production in horticulture sector, mainly apple has come as a big saviour for the sector logging a growth of 11.9 per cent in 2021-22.

The agriculture and allied sector contribute about 13.31% to the total gross state domestic product in 2020-2021. However, food grains, vegetable and fruits that the farmers produce are the “economic mainstay” of lakhs of families in the state.

The fruit production was 6.97 lakh tonne in 2021-22 up to December 2021 against 6.24 lakh tonnes in 2020-21.  

In 2021-22, apple production saw an increase of 1.21 lakh tonne to 6.02 lakh tonne from 4.81 lakh tonne produced in 2020-21 in the state. Apple accounts for about 85% of total fruit production during this year in Himachal.

Food grains grows marginally from 15.94 lakh MT in 2019-20 to 15.28 lakh MT in 2020-2021. So was the case with vegetables as well- 18.67 lakh MT in 2020-21 against 18.61 lakh MT in 2019-20. It expects a production of 16.70 lakh MT in 2021-22, survey says.  

Survey also presents performance of the schemes that the Jai Ram Thakur government has launched in the state.  As many as 4592 farmers took the benefit amounting ₹150.52 crore for solar, barbed wire and composite fencing under Chief Minister Farm  protection scheme. As many as 1,53,643 farmers covered under much-hyped Natural Farming Kushal kisan yojana took benefits worth ₹46.15 crore, says survey.

Even as horticulture minister Mahender Singh Thakur has  hyped Pushp Kranti yojana as a major game changer for the floriculturists in the lower region,   but economic survey says that just 1282 farmers covered under the scheme took benefits  amounting to Rs 27.98 crore in 2021.

Trends in industrial sector shows some signs of recovery mainly in the manufacturing sector that shows a growth of 11.3 percent in 2021-22 as against negative growth of 7.3 per cent in 2020-21  in the state.  The quarrying and mining sector still showed negative growth of 3.2 per cent indicating that the real estate, roads and buildings, bridges and engineering works have not picked up pace in the state to the desired level.

Though the industry consumes about 55 per cent of power, the biggest consumer and domestic consumes 27 per cent, but the survey does not mention trends in power consumption that would indicate growth of industrial sector in the state, say economists.

However the Gross value Added(GVA)   of this secondary sector has  increased to Rs 55,089 crore  in 2021-22 from Rs 49, 610 crore in 2020-21 in the state. Himachal has about 31, 217 micro, 1637 small, 240 medium, 48 large industrial units as on January 31, 2022. But survey does not give figure as to how many Himachalis are employed in these units.  

Then the survey talks about global investors’ meet organised in which 703 MoUs worth Rs 96, 721 crore were signed. First ground-breaking ceremony was organised in December 27, 2019 at Shimla in which 236 MoUs worth Rs 13, 488 crore were grounded. The second ground-breaking ceremony was organised on December 27 2021 at Mandi in which 287 MoUs with a proposed investment of ₹28, 197 crore were grounded. Direct-indirect employment to 80,000 persons is expected under these projects, survey says.

Under Mukhya Mantri swambalan yojna the youth in the age group of 18 to 45 years and women in the age group of 18 to 50 years were encouraged for self-employment. So far 4862 projects  worth Rs 860 crore have been sanctioned and  2593 units have been established, while the state gave ₹147 crore as grant.

Under the Chief Minister Start-up scheme, as many as 191 start-ups and 14 incubation centers worth Rs 11.35 crore have been benefited in the state.  

Talking about the steps to benefit the labour class, Economic survey says that minimum wages for unskilled category of workers have been increased from Rs 275 to ₹300 per day with from April 1, 2021. But it is MNREGA that generated 255.73 lakh  mandays, providing employment to 6,06,182 persons in the state, reveals survey.

Under Jal Jivan mission, out of 17.02 lakh households,  15.80 lack have been provided functional household tap connection up to December 2021.The government aims to achieve cent per cent target by 2022.  

The surveys further says Himachal has hydropower potential of 27, 336 MW, but it aims at harness 24, 569 MW leaving the rest to protect environment. But the survey is silent as to how many megawatt was tapped during the last four years.

As inflation increased moderately from 4.6 per cent in 2014 to 5.2 per cent in 2021.  All India   price index shows an inflation rate of 1.3% while the consumer price index combined for Himachal Pradesh was 6.0% during April to December 2021.

According to the economic survey,  per capita income of the state at current prices is estimated at Rs 2,01, 854 in 2021-22. The advance estimates says the gross value added in manufacturing sector will rise by 11.3% in 2021-22 against 7.3% in 2020- 21.

The contribution of the primary sector to the state economy  for the year 2021 as per the revised estimate is 13.61%, but survey does not say whether it is growing or shrinking over the years, . The secondary sector contributes 41.7% while tertiary sector is worth 44.68% (see chart).

As far as financial inclusion in concerned, as many as 2244 bank branches are functioning in the state as on 30 October 2021 and population per bank branch comes to 3059 against national average of 11,000. But the credit-deposit(C-D) ratio of the state is dismal 38.28%, which is much less than all-India C-D  ratio of 75.7 per cent, say the experts.

The banks have issued KCC cards 21.04 lakh farmers amounting to Rs 10659 Crore up to September 2021. Under Pradhan Mantri employment generation program banks have sanction ₹12.5 crore as margin money to the entrepreneurs of 469 units, under the urban livelihood mission banks disbursed loans of Rs 2.78 crore up to September 2021, survey says.

Economic survey presents a rosy picture of the tax collection in 2021-22- total taxes collection was Rs 6, 232.24 crore up to December 2021.

The governments says Himachal has over 19.30 lakh ration card holders, who get essential commodities through 5043 fair price shops in the state.

The survey says Himachal has road length of 40, 020 KM and as many as 10, 591 villages were connected with roads as on December 31,  2021.

To switch from fossil fuel transport to green transport, HRTC is running a fleet of 3023 buses out of which 75 are electric buses, 21 taxies and 50 are electric taxis in the state.  The state has a long way to go green in its transport.

On the education front, economic survey says that there are 10734 primary schools, 2022 middle schools, 930 high schools, 1882 senior scandal schools and 139 degree colleges functioning in the state. About 8 lakh students of government schools have  been benefited under Pathshala  scheme of  online mode of education during COVID-19. Under Atal Ashirwad yojana, as many as 207, 364 new visitor kits worth Rs 24.36 crore were distributed.

In the health care sector, Himachal achieved distinction of being the first state in the country to achieve cent per cent phase-I and Phase-II vaccination against global pandemic. There are 5.13 lakh families, which benefited under HIMCARE under which  2.9 lakh people were given free treatment at a cost of ₹198.19 crore. Under the Ayushman Bharat  over 4.78 lakh families are entitled to get cashless treatment, survey says.

Under the old age pension scheme and amount of ₹850 per month it’s been given to all the person of age group between 60-69 years, below ₹35,000 in the state add 70 years and above person is being given ₹1500 per month without any income criteria, says survey prepared by the HP state economic and statistics department.

Survey largely presents a broader picture of state of Himachal's economy and host of other schemes as well, but much depends on Chief Minister how he addresses the key economic issues in  the Budget 2022-23  that he would present in the Vidhan sabha on March 4 on Friday tomorrow and how the opposition Congress and CPIM take it exposing its pitfalls  and grey areas of the economy in days to come.  

(Kuldeep Chauhan, Editor HimbuMail)