Economy of Himachal Pradesh

Economy of Himachal Pradesh
GDP1.69 lakh crore (US$24 billion) (2019-20 est.)[1]
GDP rank22nd
GDP growth
8.1% (2017-18)[1]
GDP per capita
186,778 (US$2,600) (2017-18)[1]
GDP by sector
Agriculture 15%
Industry 42%
Services 43% (2017-18)[1]
Public finances
34% of GSDP (2019-20 est.)[1]
-7,352 crore (US$−1.0 billion) (4.4% of GSDP) (2019-20 est.)
Revenues35,024 crore (US$4.9 billion) (2019-20 est.)[1]
Expenses44,388 crore (US$6.2 billion) (2019-20 est.)[1]
Gross State Domestic Product at Current Prices

figures in crores of Indian Rupees

Year Gross State Domestic Product
1980 7,940
1985 13,720
1990 28,150
1995 66,980
2000 135,900

The era of economic planning started in Himachal Pradesh in 1948. The first five-year plan allocated about Rs. 52.7 million to Himachal. More than 50% of this expenditure was spent on transport facilities since it was felt that without proper it, the process of planning and development couldn't be carried.

The community development programme which was launched in 1952 in Himachal, in certain selected areas was later extended to the entire rural Himachal. In Mandi and Kangra, package programmes were undertaken in collaboration with the West Germany for popularising modern techniques of cultivation among the farmers. Suitable agricultural machinery and animal husbandry were introduced in these areas. Well equipped soil testing laboratories, dairy farms and agricultural workshops were set up at various centres, besides an Agriculture University at Palampur.

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.[2] It has already become the ideal in respect of development for the hill areas of the country.


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. Special efforts are being made to promote cultivation of crops like olives, figs, hops, mushrooms, flowers, pistachio nuts, sarda melon and saffron. The state has also earned the name of the Apple State of India.[3]


Ecology has been given importance in the state during the last few years. Industries becoming the cause of water or air pollution are not encouraged. Every industrial project has to be passed by the clearance of the Environment Protection Organization before its establishment. Himachal is facing a number of difficulties in the advancement of industries. Lack of means of dependable transport and poor accessibility was one of the major drawbacks. Other problems faced by the state were the poor mineral resources, non-availability of infrastructure and communication facilities, shortage of capital and lack of modern skills. The only plus point of the state was 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.[4] Moving one step further to its growth Baddi, Barotiwal & Nalagarh Industrial area have made its presence online with a domain name And other Industrial Areas of Himachal Pradesh will be covered soon.[5]


  1. ^ a b c d e f g "Himachal Pradesh Budget Analysis 2019-20" (PDF). PRS Legislative Research. Retrieved 15 February 2019.
  2. ^ Economy of Himachal @ webindia123
  3. ^ Economy of Himachal by Agriculture @ Suni System (P) Ltd. Retrieved on- 2007-06-27
  4. ^ Industry Suni system (P) Ltd. Retrieved on- 2007-06-27
  5. ^ Baddi, Barotiwala Nalagarh Business Directory