Highlights of the Economy of Himachal Pradesh (2024-25)

Based on the Economic Survey 2024-25, here are the key highlights of the economy of Himachal Pradesh:

• Gross State Domestic Product (GSDP): The GSDP at current prices is estimated to be ₹2,32,185 crore in FY2024-25, showing a growth rate of 10.2% over FY2023-24. The real GSDP (at constant 2011-12 prices) is estimated at ₹1,46,553 crore for FY2024-25, with a growth rate of 6.7%.  
• Per Capita Income (PCI): The PCI at current prices is estimated at ₹2,57,212 for FY2024-25, an increase of 9.6% from FY2023-24. The state’s PCI is higher than the All India figure.  
• Sectoral Contribution: The tertiary (services) sector is the largest contributor to the state’s Gross State Value Added (GSVA), accounting for 45.3% at current prices in FY2024-25, followed by the secondary sector (39.5%) and the primary sector (15.2%).  
• Sectoral Growth: In terms of growth at constant prices for FY2024-25, the secondary sector is expected to grow at 8.1%, the tertiary sector at 5.9%, and the primary sector at 3.2%.  
• Shift in Economy: The state’s economy has transitioned from being primarily dominated by the primary sector to having more balanced contributions from the service and manufacturing sectors to the GSDP. However, the primary sector still employs a significant portion of the population (53.98% in 2023-24).  
• Industrial Development: Himachal Pradesh has made significant advancements in industrial development, particularly in pharmaceuticals, textiles, and food processing. The state is a major hub for pharmaceutical manufacturing. Initiatives like the Bulk Drug Park and efforts to improve the ease of doing business are aimed at attracting further investment.  
• Tourism: Tourism is a vital sector for the state’s economy, contributing to job creation and income generation. Tourist arrivals are increasing, nearing pre-pandemic levels. The government is focusing on sustainable tourism practices and developing infrastructure like heliports and electric vehicle charging stations.  
• Infrastructure: The state is prioritizing the development of roads and bridges, which are crucial for economic growth given the hilly terrain.  

Overall, Himachal Pradesh’s economy shows positive growth driven by its secondary and tertiary sectors, with a focus on improving infrastructure, promoting key industries, and enhancing social welfare and digital governance.

Indicator	Latest Figure/Estimate	Year/Period	Source(s)
GSDP (Current Prices)	₹2,10,662 crore	FY2023-24 (FR)	2
GSDP Growth Rate (Constant Prices)	6.7% (Advance Estimate)	2024-25	1
Per Capita Income (Current Prices)	₹2,57,212	2024-25 (AE)	1
Contribution of Agriculture & Allied (%)	15.2% (to GVA)	2024-25 (AE)	1
	14.74% (to GSDP)	FY2023-24 (FR)	2
Contribution of Industry Sector (%)	39.5% (to GVA)	2024-25 (AE)	1
	43.3% (to GSVA)	2021-22	9
Contribution of Services Sector (%)	45.3% (to GVA)	2024-25 (AE)	1
	43.5% (to GSVA)	2021-22	9

*(FR = First Revised, AE = Advance Estimate)*

• Himachal’s Economic Journey: A brief overview of Himachal Pradesh’s economic evolution is essential. Planning commenced in 1951 with the first five-year plan, where over 50% of the expenditure was on transport and communication.⁴ The state has witnessed a significant structural transformation, with the share of agriculture and allied activities in the total GSDP declining from 70.37% in 1950-51 to 35.06% in 1990-91, 17.16% in 2011-12, and further to 14.74% in FY2023-24.² Conversely, the shares of the industry and services sectors have grown substantially.⁴ The Concessional Industrial Package extended by the Government of India in 2003 spurred industrial activity.¹² The current economic focus is on further diversification, leveraging technology, promoting sustainable development, and enhancing self-reliance.¹³ This historical context helps students understand the long-term trends and shifts in the state’s economy, which has implications for future job markets and the skills that will be in demand. While the higher-than-national-average per capita income is a notable achievement for a hill state, it’s also an opportunity for students to critically consider if this masks internal disparities or an over-reliance on specific high-value sectors, prompting further inquiry.

Himachal Pradesh’s strong performance in human development indicators, such as high literacy rates (82.8% in 2011, above national average ⁹) and better health outcomes (Infant Mortality Rate of 17, Total Fertility Rate of 1.7, both better than national average ⁹), forms a crucial foundation for its economic potential. A healthy, educated, and skilled populace is a fundamental asset for economic development, leading to a more productive workforce.