HIMACHAL PRADESH

NAKO LAKE IN KINNAUR VALLEY

March 2021
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Table of Contents

Executive Summary 3

Introduction 4

Economic Snapshot 8

Physical Infrastructure 14

Social Infrastructure 21

Industrial Infrastructure 24

Key Sectors 27

Key Procedures & Policies 34

Appendix 43

2
Executive summary

1 Strong economic
growth 5 Heritage
• Himachal Pradesh is one of the • Himachal Pradesh has a rich heritage of
fastest-growing states in India. The 5 handicrafts. These include woollen and

1
state’s per capita GSDP in 2020-21 pashmina shawls, carpets, silver and
was Rs. 212,262 (US$ 2,880). metal ware, embroidered chappals,
grass shoes, Kangra and Gompa style
paintings, woodwork, horse-hair bangles,
wooden and metal utensils and various
other household items.

2 Tourists paradise 2 4 4 Increasing agricultural

productivity
3
• Himachal Pradesh, is famous for its
• Government’s emphasis on improving
topographic diversity and pristine natural
productivity has yielded positive results in
beauty. Domestic tourist inflows in the state
the state. Horticulture production in the
reached 16.83 million in 2019 while foreign
state reached 2,722.80 thousand metric
tourist arrivals reached 398,000.
tonnes in 2019-20, as per third advance
• The contribution of the tourism sector to the
estimates.
state GDP is about 7% which is quite
significant

3 India’s hydro-power hub

• With a hydro power potential of 27,436 MW (of which just 10,547.17 MW has been
harnessed), Himachal Pradesh accounts for 12.66% of the country’s total hydro power
potential. All villages of Himachal Pradesh have been electrified.
• The state has been accelerating the pace of Hydropower development through the
active involvement of both the public and the private sector.

3
INTRODUCTION

4
Fact File

Shimla
Capital 123 persons per sq. km. 6.83 million
Population density total population

55,673 sq.km.
geographical area
3.38 million 3.48 million
female population male population

971
Sex ratio
82.08% administrative districts: 12 (females per 1,000 males)
Key Insights literacy rate

• Himachal Pradesh is located in the northern region of India. The state is surrounded by Jammu & 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.
• Being a sub-Himalayan state, Himachal Pradesh has a varied climate that changes with altitude. The climate ranges from warm and sub-humid
tropical at low altitudes to cold and icy at high altitudes. There are three main seasons: winter from October to March, summer from April to June
and rainy from July to September.
• Agriculture contributes nearly 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 depends directly upon agriculture

Source: Census 2011

5
Advantage

High economic growth and stable Rich labour pool and infrastructure support
political environment • The state has a large base of skilled labour, making it a
favourable destination for knowledge-based sectors It also
 The state’s GSDP (in Rs.) increased at a CAGR of
has a large pool of semi-skilled and unskilled labour.
6.50% between 2015-16 and 2020-21.
• Himachal Pradesh has a strong hydropower base, with a
• With a stable political environment and a single-party potential capacity of 27,436 MW.
Government, the state Government is committed • A 210 MW Luhri Stage-I hydropower project worth Rs. 1,810
towards creating a progressive business environment. crore (US$ 245.41 million) was approved in November 2020
by the Union Cabinet to strengthen the power infrastructure
in Himachal Pradesh.
Pharmaceuticals and food
processing hub
• Himachal Pradesh has attracted
investments in the pharmaceuticals, IT
Policy and incentives
and engineering industries.
• The state is implementing the
• Agriculture plays a significant role in the
‘National Education Policy’ by
state’s economy. Himachal Pradesh has
undertaking initiatives such as
a robust food processing sector.
‘Strengthening Teaching-Learning
and Results for States’ (STARS)
project (backup by World Back).
• Himachal Pradesh has well drafted
sector specific policies for
biotechnology and pharmaceuticals,
solar power and startups.

Source: Ministry of Statistics and Programme Implementation, News articles

6
Himachal Pradesh in figures

Himachal Pradesh’s Contribution to Indian Economy (2019-20) Physical Infrastructure in Himachal Pradesh

GSDP GSDP as a percentage of all states’ GSDP

Installed power capacity (MW) (as of February 2021)
India: 100.0 | Himachal Pradesh: 1.08
India: 379,130.41 | Himachal Pradesh : 4,154.57

GSDP growth rate* (%) Wireless subscribers (million)** (as of January 2021)
India: 11.5 | Himachal Pradesh : 8
India: 1,163.41 | Himachal Pradesh : 11.15

Per capita GSDP* (US$) Internet subscribers (million)** (as of September 2020)
India: 1,982.65 | Himachal Pradesh : 3,081.45 India: 776.46 | Himachal Pradesh : 6.40

National highway length (km) (as of December 2020)

Social Indicators
India: 1,36,440 | Himachal Pradesh : 2,606.88

Literacy rate (%)

India: 77.7 | Himachal Pradesh : 86.6 Airport (No.)
India: 153 | Himachal Pradesh : 3
Birth rate (per 1,000 population) (2018)
India: 20| Himachal Pradesh : 15.7
Investments (as of September 2020)

Industrial Infrastructure Cumulative FDI inflows from October 2019 to September 2020
(US$ million)
Operational & Maintenance PPP projects (No.) India: 53.884.85 | Himachal Pradesh : 17.67
India: 1,824 | Himachal Pradesh : 110

Note: *in Rs. terms, GSDP, per capita GSDP figures are taken at current prices, PPP: Public-Private Partnership, SEZ: Special Economic Zone, SRS: Sample Registration System, ** -
Including Chandigarh, Punjab and Haryana, For sources refer to annexure

7
ECONOMIC SNAPSHOT

8
Economic Snapshot – GSDP

GSDP of Himachal Pradesh at Current prices Per Capita GSDP of Himachal Pradesh at Current prices

25 CAGR (in Rs.) 6.50% 1.8 3,500 240000

CAGR (in Rs.) 5.84%
1.6 210000

222,214
3,000

1.63
22.22

212,262
1.57
20 21.50

3,032
21.24

205,277
1.4

2,972

2,937
1.49
20.71

2,880
180000

191,554
1.39 2,500
18.73

2,597
1.2

174,249
17.45

1.26

2,442
15 150000

159,842
1.14

1 2,000
120000
0.8 1,500
10
90000
0.6
1,000
0.4 60000
5
0.2 500 30000
0 0 0 0
2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21
US$ Rs.
US$ billion Rs. trillion
 At current prices, Himachal Pradesh’s gross state domestic
product (GSDP) stood at Rs. 1.57 trillion (US$ 21.24 billion) in
2020-21.  The state’s per capita GSDP in 2020-21 was Rs. 212,262
(US$ 2,880).
 The state’s GSDP (in Rs.) increased at a CAGR of 6.50%
between 2015-16 and 2020-21.  The per capita GSDP (in Rs.) rose at a CAGR of 5.84%
between 2015-16 and 2020-21.
 The downward pressure on growth rates was aggravated due to
COVID-19 pandemic and consequent lockdowns. This is in line
with national and international trends.

Source: Directorate of Economics & Statistics of Himachal Pradesh, MOSPI

9
Economic Snapshot – NSDP

NSDP of Himachal Pradesh at Current prices Per Capita NSDP of Himachal Pradesh at Current prices

25 CAGR (in Rs.) 6.89% 1.6 3,000 210000

CAGR (in Rs.) 6.23%
1.4 180000

190,407
2,701
2,500

1.40

183,286
20

2,568
1.35

2,525
176,459

2,487
1.2

1.28

19.79

165,497
1.20 150000

2,240
18.57

18.38

18.34
2,000

150,290
1

2,070
1.08

15
16.15

135,512
120000
0.97
14.80

0.8 1,500
10 90000
0.6
1,000
60000
0.4
5
500 30000
0.2

0 0 0 0

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21
2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

US$ billion Rs. trillion US$ Rs.

 At current prices, the total net state domestic product (NSDP)

 The state’s per capita NSDP in 2019-20 was Rs. 183,286 (US$
of Himachal Pradesh stood at Rs. 1.35 trillion (US$ 18.34
2.487).
billion) in 2020-21.
 The per capita NSDP (in Rs.) expanded at a CAGR of 6.23%
 The state’s NSDP (in Rs.) increased at a CAGR of 6.89%
between 2015-16 and 2020-21.
between 2015-16 and 2020-21.

Note: exchange rates used are averages of each year

Source: Directorate of Economics & Statistics of Himachal Pradesh, MOSPI

10
Economic Snapshot – % Distribution Of GSDP

 In 2020-21, the tertiary sector accounted for 46.47% share of the Visakhapatnam
GSVA Composition
port trafficby
(million
Sectortonnes)
state’s gross service value added (GSVA), followed by secondary
and primary sectors at 39.66% and 13.87%, respectively. 100%
39.03% CAGR 46.47%

 Tertiary sector posted the fastest rise at a CAGR of 10.76% between 90%

2011-12 and 2020-21. 10.76%

80%

 Between 2011-12 and 2020-21, the secondary sector expanded at a 70%

CAGR of 7.44% and the primary sector increased at a CAGR of
60%
6.08%. 43.81%

50% 39.66%
7.44%
40%

30%

20%
17.16%
10% 6.08% 13.87%

0%
2011-12 2020-21

Primary Sector Secondary Sector Tertiary Sector

Source: Directorate of Economics and Statistics of Himachal Pradesh

11
Economic snapshot – FDI inflow & investments

FDI Inflow in Himachal Pradesh^ Proposed Investments

April 2000-March 2020 (US$ billion)
Proposed
Year IEMs filed investments
3
(in US$ million)

3 0.31 2.40 2016 9 147.5

0.62 2017 6 17.6

2
2018 17 75.78
0.11 2019 15 49.36
2 0.09 0.04 0.03 0.01
0.13 0.05
2020* 7 30.03
1.02
1

 According to the Department for Promotion of Industry and Internal

1 Trade (DPIIT), the cumulative FDI inflows in Himachal Pradesh were
valued at US$ 17.67 million between October 2019 and September
0 2020.
FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20
FY00-FY11

FY00-FY20

 For FY2020, (until December 2020), seven investment intentions

were filed in Himachal Pradesh, with a proposed investment value of
Rs. 218 crore (US$ 30.03 million).
Annual FDI Inflow

 The state Government will organise a global investors meet in June

Note: ^ - including Chandigarh, Punjab and Haryana *Till December 2020 2019 to show Himachal Pradesh as a model industrial hub.
Source: Department for Promotion of Industry & Internal Trade (DPIIT)

12
Economic snapshot – Export

Merchandise Export from Himachal Pradesh (US$ million) Major Commodities Exported in FY20*

1600.00

1400.00 2% 13%
1,392.91 Drug, Formulations & Biologicals
1200.00 1,323.43 2%
1,221.66 3% Cotton yarn
1000.00 1,056.01 3% Man Made Yarn & Fabrics
800.00 919.42
4% Cotton Fabrics
600.00 Bulk Drugs
5% 68%
400.00 Paper & Paper Board

200.00 Cosmetics & Toiletries

0.00 Others
FY17 FY18 FY19 FY20 FY21*

 Total exports from Himachal Pradesh stood at US$ 1,392.91 million in 2019-20. In FY21 (until October 2020), exports from Himachal Pradesh
stood at US$ 919.42 million.

 The key items exported from Himachal Pradesh included drug formulation and biological, cotton yarn and manmade yarn fabrics.

 In FY21*, drug formulation and biological exports from Himachal Pradesh stood at US$ 626.12 million, which was 68% of the total exports.

Note: *- till October 2020

Source: DGCIS Analytics

13
PHYSICAL INFRASTRUCTURE

14
Physical infrastructure – Roads

 Since much of the state is hilly, roads play a vital role in

transportation.

 Starting almost from scratch, the state government constructed

39,998 km of motorable roads (inclusive of jeepable and track) until
November 2020.

 At present, 2,592 kms. of 19 National Highways are the main

lifelines of the state road network.

 Under the State Budget 2021-22, the government has proposed an

outlay of Rs. 4,046 crore (US$ 551.87 million) to construct roads
and bridges.

 In September 2020, the Shimla-Mataur highway, one of Himachal

Pradesh’s primary national highways set for four-laning, was
declared unviable by the central government due to the financial
crisis caused by the COVID-19 pandemic.
 However, another project on a strategic road, linking Darcha in
Source: Maps of India
Himachal Pradesh with Ladakh, that will criss-cross a number of
high-altitude snow-bound passes, has been expedited and is
expected to be completed by the end of 2022.
Pradhan Mantri Gram Sadak Yojana (PMGSY) in 2019-20
 In October 2020, the Atal Tunnel at Rohtang in Himachal Pradesh
was inaugurated by Prime Minister, Mr. Narendra Modi. The 9.02 Target Habitations 115
km long tunnel, passes through the Rohtang Pass, is the world's
longest highway tunnel, linking Manali with the Lahaul-Spiti valley. Target Length (km) 3,015

Habitations Connected 60

Source: Himachal Pradesh Economic Survey, 2020-21, State Budget 2021-22

15
Physical infrastructure – Railways

 Himachal Pradesh falls under the Northern Railways network.

 As of December, there are two narrow gauge railway lines

connecting Shimla with Kalka (96 km) and Jogindernagar with
Pathankot (113 km) and a 33-km broad gauge railway line from
Nangal Dam to Charuru in District Una.

 A provision of Rs. 422 crore (US$ 65.18 million) has been made in
2018-19 for expansion of the railway network in the state.

 In July 2020, the State Transport Minister, Mr. Govind Singh Thakur,
announced to expediate land acquisition for the 475-km Bhanupali
(Anandpur Sahib)-Bilaspur-Manali-Leh railway line.

 The Bilaspur-Manali-Leh railway line will be made operational by

2022; the Keylong station in Himachal, which will be a part of this
line, will be India’s first railway station under a tunnel.

Source: Himachal Pradesh Economic Survey, 2020-21

16
Physical infrastructure – Airports

 There are 3 airports in Himachal Pradesh - at Kullu (Bhuntar),

Kangra (Gaggal) & Shimla (Jubbar Hatti).

 The state Government has identified 3 sites at Kandaghat in the

Solan district & Nadaun in the Hamirpur district to establish an
international airport in the state.

 The state Government has taken an initiative to introduce heli-taxi

services, which are expected to improve connectivity and open up
remote areas for tourists.

 Under the state’s 2020-21 budget, a provision of Rs. 1,013 crore

(US$ 138.1 million) has been made for the expansion of airports,
construction of an airport at Mandi and construction of five heliports.

Airport indicators in 2020-21 (April - November)

Airport Passengers Aircraft Movements

Bhuntar 3,301 287

Gaggal (Kangra) 53,737 1,192

Shimla 313 300

Source: Himachal Pradesh Economic Survey, 2020-21, AAI, State Budget 2020-21

17
Physical infrastructure – Power

Installed power capacity (MW) Break-up of installed capacity in FY20

4,600
4,500
4,400 5% 1%
4,463.00

4,300
24% Hydropower
4,200
4,100 Renewable Power

4,154.57
Thermal Power

4,068.13
4,000
4,038.68

3,900 70% Nuclear Power

3,892.72

3,800
3,700
3,600
2016 2017 2018 2019 2020*

 As of February 2021, Himachal Pradesh had a total installed power generation capacity of 4,154.57 MW, comprising 2923.88 MW by hydropower,
213.70 MW by thermal power, 988.04 MW by renewable power and 28.95 MW by nuclear power.
 The state has immense potential for hydropower, as it is naturally blessed with abundant streams and rivers flowing from towering mountains.
 In November 2020, the Union Cabinet approved a proposal for an expenditure of Rs. 1,810 crore (US$ 245.41 million) for the 210 MW Luhri
Stage-I hydropower project in Himachal Pradesh on the Satluj River. 758.20 million units of electricity annually will be generated by this project.
The project will help create ~2,000 direct and indirect jobs and will contribute to the state's overall socioeconomic growth.
 In the State Budget 2021-22, the government announced plans to formulate the Swaran Jayanti Energy Policy in 2021-22 to promote the energy
sector.

Note: MW- megawatt * - as of February 2021

Source: Central Electricity Authority, Himachal Pradesh Economic Survey 2020-21, State Budget 2021-22

18
Physical infrastructure – Telecom

Telecom Statistics (as of January 2021) Performance of Bharat Net

Wireless subscribers 11,154,105

Wireline subscribers 88,790

Service-ready GPs
365
(November 2020)
Teledensity (in %) 147.10

Internet subscribers (million) 6.08

 At 147.10 % in June 2020, the state had the second highest tele density in India after Delhi.

 According to Telecom Regulatory Authority of India (TRAI), Himachal Pradesh had 11.15 million wireless subscribers and 88,790 wireline
subscribers, as of January 2021.

 The major telecom operators in Himachal Pradesh are: Bharat Sanchar Nigam Limited (BSNL), Bharti Airtel, Vodafone idea, Cellular Services

 By end-January 2021, 2.65 million subscribers had submitted request for mobile number portability in the state.

Note: GP-Gram Panchayat

Source: Telecom Regulatory Authority of India; Department of Telecommunications- Ministry of Communications & Information Technology

19
Physical infrastructure – Urban

 The government has constructed 10,000 houses during the last 2.5 Cities under Smart
Population Area (sq km)
years under various housing schemes in the state. Himachal Pradesh Cities Mission
was the only state in the country that provided Rs. 1,50,000 to each Dharamshala 22,580 29.51
beneficiary for constructing the house. The project is supported by the
Pradhan Mantri Awas Yojna (Urban) scheme. Shimla 269,578 5131

 Under the State Budget 2021-22, an outlay of Rs. 728 crore (US$
99.30 million) has been proposed towards urban development.  In Himachal Pradesh, Dharamshala and Shimla have been
 Rs. 168 crore (US$ 22.92 million) has been allocated towards selected to be developed as smart cities under the smart city
assistance to municipalities and the municipal council. scheme of the central Government.

 Rs. 74 crore (US$ 10.09 million) has been allocated towards the  Under the smart city scheme, 24 hours persistent water and power
Smart City Mission. supply would be provided to the city.

 Rs. 457 crore (US$ 62.33 million) has been allocated towards the  Under the Smart City Mission (SCM), six projects were completed,
urban water supply programme. and 11 additional projects were initiated in Dharamshala, out of the
74 proposed projects in FY2019-20.
 In October 1, 2020, Himachal Pradesh Urban Development Minister,
Mr. Suresh Bhardwaj, reviewed the Mukhya Mantri Shahri Ajeevika
Guarantee Yojana (MMSAGY) and Deendayal Antyodaya Yojana -
National Urban Livelihoods Mission (DAY-NULM) schemes and said
that both schemes are related to employment and will pave the way
for Aatmanirbhar Bharat.

• He further highlighted that in FY2020-21, Rs. 1.54 crore (US$ 0.21

million) has been spent under DAY-NULM scheme, while Rs. 3.64
crore (US$ 0.050 million) is still unspent. In addition, 324 self-help
groups (SHGs) have been formed in 2020-21, against the target of
200.
Source: JNNURM, Ministry of Urban Development, Rajyasabha, Economic Survey 2019-20, State Budget 2019-20

20
SOCIAL INFRASTRUCTURE

21
Social infrastructure – Education

 In 2020-21, Himachal Pradesh had a total of 58 AICTE-approved AICTE Approved Education Statistics (2020-21)
institutes.

 Under the State Budget 2021-22, the government has proposed an Undergraduate Postgraduate Diploma
outlay of Rs. 8,272 crore (US$ 1.13 billion) for the education sector.
Total
 Rs. 289 crore (US$ 39.42 million) has been allocated towards the Institutions
28 17 30
‘Sarva Shiksha Abhiyaan’.

 Rs. 81 crore (US$ 11.05 million) has been allocated towards the Total
3,980 974 5,060
Intake
‘Mid-Day Meal’ scheme.

 The government announced that the state’s Private Educational

Faculties 1,634 164 135
Institutions Regulatory Commission will launch an IT-based
management information system to effectively regulate the higher
private educational institutions.

 The state plans to achieve the following key goals in 2021-22: No. of Educational Functional Institutions (as of December 2020)

 Maintaining 100% net enrolment ratio at primary and upper

primary levels. Type No.

 Enhancing computer use for pedagogical purposes, 25% at Primary 10,716

primary, 30% upper primary 100% secondary and senior Middle 2,016
secondary levels.
High Schools 932
 Enhancing internet use for pedagogical purposes, 70% at
secondary, and senior secondary level. Senior Secondary Schools 1,869
 Enhancing availability of toilets for children with special needs to Degree Colleges 139
50% from the current levels.
TOTAL 15,672
Source: Himachal Pradesh Economic Survey 2020-21, State Budget 2021-22

22
Social infrastructure – Health

Facility Number (As of May 2020) Health indicators (SRS bulletin, September 2017)
Sub centres 2,208
1
Community Health Birth rate 16.0
115
Centres
1
Death rate 6.8
Primary Health Centres 640
2
Sub District Hospital 98 Infant mortality rate 25.0

District Hospital 17

Total Institutions 3,078

 As of May 2020, the state had 2,208 sub centres, 640 primary health centres, 115 community health centres, 98 sub district hospitals and 17
district hospitals.
 Under the State Budget 2021-22, the government has proposed an outlay of Rs. 2,976 crore (US$ 405.93 million) for the Health and Family
Welfare sector, of which Rs. 339 crore (US$ 46.24 million) has been allocated towards the National Rural Health Mission. The state plans to
achieve the following key goals in in 2021-22:
 100% institutional deliveries, 100% immunisation and reduce TB incidence to < 70/lakh.
 Reduction in maternal deaths in the absolute numbers to <40.
 Reduction in infant mortality rate to 23 from the existing level. Zero transmission of HIV from mother to child.
 Dedicated trauma care services up to PHC level.
 100% coverage of the entire population under the ‘Health Insurance’ scheme.
 Reduction in tobacco use among aged 15 years and older from the current level (22%) to 17%.

Source: State Budget 2020-21, Ministry of Health & Family Welfare; Sample Registration System (SRS) Bulletin 2014, 1Per thousand persons, 2Per thousand live births

23
INDUSTRIAL INFRASTRUCTURE

24
Industrial infrastructure … (1/2)

 As of November 2019, 54,310 industrial units were established in the state with an investment of ~Rs. 49,974 crore (US$ 6.82 billion), providing
employment to ~4.52 lakh people. Out of these, 140 industrial units are large and 628 are medium scale units.
 Since the formation of the state, land pool of ~3,000 acres is under the Industries Department for industrial development applications. In 2020-21,
the government added and created an additional land bank of ~2,800 acres for the department for the proposed future industrial development.
 To further boost the state’s economy and create job opportunities, the Industries Department successfully organised its first ‘Global Investor
Meet’—where MoU’s for 236 projects worth Rs.13,600 crore were signed—and the ground-breaking ceremony in 2019.

Status of Industrialisation Infrastructure Description

 Presence of >28,000 enterprises.
 Micro, Small & Medium Enterprises
(MSME) comprising 99% industrial sector.
 93% total employment generation of the
industrial sector is from the MSME sector.
 Annual exports worth Rs. 10,000 crore
(US$ 1.36 billion) to >60 countries.
Source: Himachal Pradesh Economic Survey 2019-20, State Budget 2020-21
Set up at Baddi, Barotiwala, Parwanoo, Kala Amb, Paonta Sahib,
Industrial areas
Mehatpur, Tahliwal, Amb, Sansarpur Terrace, Golthai, etc.
Baddi Barotiwala The industrial area has been promoted by the Ministry of Commerce
Nalagarh Industrial and Industries, Government of India. It has emerged as a hub for
Area textiles, pharmaceuticals and packaging industries.
The Government has proposed to set up a biotechnology park at
Biotechnology Park
Nalagarh.
A nanotechnology park is proposed to come up on a 400-acre area
Nanotechnology Park
near the Biotechnology Park at Aduwal near Nalagarh.
An ICD is being developed at Baddi for the benefit of exporting
Inland Container Depot industries through the Container Corporation of India. A
(ICD) Memorandum of Understanding (MoU) has been signed between the
Himachal Pradesh Government and Container Corporation of India.

25
Industrial infrastructure … (2/2)

 In an effort to provide infrastructure support to entrepreneurs, the Himachal Pradesh Government has developed 41 industrial areas and 15
industrial estates.

Primary
Name and location Description
industry
Pharmaceuticals Located in the Solan district, the Baddi industrial area has several pharmaceutical, textile, auto
Baddi
/Textiles ancillary, paper and printing units.
Barotiwala Multi-industry Located in the Solan district; hub for small scale industries.
Light Located in the Solan district; the city is an industrial cluster for high-density polyethylene (HDPE) pipe
Parwanoo
engineering companies.
Located on the Shimla-Kalka highway in the Solan district, the industrial area has prominent
Chambaghat Electronics companies such as Himachal Futuristic Communications Limited and Shivalik Bimetal Controls
Limited.
Pharmaceuticals
Paonta Sahib Located in the Sirmour district, the industrial area has a few pharmaceutical and chemical companies.
/Chemicals
Tahliwal and Gagret Electronics Located in the Una district, it has prominent telecommunications companies.
Amb has prominent engineering and automotive companies such as International Cars and Motors
Amb Industrial Area Engineering/auto
Limited.
Sansarpur Terrace Engineering Located in the Kangra district, it has some of the leading engineering companies of North India.
Golthai Multi-industry Located in the Bilaspur district, it has been identified as a mini growth centre.

Source: Himachal Pradesh Economic Survey 2019-20, State Budget 2020-21

26
KEY SECTORS

27
Key sector – Agricultural and allied industries… (1/3)

Horticulure Production (‘000 metric tonnes) Food grains Production (‘000 metric tonnes)

2,800 1,720
1,700
2,700
2,709 2,723 1,680 1,692
1,660 1,675
2,600
1,640
2,500 1,620
1,600
2,400 2,452
2,431 1,580 1,594
2,404 1,581
2,375 1,560
2,300
1,540
2,200 1,520
FY15 FY16 FY17 FY18 FY19^ FY20^ FY18 FY19^ FY20 FY21^

 Agriculture is a key livelihood for the people of Himachal Pradesh and holds a significant share in the state’s economy. To increase production of
foodgrains, emphasis has been laid on distribution of seeds of high-yielding varieties to farmers.
 In 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. Besides this, 7.69 lakh fruit plants of different species were also distributed as of December 2020. In 2019-20, 18.61
lakh tonnes of vegetables were produced, over 17.22 lakh tonnes in 2018-19, posting a growth of 8.07%. It is anticipated that production of
vegetables will be ~16.58 lakh tonnes in 2020-21.
 In line with government’s step towards “AatmaNirbhar Bharat and Aatmanirbhar Krishi’ programmes, Gujrat State Fertilizers and Chemicals
(GSFC) India Ltd., in October 2020, launched calcium nitrate & boronated calcium nitrate products to provide quality products at a cheaper rate to
the farmer community. The two products in the retail market were launched from Solan in Himachal Pradesh and Bhavnagar in Gujarat.

Note: **target, MT - Metric tonnes, ^- third advance estimate

Source: Himachal Pradesh Economic Survey 2020-21, Department of Agriculture Cooperation and Farmers Welfare, Ministry of Food Processing Industries, PRS Legislative Research

28
Key sector – Agricultural and allied industries… (2/3)

Food Processing Clusters in Himachal Pradesh

 Under the State Budget 2021-22, the following initiatives are
proposed for the agriculture sector:
Category Districts
 The state’s legal framework will be amended to permit marketing
Dairy products and Shimla, Mandi, Bilaspur, Kullu, Kangra,
and trading of flowers through APMC mandis.
analogues Solan, Hamirpur, Una, Sirmaur
 The ‘Swaran Jayanti Paramparagat Beej Suraksha Samvardhan
Yojana’ will be started for conservation and propagation of Spices Mandi, Bilaspur, Shimla
traditional seeds in the state.
Prepared Foods Kangra, Mandi, Hamirpur
 A research and development fund, with an initial corpus of Rs. 5
crore, will be created for agriculture and horticulture universities in Cereals and cereal Solan, Hamirpur, Kangra, Kullu, Kangra
the state. products

 Rs. 154 crore (US$ 21.01 million) has been allocated towards food Ready to eat Hamirpur, Solan, Kangra
subsidies.
Pickle, Jam Squash Solan, Kangra, Una
 With suitable agro-climatic conditions, Himachal Pradesh has
realised the importance of commercial crops, including off-season
vegetables, potatoes and ginger. The state is one of the largest
producers of off-season vegetables and exotic fruits and the second
largest producer of apples and almonds in the country.

 The food processing industry primarily focuses on the areas of

traditional processing of agricultural and horticultural raw materials.
Presence of good food processing infrastructure has attracted major
companies to invest in the state. There are 12 cold chains and one
dedicated food park in Himachal Pradesh.

Source: Ministry of Food Processing Industries, PRS Legislative Research

29
Key sector – Agricultural and Allied industries… (3/3)

Key players

 Cremica Group is a prominent player in food retail and food services industries in India. The company’s business
activities include Cremica Frozen Foods, EBI Foods, Mrs Bector’s Desserts and Cremica Agro India. The
company is commissioning a plant at Tahliwal Industrial Area, Una, for manufacturing biscuits and Indian snack
foods. It is a 100% automated facility, with an annual manufacturing capacity of 150,000 MT.
Cremica Group

 Adani Agrifresh, a 100% subsidiary of Adani Enterprises, has set up three controlled-atmosphere storage units at
Rampur, Sainj and Rohru in Himachal Pradesh, with an investment of US$ 40 million and a combined capacity of
18,000 metric tonnes of apples per year. The subsidiary is involved in the procurement, storage and transportation
of fresh fruits and vegetables. The company directly buys fruits from about 4,000 farmers.
Adani Agrifresh Ltd

 Nestlé has been operating in India for almost a century, with seven production facilities across the country. The
company produces chocolates and confectionaries, prepared dishes and cooking aids, beverages and milk
products and nutrition.

Nestle India  The company has a factory in Tahliwal, Una, Himachal Pradesh.

 Dabur is one of the country’s largest consumer goods companies.

 The company produces several products, including honey and amla, in Baddi.
Dabur India Ltd

Source: Company Websites & Annual Reports

30
Key industries – Pharmaceuticals … (1/2)

 Himachal Pradesh has emerged as a hub of drug manufacturing

units and meets 35% of the demand for pharma products in Asia. Exports of drug formulations and biologicals

900.0
 Due to rise of the pharmaceutical industry, Baddi-Barotiwala-
Nalagarh industrial belt is globally known for production of 800.0
822.0
formulation drugs. The belt manufactures >150 formulation drugs, 700.0
with demand in >200 countries. 702.9
600.0
626.1
 The Department of Environment, Science & Technology (DEST), 500.0
533.4
Government of Himachal Pradesh, proposes to develop a 400.0 450.1
Biotechnology Park (BTP) spread over an area of 35 acres at 300.0 352.8
Aduwal in Solan under PPP mode in the state.
200.0
 The Union Finance Ministry is actively considering to allocate Rs. 100.0
1,000 crore (US$ 136.5 million) for the development of a 2,000-acre 0.0
bulk drug park at Nalagarh area in Baddi, Himachal Pradesh. FY16 FY17 FY18 FY19 FY20 FY21*

 The Ayurvedic Department has three ayurvedic pharmacies at -

Jogindernagar District Mandi, Majra District Sirmaur & Paprola Some of the key players
District Kangra. The 4 herbal gardens of the state are located at -
Jogindernagar (Mandi), Jungle Jhalera (Bilaspur), Neri (Hamirpur) &  Ranbaxy Laboratories Ltd
Dumreda (Shimla).  Cipla Ltd
 In FY20, exports of drug formulations and biologicals from the state  Dr Reddy's Laboratories Ltd
stood at US$ 822.0 million and have reached US$ 626.1 million in
FY21 (until October 2020).  Panacea Biotec Ltd

 Mankind Pharma

Source: Himachal Pradesh Economic Survey 2019-20, News articles

31
Key industries – Pharmaceuticals … (2/2)

Key players

 Ranbaxy is one of the leading pharmaceutical companies in India, with business operations in 43 countries and
manufacturing facilities in eight countries.. In 2008, Japanese conglomerate Daiichi Sankyo became the largest
shareholder in Ranbaxy, which is now its global generic arm. In March 2015, Sun Pharma acquired Ranbaxy
Laboratories.
Ranbaxy Laboratories  It has a manufacturing facility at Paonta Sahib, Sirmaur
Ltd (Sun Pharma)

 Cipla has one of the largest product portfolios, with over 1,000 products.
 It established a manufacturing facility in Baddi in 2005. The unit manufactures bulk drugs, tablets and capsules,
creams, aerosols/inhalation devices and injections/sterile solutions.
Cipla Ltd

 Established in 1984, Dr. Reddy’s ranks among the top 15 generics players in the world.
 Dr Reddy’s has a finished dosage facility in Baddi.
Dr Reddy's
Laboratories Ltd (DRL)

 Panacea is one of India’s prominent pharmaceutical and biotech companies involved in research, manufacturing
and marketing of pharmaceutical formulations. The company has around 2,700 employees, including 130
scientists.
 Panacea’s pharmaceutical and vaccine formulations facility is located in Baddi, with a production capacity of 600
million doses per annum. The production is likely to be increased to one billion doses per annum after the addition
Panacea Biotec Ltd of the third line.

32
Key industries – Tourism

Number of domestic tourists (million) Number of foreign tourists (in ‘000s)

25.00 500
450 471
20.00 453
19.13 400
350 383
17.99

356

16.83
15.00 300

16.09
250
10.00
200

3.17
150
5.00
100
50
0.00 43
2016 2017 2018 2019 2020 (Upto 0
Dec) 2016 2017 2018 2019 2020

 Tourism is one of the most important sectors for the state economy in terms of foreign exchange earnings and creation of employment
opportunities. Himachal Pradesh is endowed with topographic diversity, historical monuments and religious shrines. As of December 2019, there
were 3,679 registered hotels in the state. Top tourist destinations in the state include Kullu, Shimla, Kangra, Solar, Chamba and Spiti.
 The state had recorded a significant rise in the inflow of domestic and foreign tourists in the past few years; however, due to COVID-19, there has
been a sharp decrease of 81% in tourist arrivals, as of December 2020.
 The tourism sector of Himachal Pradesh contributes 7% to the state GDP. Domestic tourists inflow in the state reached 16.83 million in 2019,
while foreign tourists arrival reached 383,000.
 The government introduced ‘Himachal Pradesh Tourism Sector Policy 2019’ to position the state as a leading global sustainable tourism
destination for inclusive economic growth. The state envisions to achieve the set goal by protecting the state’s natural and cultural heritage,
improving quality of life and offering better employment opportunities; enhancing tourist experience and innovation through private sector
participation.
 In November 2020, Fortune Hotels has announced fourth alliance in the state with the opening of its maiden property in Dalhousie, Himachal
Pradesh.
Source: Ministry of Tourism, Government of India, Himachal Pradesh Economic Survey 2020-21

33
KEY PROCEDURES AND POLICIES

34
Single-window clearance mechanism …(1/2)

 Single-Window Clearance Mechanism (SWM) was established in SWM structure in Himachal Pradesh
2004. It has a two-tier structure.

• District Single Window Clearance Committee for each district in

the state is chaired by General Manager/Member Secretary, with State-level Single
Chief Minister of
senior-most officers of departments concerned in the district as Window Clearance and
Himachal Pradesh
membeRs Monitoring Authority

• State-level agency with Chief Minister of Himachal Pradesh as

Chairman and various heads of departments as membeRs

• Approval for proposals with investments of over US$ 1.09 million,

power requirement of above 1 MW and industries in the negative
list (such as forest-based and mining); as defined by central and
state Governments, are decided by the state-level Single-Window
Clearance Agency.

• In the budget 2015-16, the Government announced its plans to

revamp the State Level Single Window Clearance & Monitoring
Authority. District-level Single
GM-DIC/ Member
Window Clearance
Secretary
• According to the budget speech 2015-16, approval for Agency
establishing industries in the state would be granted within a
period of 45 days from the date of submission of common
application form, which should be complete in all respect and
fulfilling all necessary requirements.

Source: Industries Department, Government of Himachal Pradesh, State Budget 2015-16; GM: General Manager, DIC: District Industrial Centre

35
Single-window clearance mechanism …(2/2)

 Single-window Clearance and Monitoring Agency: State-level Nodal Agency

Purpose Composition

 Provides first approval to medium and large scale investment proposals  The Chief Minister of Himachal Pradesh is Chairman of the
between 30-60 days of submission. agency; other members include heads of the departments of
town and country planning, labour, electricity, water, director of
 Projects above US$ 1.09 million, power requirements above one MW and
industries and industrial adviser.
industries in the negative list (such as forest-based and mining) as defined
by the central and state governments are approved by the agency.

 District Industry Centre (DIC): District-level Committee for Single-window Clearance

Purpose Composition

 Provides sanctions and clearances for setting up small scale industrial  Convened by the General Manager, DIC or member secretary,
units. Single-window Clearance and Monitoring Agency.

Source: Industries Department, Government of Himachal Pradesh ; MW: Mega-Watt, DIC: District Industrial Centre

36
Key investment promotion offices

Agency Description

 Agency for speedy clearance and in-principle approval to large and medium scale projects.
Single-Window  Time frame for approval is 45 days.
Clearance Agency  Since inception in 2004, 104 meetings have been held, and 1,023 projects, with an investment of US$ 11.77
billion, have been approved up to December 2014.

Himachal Pradesh State  Supply of raw materials through appropriate depots.

Small Industries and Export  Supply of machinery on hire-purchase.
Corporation  Provision of assistance in export and marketing.

 To provide medium and long-term loans as well as working capital loans to small and medium scale units under
Himachal Pradesh
various schemes.
Financial Corporation
 To provide loans for expansion, modernisation and rehabilitation of existing units.

 Registration of Small Scale Industries (SSI) and recommendation of medium and large scale industries to the
appropriate authority.
 Technical and general consultancy.
 Recommendation for financial assistance to financial institutions/banks for margin money and loans.
Directorate of
 Industrial infrastructure development.
Industries
 Collection and maintenance of data relating to industrial units.
 Allotment of industrial plots, sheds and shops in districts.
 Liaison with and provide feedback to the central and state Governments.
 Administration of all incentives to industries given by the central and state Governments.

Source: Department of Industries, Government of Himachal Pradesh; State Budget 2015-16

37
Contact list

Agency Contact Information

Himachal Pradesh Industries Department
Udyog Bhawan
Shimla
Phone: 91-177-2813414
E-mail: dirindus-hp@nic.in
Website: https://emerginghimachal.hp.gov.in

4th & 5th Floor, New Himrus Building

Himachal Pradesh State Industrial
Development Corporation Limited
Cart Road
Shimla
Phone: 91-177-2624751, 2621426
Fax: 91-177-2624278
E-mail: hpsidc@sancharnet.in
Website: http://www.hpsidc.nic.in

38
Key approvals required … (1/2)

Approvals and clearances required

(Prior to setting up the unit) Departments to be consulted

District Industry Centre for SSI or Large and Medium Industries

Registration

Allotment of land/shed State Department of Industries/Infrastructure Corporation

Permission for land use District Authorities, Department of Town and Country Planning

No Objection Certificate under Water Himachal Pradesh State Pollution Control Board
and Air Act

Town and Country Planning Authority

Approval for construction activity and
building plan

State Pollution Control Board and Ministry of Environment and Forests

Site environmental approval

Central and State Excise Departments

Provisional trade tax registrations

Registration under Central Sales Tax Central and State Excise Departments
Act

Source: Commissionerate of Industries, Government of Himachal Pradesh

39
Key approvals required … (2/2)

Approvals and clearances required

(Before commencement of production) Departments to be consulted

No Objection Certificate under Water

Himachal Pradesh State Pollution Control Board
and Air Act

No Objection Certificate Fire Department and Directorate of Factories and Boilers

Permanent trade tax registration Central and State Excise Departments

Registration under Central Sales Tax Central and State Excise Departments
Act

Approvals and clearances required

(Before commencement of production)

Department of Industries and respective sector departments such as

Registration Information Technology/Biotechnology, etc.

Source: Commissionerate of Industries, Government of Himachal Pradesh

40
Cost of doing business in Himachal Pradesh

Parameter Cost estimate

Baddi Industrial Area: US$ 15-50

Industrial land (per sq ft)
Other Industrial Areas: US$ 12-35

Office space rent

US 10 cents to US$ 8
(per sq ft per month)

Residential rent
US$ 100-200 per month
(1,600 to 2,500 sq ft house)

Hotel costs (per room, per night) US$ 20-200

Small and medium industries: US 8.3-8.7 cents

Power (per kWh)
Large industries: US 7.5-8.7 cents

Labour (minimum wage per day) US$ 4.5-7

Domestic: US 18 cents
Water (per kl)
Commercial: US 32.6 cents

Source: Directorate of Industries, Ministry of Labour and Employment, Government of India, Himachal Pradesh Irrigation and Public Health Department,
Himachal Pradesh State Electricity Board Ltd, Industry sources

41
State Acts & Policies

National Education Policy 2020

1
 In September 2020, Himachal Pradesh government announced that National Education
Policy, 2020 will be implemented in the state with immediate effect.

Himachal Pradesh Industrial Investment Policy, 2019

 To achieve environmentally sustainable and balanced industrial growth leading to more

2 employment opportunities, income generation and overall economic development of the

state. Read more

Himachal Pradesh Tourism Policy 2019

3
 To make tourism sustainable with prime focus on socio-economic growth and
employment generation.
Read more

IT, ITeS and ESDM Policy 2019

4
 Set up all the infrastructure facilities required to build the IT, ITeS and ESDM companies
 Generate more employment opportunities and encourage entrepreneurship in the state.
Read more

AYUSH Policy 2019

 To establish a strong and well-designed network of AYUSH services in the state

5 providing easily accessible, affordable and equitable healthcare delivery system to the
general population. Read more

42
APPENDIX

43
Sources

Data Sources

GSDP (state) Directorate of Economics & Statistics of Himachal Pradesh

Per capita GSDP figures Directorate of Economics & Statistics of Himachal Pradesh, Central Statistics Office

GSDP (India) Central Statistics Office

Installed power capacity (MW) Central Electricity Authority

Wireless subscribers (No) Telecom Regulatory Authority of India

Internet subscribers (million) Telecom Regulatory Authority of India

National highway length (km) NHAI, Roads and Building Department-Government of India

Airports (No) Airports Authority of India

Literacy rate (%) Census 2011

Birth rate (per 1,000 population) SRS Bulletin September 2017

Cumulative FDI equity inflows (US$ billion) Department for Promotion of Industry & Internal Trade

Operational PPP projects (No) DEA , Ministry of Finance, Government of India

44
Exchange rates

Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year Rs. Equivalent of one US$ Year Rs. Equivalent of one US$
2004-05 44.95 2005 44.11

2005-06 44.28 2006 45.33

2006-07 45.29 2007 41.29
2007-08 40.24 2008 43.42
2008-09 45.91 2009 48.35
2009-10 47.42 2010 45.74
2010-11 45.58 2011 46.67
2011-12 47.95 2012 53.49
2012-13 54.45 2013 58.63
2013-14 60.50 2014 61.03
2014-15 61.15 2015 64.15
2015-16 65.46 2016 67.21
2016-17 67.09 2017 65.12
2017-18 64.45 2018 68.36
2018-19 69.89 2019 69.89
2019-20 70.49 2020 74.18
2020-21 72.59 2021* 73.69

Note: As of February 2021

Source: Reserve Bank of India, Average for the year

45
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