Per Capita Income in Himachal touches ₹2.57 Lakh, Sectoral growth varies

Shimla, March 13,

The per capita income (PCI) at current prices has reached ₹2,57,212 in 2024-25, showing a 9.6% increase from the previous year. Over the past decade, the PCI has grown at a compound annual growth rate (CAGR) of 8.6%. This significant rise reflects the evolving economic landscape of Himachal Pradesh, despite varying sectoral performances.

As far as composition of Revenue Expenditure is concerned. The government spends a major portion of its budget on revenue expenditure. During FY 2023-24(BE), 79.95 percent of total budget spending is estimated to go toward revenue expenditure. About 57 percent of this expenditure is likely to be committed expenditure, which includes salaries, pensions, interest payments, and subsidies.

Also read:Himachal Pradesh economic survey indicates 7.1 pc growth, Rs 2.07L Cr GDP, tourism revival

The total committed expenditure for FY 2023-24(BE) is ₹30,400 crore, accounting for 14.66 percent of the state’s GSDP. Growth in expenditure on salaries and wages is projected at 0.44 percent for FY 2023-24(BE), compared to 25.78 percent in FY 2022-23(RE). Pension expenditure is expected to decrease by 3.95 percent, while growth in interest payments is likely to rise to 16.25 percent. Subsidy expenditure is estimated to show a negative growth of 34.79 percent in FY 2023-24(BE), down from 60.60 percent in the previous year.

Here it is pertinent to mention that, the primary sector of Himachal Pradesh, which employs around 58 percent of the state population, remains the least contributor to the state’s economic growth. This fact came to light after the economic survey was presented by CM Sukhu in the Budget session of the Himachal Vidhan Sabha today.

Primary Sector As per the Advance Estimates (AE) for FY 2023-24, the Gross Value Added (GVA) from the primary sector is likely to contract at the rate of -2.2 percent at constant prices because of contraction in the crop sector. During FY 2023-24(AE), the GVA of the primary sector is expected to be ₹17,036 crore as against ₹17,417 crore in FY 2022-23 (FR) at constant prices. In constant prices, the GVA of the primary sector registered a growth of 4.6 percent in FY 2021-22, 5.7 percent in FY 2022-23, and a contraction of -2.2 percent in FY 2023-24. Notably, the primary sector, which is the backbone of the state economy, employs 58.71 percent of the state’s population, making its economic success crucial for improving living standards in Himachal Pradesh.

The crop sector’s GVA for FY 2023-24(AE) in real terms is estimated at ₹8,540 crore, down from ₹9,138 crore in FY 2022-23(FR), reflecting a contraction of -6.5 percent. Meanwhile, the forestry and logging sector’s GVA for FY 2023-24(AE) is estimated at ₹5,380 crore compared to ₹5,296 crore in FY 2022-23(FR), with a growth rate of 1.6 percent. The livestock sector grew by 4.1 percent, the fishing sector grew by 7.0 percent, and the mining and quarrying sector grew by 5.8 percent in FY 2023-24(AE).

Secondary Sector As per AE for FY 2023-24, the GVA of the secondary sector is estimated at ₹63,424 crore against ₹58,039 crore for FY 2022-23(FR) at constant (2011-12) prices, registering a growth rate of 9.3 percent over the previous year. The secondary sector remains vibrant, and the government of Himachal Pradesh recognizes industrial development as crucial for job creation and productivity growth in other sectors.

Tertiary or Services Sector The services sector is the highest contributor to the state’s Gross State Value Added (GSVA) and employment. The AE for FY 2023-24 at constant (2011-12) prices for the services sector is estimated at ₹54,253 crore compared to ₹50,520 crore in FY 2022-23(FR), with a growth rate of 7.4 percent over the last year.

All key sub-sectors within the services sector depicted buoyant growth rates in 2021-22(SR) and 2023-24(AE). The “Trade, Repair, Hotel & Restaurants” sector’s GVA grew at 4.8 percent in 2022-23 and 8.4 percent in 2023-24. The “Transport, Storage, Communication and Services relating to broadcasting” sector registered a growth rate of 11.4 percent, and the “Real estate, Ownership of dwelling and Professional Services” sector grew at 7.8 percent in 2023-24(AE).

The structure of the economy and workforce in Himachal Pradesh differs from the rest of India. Agriculture and allied activities employed 58.37 percent of the state’s total workforce compared to 45.76 percent for India. However, its share in GVA is only 13.57 percent compared to India’s 18.97 percent. The secondary and tertiary sectors employ 16.94 percent and 24.35 percent of the workforce, respectively, while contributing 41.98 percent and 44.08 percent to the state’s GVA. This indicates a need for workforce reallocation from agriculture to the secondary sector to reduce disguised unemployment.

The services sector has become a key vehicle for employment generation, with employment in this sector estimated at 24.35 percent in 2022-23, compared to India’s 28.94 percent, according to the Periodic Labour Force Survey (PLFS).

Himachal Pradesh’s economic survey reveals a nuanced picture of growth across sectors, with the primary sector’s struggles offset by the dynamism of the secondary and tertiary sectors. As the state strives to balance fiscal discipline with developmental priorities, sectoral realignment and sustainable industrial growth remain key imperatives for the future.

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Himachalscape bureau

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The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.

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Himachalscape bureau

The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.