Shimla: Himachal Pradesh’s economy, which has undergone a significant structural transformation from being predominantly agriculture-driven to a more balanced mix of services and manufacturing, is projected to grow at 8.3% in 2025-26, up from 6.4% last year — outpacing the national GDP estimate of 7.4%, states the ‘Economic Survey 2025-26′ report tabled by chief minister Sukhvinder Singh Sukhu in the state legislative assembly on Friday.The report highlighted that the per capita income of the hill state is estimated at Rs 2.83 lakh in 2025-26, registering a growth of 9.8% over the previous year. The state’s per capita income, Rs 87,721 in 2011-12, has registered a compound annual growth rate of 8.7% by 2025-26.The economic survey mentions that the hill state’s real gross state domestic product (GSDP) at constant prices for 2025-26 is estimated at Rs 1.56 lakh crore as against Rs 1.44 lakh crore in the previous year, exhibiting a growth rate of 8.3%.Since the service or the tertiary sector continues to grow at the fastest pace, driving the state’s economy, it accounted for 46.3% of the gross state value added (GSVA), followed by the secondary or industrial sector at 39.4% and the primary or the agriculture sector at 14.3%. As per estimates, the agriculture and allied sector GSVA is estimated to increase by 8.30% at constant prices in 2025-26 as compared to the growth rate of 2.7% realised in the previous year.The GSVA of the tertiary sector is projected at Rs 62,581 crore in 2025-26, marking an 8.6% rise from Rs 57,643 crore in the previous year. The secondary sector is estimated to contribute Rs 66,324 crore, up 7.7% from Rs 61,561 crore. Meanwhile, the primary sector GSVA is expected at Rs 18,824 crore, registering 8.4% growth over Rs 17,362 crore in 2024-25.The survey highlights that tourist arrivals in the hill state have rebounded post-pandemic, with domestic tourists rising from 32.13 lakh in 2020 to 3.11 crore in 2025, including religious tourists. The tourism, hotel and restaurant sector contributed 7.77% to the 2024-25 state’s GSVA.The state govt’s entitlement from 143 power projects totals 1,574 megawatts (MW) of saleable power and it earned revenue of Rs 1,668 crore till Dec 2025, with an additional Rs 249 crore expected by March 2026. Himachal Pradesh State Electricity Board Limited (HPSEBL) operates 28 hydro projects (589 MW), generating 1,973 million units (MU) up to Dec 2025, projected to exceed 2,200 MU by March 2026.Major ChallengesHimachal Pradesh faces several pressing economic challenges. Capital expenditure has been declining due to limited revenue sources and a reduction in central assistance, including discontinuation of the revenue deficit grant (RDG), which earlier contributed nearly Rs 8,000 crore annually. Over the past four years, the state has incurred losses of about Rs 46,000 crore due to natural disasters, amounting to nearly 4% of its GSDP each year. The Rs 4,500-crore apple industry has also been adversely affected by reduced snowfall and fewer chilling hours. Apples contribute around 76% of horticulture gross value added (GVA) and occupy nearly half of the total fruit cultivation area, indicating a high level of sectoral dependence.The economic survey further points to a youth unemployment rate (ages 15-29) of 16.3%, which is significantly higher than the national average of 10.2%. While the manufacturing and utilities sector account for a substantial share of GSVA, they employ only 22% of the workforce. In contrast, the agriculture or primary sector contributes just 14.3% of GSVA but provides employment to 53.9% of the workforce, reflecting structural imbalances. Additionally, salaries, pensions and interest payments together make up 57.59% of the state govt’s total expenditure, estimated at Rs 33,697 crore for financial year 2025-26. The reintroduction of the old pension scheme has further increased long-term fiscal liabilities. MSID:: 129701512 413 |
