Himachal Pradesh to Clock Negative Growth of 6.2% in FY21 Due to Pandemic: Eco Survey

Shimla: Himachal Pradesh is expected to register a negative growth of 6.2% in the current financial year 2020-21, due to the adverse impact of COVID-19 pandemic, according to the Economic Survey tabled in the State Assembly on Friday.

The per capita income of the state at the current prices is estimated to drop by 3.7 per cent to Rs 1,83,286 for fiscal year 2020-21, the survey showed.

The state Budget for 2021-22 will be presented on Saturday.

Tabled by the chief minister Jai Ram Thakur in the Assembly, the survey pegged a negative growth of 6.2% for the state in the current financial year 2020-21 as coronavirus-related disruptions affected economic activities.

The growth rate for 2019-20 stood at 8.9%, for 2018-19 it was 7.1 %, for 2017-18 it was 6.8% and for 2016-17 it was 7%.

Per capita income at current prices for 2019-20 is estimated to be Rs 1,90,407 against Rs 1,76,460 for 2018-19, a growth of 7.9% 2019-20 as compared with 6.6% during 2018-19.

The worst affected sector due to COVID-19 was tourism, which saw a contraction of 81.33% in foreign and domestic tourist arrivals in 2020.

The trade, hotel and restaurant sector showed a contraction of 9.2% during 2020-21, against a growth of 4.6% in 2019-20.

Transport by other means, namely, road transport (mechanised and non-mechanised), water transport, air transport and services incidental to transport, too showed a negative growth of 28% during 2020-21, against 5.6% growth during 2018-19.

In agriculture and allied sectors, a contraction of 3.1% has resulted due to a decrease of 43% in horticulture production during 2020-21. The share of Agriculture and allied sectors, a key sector that supports 60% of the population in gross value added (GVA) of the state at per cent in 2020-21.

In the state, the highest consumption of power (58% of total power consumption) was reported by industries, while domestic consumption stood at 24%.

Manufacturing sector showed a contraction of 14.2% during 2020-21, against a positive growth rate of 0.3% in 2019-20. The mining and quarrying sector showed a negative growth of 18.4% during 2020-21, against 4.3% growth in 2018-19.

The survey further said that Micro, small and medium enterprises (MSME) comprise 99% of the industrial sector and around 93% of total employment generation of the industrial sector is from the MSME sector.

In Himachal Pradesh, inflation has been moderate since 2014, Consumer Price Index-combined (CPI-C) inflation was 4.4% in 2015-16 and 3.5% in 2019-20. In the current financial year, during the months of April-December, 2020, CPI-C was 5.3% as compared to 2.5% for the same period in 2019-20.

In the current Financial Year (2020-21), during April-December 2020, CPI-Rural and CPI-Urban indices were 4.8 and 7.6%, respectively, as compared with 2.0 and 4.7% in the corresponding period of 2019.

The expenditure for the social services sector as a proportion of Gross State Domestic Product (GSDP) increased to 10.89% from 7.68%, during the period 2014-15 to 2020-21.

Expenditure on education increased from 4.12% in 2014-15 to 5.31% in 2020-21, and in health from 1.25% to 1.93% in the same period.

The share of expenditure on social services out of total budgetary expenditure has increased to 34.68% in 2020-21, from 25.73% in 2014-15.

The pandemic brought forth the inherent strengths of the medical fraternity in effectively managing the spread of the disease. As of February 19, 2021, a total of 58,344 COVID positive cases were reported in Himachal Pradesh. Recovery rate at 97.8% is high, but sadly, 981 lives were lost. To combat this pandemic, Himachal has so far administered 1,58,939 vaccine doses.

As per budget estimates, the revenue receipts of the government for the year 2020-21 are estimated to be 24.56% of the GSDP against 19.86% in 2019-20. Similarly, the tax revenue for the year 2020-21 is estimated to be 9.81% of GSDP as compared to 7.79% in 2019-20.

Non-tax revenue witnessed a marginal increase to 1.54% of the GSDP in 2020-21 as compared to 1.46% during 2019-20. Fiscal deficit is estimated to be 4.65% of the GSDP in 2020-21 as compared to 6.53% in 2019-20.

Further, the survey highlighted the Periodic Labour Force Survey (PLFS) Report for 2018-19. This showed that Labour Force Participation Rate has increased from 49.1% in 2017-18 to 52.8% in 2018-19.