HIMACHAL PRADESH

December 2020 For updated information, please visit www.ibef.org 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

• is one of the • Himachal Pradesh has a rich heritage of fastest-growing states in . Its handicrafts. These include woollen and per capita Gross State Domestic 5 pashmina shawls, carpets, silver and Product (GSDP) reached Rs. 1.65 1 metal ware, embroidered chappals, trillion (US$ 22.58 billion) in 2019-20. 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 • 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 3 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 government introduced ‘Himachal estimates. Pradesh Tourism Sector Policy 2019’ to position the state as a leading global sustainable tourism destination for inclusive economic growth. 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.

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, 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 • GSDP (in Rs.) grew at a Compounded Annual Growth has a large pool of semi-skilled and unskilled labour. Rate (CAGR) of 9.71% between 2015-16 and 2019-20. • 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 as a percentage of all states’ GSDP GSDP Installed power capacity (MW) (as of November 2020) India: 100.0 | Himachal Pradesh: 1.08 India: 3,74,199 | Himachal Pradesh : 4,018.87

GSDP growth rate* (%) Wireless subscribers (million)** (as of June 2020) India: 11.5 | Himachal Pradesh : 8 India: 1,140.71 | Himachal Pradesh : 10.74

Per capita GSDP* (US$) Internet subscribers (million)** (as of June 2020) India: 1,982.65 | Himachal Pradesh : 3,081.45 India: 749.07 | Himachal Pradesh : 6.08

National highway length (km) (as of September 2019) Social Indicators India: 132,499.5 | Himachal Pradesh : 2,606.9

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 , 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 1.8 3,500 240000 CAGR (in Rs.) 9.71% CAGR (in Rs.) 9.03% 1.6 3,000 210000 20 1.65 1.4

22.58 180000 225,839 3,081 1.54

2,500 3,024 21.47 2,968 21.32

1.2 211,325 15 1.38 150000 2,597 18.73 191,278 1.26 1 2,000 2,442 17.45 174,249 1.14 120000

0.8 159,842 10 1,500 90000 0.6 1,000 60000 5 0.4 0.2 500 30000 0 0 0 0 2015-16 2016-17 2017-18 2018-19 2019-20 2015-16 2016-17 2017-18 2018-19 2019-20 US$ Rs. US$ billion Rs. trillion . At current prices, the Gross State Domestic Product of Himachal Pradesh reached Rs. 1.65 trillion (US$ 22.58 billion) in 2019-20. . The state’s per capita GSDP in 2019-20 was Rs. 225,839.22 . The state’s GSDP (in Rs.) increased at a Compound Annual (US$ 3,203.85). . Growth Rate of 9.71% between 2015-16 and 2019-20. . rThe pe capita GSDP (in Rs.) increased at a CAGR of 9.03% . Under the state’s Budget 2020-21, GSDP for 2020-21 (at current between 2015-16 and 2019-20. prices) is projected to be Rs. 1,82,020 crore. This is 10% higher than the revised estimates for 2019-20.

Note: BE- Budget Estimate 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 1.6 3,000 210000 CAGR (in Rs.) 10.24% CAGR (in Rs.) 9.56% 1.4 180000 20 2,500 2,770 1.43 1.2 2,620 195,255 2,561 1.33 150000

2,000 183,108 20.30 1 1.19 19.07 15 2,240 18.52 165,025 120000 1.08 2,070

0.8 1,500 150,290 16.15 0.97 135,512

14.80 90000 10 0.6 1,000 60000 0.4 5 500 0.2 30000

0 0 0 0 2015-16 2016-17 2017-18 2018-19 2019-20 2015-16 2016-17 2017-18 2018-19 2019-20

US$ billion Rs. trillion US$ Rs.

. At current prices, the total Net State Domestic Product of . The state’s per capita NSDP in 2019-20 was Rs. 195,254.77 Himachal Pradesh reached Rs. 1.43 trillion (US$ 20.30 billion) (US$ 2,769.96). in 2019-20. . The per capita NSDP (in Rs.) increased at a CAGR of 9.56% . The state’s NSDP (in Rs.) increased at a CAGR of 10.24% between 2015-16 and 2019-20. between 2015-16 and 2019-20.

Note: exchange rates used are averages of each year Source: Directorate of Economics & Statistics of Himachal Pradesh, MOSPI

10 Economic Snapshot – % Distribution Of GSDP

. During 2019-20, tertiary sector accounted for 43.88% share of the VisakhapatnamGSVA Composition port traffic by(million Sector tonnes) state’s Gross Service Value Added (GSVA), followed by secondary and primary sectors at 42.90% and 13.22%, respectively. 100% 39.03% CAGR 43.88%

. Tertiary sector witnessed the fastest growth at a CAGR of 12.02% 90% 12.02% between 2011-12 and 2019-20. 80%

. Secondary sector in the state expanded at a CAGR of 10.10% 70% between 2011-12 and 2019-20. Primary sector grew at a CAGR of 60% 6.85% during the same period. 43.81% 42.90% 50% 10.10% 40%

30%

20% 17.16% 6.85% 10% 13.22%

0% 2011-12 2019-20

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 3 Year IEMs filed investments (in US$ million)

3 0.31 2.40 2016 9 147.5 0.62 2 2017 6 17.6

0.11 2018 17 75.78 2 0.09 0.04 0.03 0.01 0.13 0.05 1.02 2019 15 49.36 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 . YFor F 2020, (up to July 2020), five investment intentions were filed

FY00-FY11 FY00-FY20 in Himachal Pradesh with a proposed investment value of Rs. 47 crore (US$ 6.41 million). Annual FDI Inflow

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

Note: ^ - including Chandigarh, Punjab and Haryana 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 919.42 800.00 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.

. InY F 21*, 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 has constructed 38,984 kms. of motorable roads (inclusive of jeepable and track) as of November 2019.

. At present, 2,592 kms. of 19 National Highways are the main lifelines of the state road network.

. As per the State Budget 2020-21, an outlay of Rs. 1,912 crore (US$ 260.7 million) has been proposed to construct roads and bridges.

. In addition, under the rural development sector, Rs. 394 crore (US$ 53.7 million) has been allocated towards the Pradhan Mantri Gram Sadak Yojana and Rs. 55 crore (US$ 7.5 million) has been allocated to the Mukhya Mantri Gram Sadak Yojana. . In September 2020, the -Mataur highway, one of Himachal Pradesh’s primary national highways set for four-laning, was Source: Maps of India 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 in Pradhan Mantri Gram Sadak Yojana (PMGSY) in 2019-20 Himachal Pradesh with , that will criss-cross a number of high-altitude snow-bound passes, has been expedited and is Target Habitations 115 expected to be completed by the end of 2022. Target Length (km) 3,015 . In October 2020, the at Rohtang in Himachal Pradesh was inaugurated by Prime Minister, Mr. Narendra Modi. The 9.02 Habitations Connected 60 km long tunnel, passes through the , is the world's longest highway tunnel, linking Manali with the Lahaul-.

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

15 Physical infrastructure – Railways

. Himachal Pradesh falls under the Northern Railways network.

. There are only two narrow gauge railway lines connecting Shimla with Kalka (96 kms.) and Jogindernagar with Pathankot (113 kms.) and one 33 kms. broad gauge railway line from Dam to Charuru in District Una upto December,2019.

. 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- 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

. Theree ar 3 airports in Himachal Pradesh - at (Bhuntar), Kangra (Gaggal) & Shimla (Jubbar Hatti).

. The state Government has identified 3 sites at in the 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% 4,300 Hydropower

4,200 4,463.00 24% 4,100 Renewable Power 4,000 Thermal Power 3,900 70% Nuclear Power

3,800 4,068.13 4,038.68 4,018.87 3,700 3,892.72 3,600 2016 2017 2018 2019 2020*

. As of November 2020, Himachal Pradesh had a total installed power-generation capacity of 4018.87 MW, comprising 1466.53 MW under central utilities, 1601.13 MW under private utilities and 951.21 MW under state utilities .

. Of the total installed power generation capacity until November 2020, 2812.88 MW was contributed by hydropower, 213.70 MW by thermal power, 963.34 MW by renewable power and 28.95 MW by nuclear power.

. 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.

Note: MW- megawatt * - as of November 2020 Source: Central Electricity Authority, Himachal Pradesh Economic Survey 2020-21, State Budget 2020-21

18 Physical infrastructure – Telecom

Telecom Statistics (as of June 2020) Performance of Bharat Net

Wireless subscribers 10,737,183

Wireline subscribers 93,646 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 10.74 million wireless subscribers and 93,646 wire-line subscribers as of June 2020.

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

. By end-August 2020, 2.53 million subscribers had submitted request for mobile number portability in Himachal Pradesh.

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

19 Physical infrastructure – Urban

. Under the State Budget 2020-21, the highest increase in allocations Cities under Smart Population Area (sq km) was observed in water supply, sanitation, housing and urban Cities Mission development at 33% of the overall budget. 22,580 29.51 . Rs . 343 crore (US$ 46.78 million) has been allocated towards Jal Shimla 269,578 5131 Jeevan Mission. Rs. 108 crore (US$ 14.73 million) will be spent on the Greater Shimla Water Supply scheme and Rs. 100 crore (US$ 13.64 million) has been allocated towards the Smart City mission. . In Himachal Pradesh, Dharamshala and Shimla have been . In October 1, 2020, Himachal Pradesh Urban Development Minister, selected to be developed as smart cities under the smart city Mr. Suresh Bhardwaj, reviewed the Mukhya Mantri Shahri Ajeevika scheme of the central Government. Guarantee Yojana (MMSAGY) and Deendayal Antyodaya Yojana - . Under the smart city scheme, 24 hours persistent water and power National Urban Livelihoods Mission (DAY-NULM) schemes and said supply would be provided to the city. that both schemes are related to employment and will pave the way . for Aatmanirbhar Bharat. Under the Smart City Mission (SCM), six projects were completed, and 11 additional projects were initiated in Dharamshala, out of the • He further highlighted that in FY2020-21, Rs. 1.54 crore (US$ 0.21 74 proposed projects in FY2019-20. 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.

. The government has constructed 10,000 houses during the last 2.5 years under various housing schemes in the state. Himachal Pradesh was the only state in the country that provided Rs. 1,50,000 to each beneficiary for constructing the house. The project is supported by the Pradhan Mantri Awas Yojna (Urban) scheme.

Source: JNNURM, Ministry of Urban Development, Rajyasabha, Economic Survey 2019-20, State Budget 2019-20

20 SOCIAL INFRASTRUCTURE

21 Social infrastructure – Education

. Under the State Budget 2020-21, the government has proposed an AICTE Approved Education Statistics (2020-21) outlay of Rs. 8,304 crore (US$ 1.13 billion) for the education sector.

. As per the State Budget 2020-21, under the Swaran Jayanti Gyanodaya Cluster Sreshtha Vidyalaya Yojana, Rs. 15 crore (US$ Undergraduate Postgraduate Diploma 2.05 million) has been allocated towards providing modern facilities such as smart classrooms in 100 cluster schools and improving the pupil-teacher ratio. Other initiatives included are as follows: Total 28 17 30 Institutions • Under the Swaran Jayanti Utkrisht Vidyalaya Yojana, Rs. 30 crore has been allocated to improve facilities such as furniture, sports facilities and labs in 68 schools in the first phase. Total 3,980 974 5,060 • Encourage meritorious youth to take admission into professional Intake courses under the Swaran Jayanti Super 100 scheme.

. In 2020-21, Himachal Pradesh had a total of 58 AICTE-approved institutes. Faculties 1,634 164 135 . In October 2020, the ‘Strengthening Teaching-Learning and Results for States’ (STARS) project under the new education policy was approved by the Union Cabinet, chaired by the Prime Minister, Mr. Narendra Modi, to assist states in strengthening the school education system. States such as Himachal Pradesh, Rajasthan, Maharashtra, Madhya Pradesh, Kerala and Odisha will be covered under the scheme. The project is funded by the World Bank and is estimated to cost Rs. 5,718 crore (US$ 775.28 million).

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

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

. According to the State Budget 2020-21, under the Health and Family Welfare sector, Rs. 1,715 crore (US$ 233.9 million) will be spent on salaries and wages and Rs. 334 crore (US$ 45.5 million) has been allocated towards the National Rural Health mission. Other initiatives included are as follows: • Mammography facility in all district hospitals to fight breast cancer, prevention and awareness about cervical cancer will be established under the Swasth aur Sashakat Kishoritav evam Matritva (SKM) scheme. • IT system to provide unique health ID to all citizens under the HIMAROGYA scheme. • 10 new mobile health centres to provide healthcare services in remote areas. • Free treatment will be provided to all citizens, including diagnostic to destitute persons left without identity and attendant in hospitals under the Samman scheme.

. 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.

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. . For development of industrial infrastructure, the state Government has planned the following under the state budget 2018-19: • No electricity duty on new small and medium industries for first five years • New e-stamping system to be launched • All tenders above Rs. 500,000 (US$ 7,723) will be carried out on e-Procurement portal • Lease on industrial plots increased from to be given for 90 years, up from 30 years at present • Industrial areas of Kandrori and Pandoga to be completed on priority

Attracting Investments Infrastructure Description Set up at , Barotiwala, , Kala Amb, Paonta . A ‘Global Investors Meet’ was organised at Industrial areas Sahib, Mehatpur, Tahliwal, Amb, Sansarpur Terrace, Golthai, Dharamshala, Kangra in November 2019 to attract etc. investors in Himachal Pradesh in various sectors. Baddi Barotiwala The industrial area has been promoted by the Ministry of Industrial Commerce and Industries, Government of India. It has emerged . Against the target of Rs. 85,000 crore (US$ Area as a hub for textiles, pharmaceuticals and packaging industries. 11.59 billion), 703 MoUs worth Rs. 96,000 crore The Government has proposed to set up a biotechnology park Biotechnology Park (US$ 13.09 billion) were signed by the investors, at Nalagarh. A nanotechnology park is proposed to come up on a 400-acre who wished to set up their projects in Himachal. Nanotechnology Park area near the Biotechnology Park at Aduwal near Nalagarh. . Himachal Pradesh also organised its first An ICD is being developed at Baddi for the benefit of exporting industries through the Container Corporation of India. A groundbreaking ceremony at Shimla in December Inland Container Memorandum of Understanding (MoU) has been signed Depot (ICD) 2019 for 251 projects amounting to Rs. 13,600 between the Himachal Pradesh Government and Container crore (US$ 1.85 billion). Corporation of India.

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

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 , 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 , 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 , 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) Area and production of horticulture crops (2019-20)

2,800 Area Production 2,700 Year 2,709 2,723 (‘000 Ha) (‘000 MT) 2,600 Fruits 232.14 828.23 2,500

2,452 Vegetables 90.94 1856.80 2,400 2,431 2,404 2,375 2,300 Spices 7.21 13.58

2,200 Honey - 5.40 FY15 FY16 FY17 FY18 FY19^ FY20^

. Agriculture is a key livelihood for the people of Himachal Pradesh and holds a significant share in the state’s economy. In 2019-20, the total production of horticulture crops in the state was expected to be 2722.80 thousand metric tonnes and area under production was 332.12 thousand hectares. In 2019-20, the total production of vegetables and fruits in the state was estimated at 1856.80 thousand metric tonnes and 828.23 thousand metric tonnes, respectively. . As per State Budget 2020-21, Rs. 50 crore (US$ 6.8 million) has been allocated towards subsidy to install anti-hail nets and Rs. 25 crore (US$ 3.4 million) has been allocated towards the Prakritik Kheti Khushal Kissan scheme. . 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 2019-20, 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 . With suitable agro-climatic conditions, Himachal Pradesh has realised the importance of commercial crops, including off-season Category Districts

vegetables, potatoes and ginger. The state is one of the largest Dairy products and Shimla, Mandi, Bilaspur, Kullu, Kangra, producers of off-season vegetables and exotic fruits and the second analogues Solan, Hamirpur, Una, Sirmaur largest producer of apples and almonds in the country. Spices Mandi, Bilaspur, Shimla

. The food processing industry primarily focuses on the areas of Prepared Foods Kangra, Mandi, Hamirpur traditional processing of agricultural and horticultural raw materials. Cereals and cereal Solan, Hamirpur, Kangra, Kullu, Kangra products . Agri-procurement has lately been an investment area for corporate entities. Ready to eat Hamirpur, Solan, Kangra

Solan, Kangra, Una . Under the State Budget 2020-21, the government has allocated 6% Pickle, Jam Squash of its total expenditure towards agriculture and allied activities.

. 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 is one of the fastest-growing regions in the pharmaceutical industry in India, driven by incentives announced by Exports of drug formulations and biologicals the state Government in its Industrial Policy, 2004. Baddi is one of 900.0 the largest pharmaceutical hubs in Asia and the world. 800.0 822.0 . The Department of Environment, Science & Technology (DEST), 700.0 Government of Himachal Pradesh, proposes to develop a 702.9 600.0 Biotechnology Park (BTP) spread over an area of 35 acres at 626.1 500.0 Aduwal in Solan under PPP mode in the state. 533.4 400.0 450.1 . The Union Finance Ministry is actively considering to allocate Rs. 300.0 352.8 1,000 crore (US$ 136.5 million) for the development of a 2,000-acre bulk drug park at Nalagarh area in Baddi, Himachal Pradesh. 200.0 100.0 . The Ayurvedic Department has three ayurvedic pharmacies at - 0.0 Jogindernagar District Mandi, Majra District Sirmaur & Paprola FY16 FY17 FY18 FY19 FY20 FY21* District Kangra. The 4 herbal gardens of the state are located at - Jogindernagar (Mandi), Jungle Jhalera (Bilaspur), Neri (Hamirpur) & Dumreda (Shimla). Some of the key players

. InY F 20, exports of drug formulations and biologicals from the state . Ranbaxy Laboratories Ltd stood at US$ 822.0 million and have reached US$ 626.1 million in . Cipla Ltd FY21 (until October 2020). . Dr Reddy's Laboratories Ltd

. 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)

19.50 500 19.00 450 471 453 18.50 400 19.13 18.00 350 383 356 17.50 300

17.00 17.99 250 16.50 200 150 16.00 16.83 15.50 100 15.00 16.09 50 14.50 0 2016 2017 2018 2019 2016 2017 2018 2019

. 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 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. . Sustainable Tourism Policy, 2013 was formulated for promoting sustainable tourism without damaging the ecology and environment. . 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 2019-20

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 Window Clearance and senior-most officers of departments concerned in the district as 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 District-level Single Authority. 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

Udyog Bhawan Shimla Himachal Pradesh Industries Department Phone: 91-177-2813414 E-mail: [email protected] Website: https://emerginghimachal.hp.gov.in

4th & 5th Floor, New Himrus Building Cart Road Shimla Himachal Pradesh State Industrial Phone: 91-177-2624751, 2621426 Development Corporation Limited Fax: 91-177-2624278 E-mail: [email protected] Website: http://www.hpsidc.nic.in

38 Key approvals required … (1/2)

Approvals and clearances required Departments to be consulted

Prior to setting up the unit

Registration District Industry Centre for SSI or Large and Medium Industries

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 and Himachal Pradesh State Pollution Control Board Air Act

Approval for construction activity and Town and Country Planning Authority building plan

Site environmental approval State Pollution Control Board and Ministry of Environment and Forests

Provisional trade tax registrations Central and State Excise Departments

Registration under Central Sales Tax Act Central and State Excise Departments

Source: Commissionerate of Industries, Government of Himachal Pradesh

39 Key approvals required … (2/2)

Approvals and clearances required Departments to be consulted

Before commencement of production

No Objection Certificate under Water and Himachal Pradesh State Pollution Control Board 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 Act Central and State Excise Departments

After commencement of production/activity

Department of Industries and respective sector departments such as Information Registration 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 . In September 2020, Himachal Pradesh government announced that National Education 1 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 employment opportunities, income generation and overall economic development of the 2 state. Read more

Himachal Pradesh Tourism Policy 2019 . To make tourism sustainable with prime focus on socio-economic growth and employment generation. 3 Read more

IT, ITeS and ESDM Policy 2019 . 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. 4 Read more

AYUSH Policy 2019 . To establish a strong and well-designed network of AYUSH services in the state providing easily accessible, affordable and equitable healthcare delivery system to the 5 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

Note: As of December 2020 Source: Reserve Bank of India, Average for the year

45 Disclaimer

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