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‘Himachal to register negative growth of 6.2% this fiscal’, says economic survey

The worst affected sector due to Covid-19 was tourism, which saw a contraction of 81.33 per cent in foreign and domestic tourist arrivals - from 1.72 crore in 2019 to 32 lakh in 2020. Only 43,000 foreigners visited the state last year as compared to 3.8 lakh in 2019.

By: Express News Service | Shimla |
Updated: March 6, 2021 12:10:53 pm
‘Himachal to register negative growth of 6.2% this fiscal’The survey further said that Micro, small and medium enterprises (MSME) comprise 99 per cent of the industrial sector and around 93 per cent of total employment generation of the industrial sector is from the MSME sector. (PTI/File)

Himachal Pradesh is expected to register a negative growth of 6.2 per cent in the current financial year 2020-21, with two of its key sectors – tourism and horticulture – suffering heavy losses due to the adverse impact of Covid-19 pandemic, according to the Economic Survey tabled in the Assembly 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 this fiscal, the survey showed.

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

Tabled by Chief Minister Jai Ram Thakur, the survey pegged a negative growth of 6.2 per cent for the current fiscal. The growth rate for 2019-20 stood at 8.9 per cent, for 2018-19 it was 7.1 per cent, for 2017-18 it was 6.8 per cent and for 2016-17 it was 7 per cent.

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

The worst affected sector due to Covid-19 was tourism, which saw a contraction of 81.33 per cent in foreign and domestic tourist arrivals – from 1.72 crore in 2019 to 32 lakh in 2020. Only 43,000 foreigners visited the state last year as compared to 3.8 lakh in 2019. Tourism makes up around 7 per cent of the state GDP.

The trade, hotel and restaurant sector showed a contraction of 9.2 per cent during 2020-21, as against a growth of 4.6 per cent 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 per cent during 2020-21, as against 5.6 per cent growth during 2018-19.

In agriculture and allied sectors, a contraction of 3.1 per cent has resulted due to a decrease of 43 per cent in horticulture production during 2020-21.

The share of Agriculture and allied sectors, a key sector that supports 60 per cent of the population in gross value added (GVA) of the State at current prices, has declined from 15.89 per cent in 2015-16 to 13.62 per cent in 2020-21.

The total fruit production fell from 8.45 lakh tonnes in 2019-20 to 4.81 lakh tonnes this fiscal till December, a decline of 43 per cent, the survey said.

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

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

The survey further said that Micro, small and medium enterprises (MSME) comprise 99 per cent of the industrial sector and around 93 per cent 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 per cent in 2015-16 and 3.5 per cent in 2019-20. In the current financial year, during the months of April-December, 2020, CPI-C was 5.3 per cent as compared to 2.5 per cent for the same period in 2019-20.

In the current fiscal, during April-December 2020, CPI-Rural and CPI-Urban indices were 4.8 and 7.6 per cent, respectively, as compared to 2.0 and 4.7 per cent 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 per cent from 7.68 per cent, during the period 2014-15 to 2020-21.

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

The share of expenditure on social services out of total budgetary expenditure has increased to 34.68 per cent in 2020-21, from 25.73 per cent 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 per cent 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 per cent of the GSDP as against 19.86 per cent in 2019-20. Similarly, the tax revenue for the year 2020-21 is estimated to be 9.81 per cent of GSDP as compared to 7.79 per cent in 2019-20.

Non-tax revenue witnessed a marginal increase to 1.54 per cent of the GSDP in 2020-21 as compared to 1.46 per cent during 2019-20. Fiscal deficit is estimated to be 4.65 per cent of the GSDP in 2020-21 as compared to 6.53 per cent 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 per cent in 2017-18 to 52.8 per cent in 2018-19.

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