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Himachal Pradesh: A Profile
A brief overview of the evolution of Himachal Pradesh as a state, its geographical location and economy, can provide the background to issues discussed in the State
Development Report of Himachal Pradesh This chapter places the state in the national context and also deals with the problems of its intra-regional disparities,
resources and the physical, social and economic infrastructures necessary for its all round development.

The history of human settlement in Himachal Pradesh goes back to the palaeolithic period of which stone tools and flakes have been discovered in the valleys
of the Sutlej and Beas rivers and also in the foothill zone of the Shivalik hills. Numerous tribes settled in ditferent parts of the region. The recorded history begins with effect from the Maurya period, that is 4“ Century B.C., when this part of India was an outlier of Chandragupta’s kingdom.

Throughout its history, the present territory of Himachal Pradesh remained segmented into a number of principalities, usually under the hegemony of an empire centered at Delhi. The area has also been a refuge for several freedom-loving population groups/castes, particularly Rajputs and Brahmins who refused to live under the imperial authority centered at Delhi. They settled in specific parts of this region, which took the form of small/tiny states under the chiefdom of Rajput princes. The colonial empire brought them under the hegemony of the British Crown in 1859. They continued enjoying a degree of autonomy but were essentially in the nature of feudatory states. On the eve of Independence of India, half of the present territory of
Himachal Pradesh was divided into 30 princely states and the other half was a part of the Punjab province of the British Empire. I-Iimachal Pradesh acquired its present
disposition in phases over time afier independence. Himachal now is one of the most dynamic hill states of India. It scores significantly high on indicators of human development. Its resources of forests, fruits, minerals, health resorts, and hydel power hold the promise of great progress. Natural assets for tourism in the state are ideal.
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It has its own rich culture, physiography suited to almost all types of crops and
fruits, and an independent administrative identity. Its notable accomplishments have been in literacy, agriculture, horticulture, roads, forests, hydel power generation and tourism. The state is called ‘the apple belt’ of India. Its vast potential for hydel power
generation, because of its locational advantage, has attracted the attention of the entire nation, as a major resource awaiting full exploitation. Its physical diversity, its climate and its peaceful environment can derive high economic value from the development of the tourist industry.

Himachal Pradesh in the National Context Himachal Pradesh with an area of 55,673 sq. km. is one of the smaller states of India (Table 1.1). It ranks 17″‘ among the States and Union Territories in terms of area, which is one-sixth of the largest state –
Rajasthan. With a population of 60.8 lakh, Himachal Pradesh ranks 21“ among the States and Union Territories. That its population is 27 times below that of the most populous state, Uttar Pradesh, is an indicator of its smallness.
The state accounted for 1.7 per cent of the total area
ofthe country and 0.59 per cent of the total population
in 2001. With a density of 109 persons per sq. km., it
ranks 28″‘ among the states and Union Territories
which is much below the all-India average of 324
persons per sq. km.
The urban population constitutes 9.79 per cent of
the total population of the state, the lowest among all
States and Union Territories. Almost eight out of every

40
TABLE 1.1
HlMACHAL PRADESH DEVELOPMENT REPORT
Status of Himachal Pradesh on Selected Parameters in India, 1999-2001
States/Union Territories
Ar2a”(i*1 sq km) Population“
Density” Urban Populaiiorr‘ Literate“
(persons per rm per cent) (in per win
SI]. km.)
‘
, and it ranks 11‘h in
terms of literacy.
Evolution of the State
Historically, Himachal Pradesh has not only
experienced different stages of social transformation,
but has also seen many changes in its size and
administrative structure. Comprising 30 princely states,
it came into existence as a Chief Commissioners
Province in 1948, and graduated through a number ot
stages of administrative transformation to a full-fledged
state of the Indian Union in 1971. To start with, it
consisted of four districts — Chamba, Mahasu, Mandi
and Sirmaur. Under the rule of the princes, this region
suffered from the worst kind of feudal exploitation. The
rulers did not consider it necessary to develop their
territories, by utilising the available wealth of natural
resources (M.G. Singh, 1985), Since its formation

Chapter 1 .

PRADESH: A
PROFILE

q/Census Operation-Y I-Iimachal Prade
sh.
Chapter 1 HIMACHAL PRADESH: A PROFILE
Himachal has, however, attained a high level of overall
development.
The changes in size and the administrative structure
that the state has gone through between 1948 and
1971 have influenced the level and pace of its
development. Himachal inherited a primitive economic
system from its feudal structure, and an inadequate
institutional framework, which constituted a weak base
for socio-economic development. Thus, at the initial
stages the state was at a disadvantage in relation to the
rest of the country in pursuing the process of
development. In this context, the institutional task of
setting up an integrated administration, transforming a
feudal system into a modern democratic one,
necessitating the abolition of all feudal practices and
laws, was certainly fairly difficult (L.R. Sharma, 1985).
The merger of the princely state of Bilaspur in 1954
enlarged the geographical area of Himachal Pradesh and
increased the number of its districts to five. In 1960, a
new district of Kinnaur was carved out of Mahasu
district.
The states reorganisation of 1966 transferred parts of
Punjab (Ambala, Hoshiarpur and Gurdaspur) to
Himachal Pradesh, adding three more districts, namely,
Kangra, Kullu, and Lahaul and Spiti. These areas were
under the direct administration of the British
Government before independence and were far behind
the other progressive regions of Punjab and failed to
achieve substantial economic development, until their
integration with Himachal Pradesh (M.G. Singh, 1935).
On 25 January 1971, the state was granted full-
fledged statehood. Una and Hamirpur districts were
carved out of Kangra district and Mahasu district was
divided into Shimla and Solan districts on September 1,
1972. The people of the state classify themselves into
two sub-regional identities: the old Himachal Pradesh
and the new Himachal Pradesh. The erstwhile princely
states constitute the old Himachal and territories that
were earlier part of Punjab, form the new areas. The
former is less developed than the latter.
There has been no change in the number of districts
since 1972, even though there are substantial variations
in area and population of the districts. Lahaul and
Spiti, with an area of 13,835 sq, km. is the largest
district. It contains 24.85 per cent of the state’s area
followed by Chamba with 11.72 per cent (Table 1.2).
Hamirpur with 2.01 per cent of the area of the state is
at the bottom with Bilaspur (2.1 per cent) coming next.
However, these rankings become totally different, once
the population is taken into account. Lahaul and Spiti,
43
which occupies the first place in terms of area, is
relegated to the last position with a population of
33,224, Kinnaur with 83,950 coming next. Chamba, the
second largest in area, occupies the fifth position in
terms of population. Almost half the population lives in
three districts — Kangra, Mandi and Shimla and the
bottom three districts of Lahaul and Spiti, Kinnaur and
Bilaspur, share 7.54 per cent of the state’s population.
These variations in the land-man ratio are reflected in
the density of population. The low density of
population in the larger districts is due to the limited
arable land, unfavorable physio-geographical conditions,
poor means of transport and communication, hostile
climate and the low level of economic development.
TABLE 1.2
District—wiseStatus of Social Parameters in Himachal Pradesh, 2001

SOHVUK’. Census 0/ India, Z001, P/z1v1siur1uIPupuIaliun Totals, Paper I of Z001,
Himachal Pradesh, Dlraiornle 0/ Census Operations Himachal Pradesh.
Nora. M – Based on projected population, N.A. _ Not available
Shimla with a population of l,44,578 is the only
class 1 town (with a population of more than l,00,000)
in the state. Lahaul and Spiti and Kinnaur districts
have no urban centres. The pattern of urbanisation in
Himachal Pradesh is different from that of the
neighbouring states of Punjab and Haryana. Its
undulating topography prevents the development of big
towns and is more conducive to smaller towns. One-
fourth of the state‘s urban population lives in Shimla
and 31 per cent in Class V and Class VI towns. Shimla,
Solan and Kangra districts together share half the
urban population of the state.
Hamirpur district with 83 per cent of literates is at
the top of the literacy chart, closely followed by Una

44
(81.1 per cent) and Kangra (80.1 per cent) while
Chamba with 64 per cent literates is at the bottom.
The state is a linguistic unit inhabited by Hindi
speaking people. It had a population of 60.7 lakh in
2001 distributed in 20,729 villages and 57 towns.
Administratively, it is divided into 12 districts, 75 tehsils
and 75 blocks. The city of Shimla is the capital of the
state.
Physical Setting
The state took its name Himachal from the
Himalayas. Himachal Pradesh is a hilly and
mountainous state situated between 30° 22′ and 33° 12′
north latitude and 75“ 47′ and 79° 4′ east longitude.
Its neighbours are Jammu and Kashmir in the north,
Punjab in the west and southwest, Haryana and Uttar
Pradesh in the south and Tibet in the east. The
territory of the state is mountainous, except for a few
pockets bordering Punjab and Haryana, which have a
sub-mountainous topography, Altitude in different
areas ranges from 350 to 7000 metres above the mean
sea level. Wide differences in geo-physical features
account for considerable variation in the climate and
rainfall of different sub-regions of the state.
Physiographically, the state is part of the Himalayan
system. From south to north it can be topographieally
divided into three zones:
l) The Shivaliks or outer Himalayas,
2) Inner Himalayas or mid-mountains, and
3) Alpine zone or the greater Himalayas.
The lower hills of Kangra, Hamirpur, Una, Bilaspur
and the lower parts of Mandi, Solan and Sirmaur
districts are part of the Shivalik range. The altitude of
this zone varies from 350 metres to 1500 metres above
the mean sea level. The annual rainfall varies from 1500
mm. to 1800 mm. Since it is made up of consolidated
deposits, which can erode easily, the zone experiences
deforestation and a high rate of soil erosion. It is
suitable for the cultivation of maize, wheat, ginger,
sugarcane, paddy, table potatoes and citrus fruits.
The altitude of the inner Himalayas or the mid-
mountains ranges between 1500 metres and 4500
metres above mean sea level. This zone includes areas
such as the upper parts of Pachhad and Renuka in
Sirmaur district, Chachiot and Karsog tehsil of Mandi
district, and upper parts of Churah tehsil of Chamba
district. The quality of soil in these areas ranges from
silty loam to clay loam to dark brown colour and is
usefiil for seed potatoes and temperate fruits. From the
HIMACHAL PRADESH DEVELOPMENT REPORT
horticultural point of view, this area is suitable for
stone and soft fruits.
The greater Himalayas or the Alpine zone has an
altitude of 4500 metres above mean sea level. This area
comprises Kinnaur district, Pangi tehsil of Chamba
district and some areas of Lahaul and Spiti. Rainfall is
scanty in this zone. The soil has high texture with
variable fertility. The climate is temperate and semi-
arctic in winter. The climate and the soil are best
suited to the cultivation of dry fruits. From October to
March-April, this zone remains cut off from the rest of
the world.
The climate of Himachal Pradesh varies from semi-
tropical to the semi-arctic depending on the altitude. It
has three seasons, which have an impact on its
economic development. The rainy season lasts from July
to September, winter from October to March and
summer from April to June. During summer, there is
an intlux of tourists to the state both from within the
country and abroad.
Five perennial rivers — Sutlej, Beas, Ravi, Chenab
and Yamuna — flow through the state. The river
system in the Himalayas cannot be exploited for
irrigation as fully as in the plains, but it is the source
of water for the Indus river basin. The undulating
terrain limits the utility of these rivers for irrigation.
During the rains, the flow in the rivers is heavy and in
winter, with snowfall and the water frozen at higher
altitudes, they shrink into narrow streams. These
rivers, however, provide ample scope for the generation
of hydel power.
The diversity of altitude and climate has given
Himachal Pradesh a rich variety of flora. Covering nearly
two-thirds of the total area of the state, forests form an
important source of income, providing raw material for
industries, fodder and nutritious grasses for livestock
and resources to meet the needs of agriculturists and
other people. They are also a source of herbs and drugs.
The physiography of the state also determines its
economic potential. Agriculture in general is
handicapped by the steep and hilly terrain, hazards of
climate, small and scattered holdings, thin stony soil,
limited irrigation and a limited cultivated area, only
about 10 per cent. There is little scope for expanding
the cultivated area. However, the state has overcome
absence of adequate land, by resort to horticulture and
optimal use of the cultivated area.
Despite sufficient resources in particular areas,
Himachal‘s industrial potential is one of the least in
India. Only a small proportion of the population is

Chapter l HIMACHAL PRADESH: A PROFILE
engaged in industry. Its remote location, geographic
Conditions, such as difticult terrain and severe winter,
lack oftransport facilities and other infrastructure, have
thwarted industrial development. However, industry is
gradually picking up, even in these difficult conditions.
There are some additional constraints, associated
with the geographical features and climate of a hilly
region, These are for instance, shorter productive man-
years and lower physical productivity at high altitudes,
and the difficulty in developing alternative means of
transport and communication with the existing
technology.
Economic Development
In this section we have tried to explain the long-
term economic development trends through such
indicators as income-growth, structural composition of
the income, per capita income and poverty.
It is important to have an understanding of the
socio-economic base of the state at the time of its
formation and even before that. Himachal Pradesh
requires a different kind of approach for its economic
development. The hill areas, because of their peripheral
location have been neglected in the past. Himachal
Pradesh was no exception and the state started with
the disadvantage of a weak economic and institutional
base, and a low level of catalytic skills of the people to
provide services such as roads and transport, banking,
medical and health, which can create conditions for
modern development. In fact, I-Iimachal’s surfaced road-
length per one lakh population (8.5 km.) in 1950-51
was the lowest in India. Per capita consumption of
electricity in 1948 was 0.99 kwh as against the national
average of 17.8 kwh (L. R. Sharma, 1987). It was only
after the formation of Himachal Pradesh that the people
and government of this hilly region began to make
concerted efforts to improve their own economic
condition and that of the state (M.G. Singh, I985).
The planning process at the national and the state
level aimed at achieving a more balanced growth. The
attempt through the five year plans has been to give a
boost to economies of states by investing in relatively
backward areas. Himachal Pradesh is one of the eleven
special category states in the country, eligible for such
special assistance.
During the First Five Year Plan, Himachal grew at
an annual rate of 1.6 per cent as against the national
average of 3.6 per cent (Table 1.3). In the Third Plan,
the growth rate was slightly higher at the national
level,
TABLE 1.3
45
Growth Rate of 1-IimachalPradesh and National Economy
During Five Year Plans
Plan Period Himachal All India H.
Pradesh
P./lndi
Ratio
a
First P114
n (1951-56)
Second Plan (1956-61)
Third Plan (1961-66)
Annual Plans
Fourth Plan (1969-74)
Fifth Pla
n (1974-72)
1.6
4.4
3.0
3.0
4.6
0.44
1.07
1.25
0.88
0.88
Annual Plans (1978-79 to 1979-80) 3.6 0.2 18.00
Sixth Plan (1980-85) 3.0 5.3 0.57
Scvcnth Plan (1985-90) 8.8 6.0 1.47
Annual Plan (1990-91) 3.9 5.4 0.72
Annual Plan (1991-92) 0.4 0.8 0.50
Eighth Plait (1992-97) 6.3 6.2 1.02
Ninth Plan (1997-2002) 6.2 5.4 1.15
1997-93 6.4 5.0 1.28
1998-99 7.2 6.6 1.09
1999-O0 6.6 6.6 1.00
2000-O1 (rcviscd) 6.2 4.4 1.41
2001-02 (quick) 5.1 5.6 0.91
Source: E(‘0W0!fliFSMWt{\’. Z002-03. Department of Economics and Statistics.
Himachal Pradesh
Its recognition as a full-fledged state of the Indian
Union in 1971 gave a new direction to the pace of
development in Himachal Pradesh. So far the Union
Government had treated it as any other Union
Territory, from each one of which Himachal differed
greatly in many respects. (Planning Commission, H.P.,
Fourth Plan). The rate of economic growth was slower
than that of the national economy, because the
development of Himachal Pradesh in its initial stages,
required heavy investments in certain fields without
considerations of immediate results. It was visualised
that if those fields were Fully developed, the rest would
follow. In the post-I971 period up to the Sixth Plan
(1980-85), the state economy grew at a slower pace
than the national. Then, as visualised, it picked up and
grew at a rate faster than the national average. In the
Sixth Plan, the rate of growth of the state’s economy
was almost half the national average. By the Seventh
Plan, the scenario had reversed. Economic growth of
the state was almost 1.5 times that of the national
average. In the Ninth Plan, the state’s economy grew at
an annual rate of 6.4 per cent as against 5.4 per cent at
the national level (Figure 1.1).
A comparison of the economic growth with
neighbouring Haryana and Punjab indicated that the

46
FIGURE 1.1
Growth Rate ofl-Iimachal Pradesh and Indian Economy
During Five Year Plans
13. Department of Economics and Statistics.
Himachal Prodesh.
economy of Himachal grew at a relatively faster rate
during the decade of the nineties (Table 1.4) than in
the eighties. In the eighties, the state’s economy grew
at an annual rate of five per cent per annum, which
increased to 6.7 per cent by the nineties. The
corresponding figures at the national level were 5.6 per
cent and 6.8 per cent. During the same decade, the
growth rate in the neighbouring hilly state of Jammu
and Kashmir was lower than that of Himachal Pradesh.
TABLE 1.4
Trends in the Rate of Growth in Gross Domestic Product
in Himachal Pradesh, Neighbouring States and India
During thc Eighties and Ninctics
States I980-81 to 1990-91 1993-94 to 1998-99
Himachal Pradesh 5.0 6.7
Haryana 6.2 5.8
Punjab 5.4 5.0
Jammu and Kashmir 2.2 4.7
India 5.6 6.8
Szmrm: Tcnlli Eve YmrP[un. Planning Commission. Cvovernineut of India,
New Delhi
State Domestic Product
The growth of a state’s domestic product (SDP) is
considered the single most important indicator of
economic development. For want of comparable data on
a single base since 1950-51, a detailed analysis has been
done only for the period after the formation of the
state. However, on the 1950-51 base, the average
HIMACHAL PRADESH DEVELOPMENT REPORT
annual growth rate of the Himachal Pradesh income
during 1950-51 to 1965-66 was 3.4 per cent as against
3.9 per cent at the all-India level.
The new series data on the 1993-94 base indicate
that during the last three decades, since the formation
of the state (1970-71 to 2000-01), the SDI’ has grown
at an annual rate of 4.27 per cent (Table 1.5). A
breakdown of the SDP growth reveals that the annual
rate has been the highest (6.39%) between 1985-86 and
1990-91 as against lowest of 2.44 per cent between
1975-76 and 1980-81.
The primary sector has grown at an annual rate of
1.56 per cent, the secondary at 6.11 per cent and the
tertiary at 6.17 per cent during the last three-decades.
The growth ofthe state‘s economy has depended mostly
on the performance of the agricultural sector. The
state’s economic growth was the highest (6.4%)
between 1985-86 and 1990-91. This was the time when
the growth of the agricultural sector was also the
highest (4.72%). Similarly, between 1975-76 and 1980-
81, the annual rate of growth was the lowest (2.44%).
This was the period when the agricultural sector
experienced a negative growth (-0.34%).
The rate of growth of real estate, ownership of
dwellings and business services (2.83%) and
agricultural and animal husbandry (1.89%) has been
below the state average during the last three decades.
Forestry and logging experienced a negative growth
(-0.15%), because of the state policy of conservation.
The mid-eighties marked a significant turning point in
the management of forests in the state. Conservation
assumed importance and green felling for commercial
purposes was banned. From 1980-81 to 1985-86, this
sector experienced a negative growth of -8.23 per cent.
Sectors that recorded a rate of growth higher than
the state average were electricity, gas and water supply
(21%), mining and quarrying (l3.46%), banking and
insurance (1l.69%), fishing (8.72%), trade, hotels and
restaurants (7.93%), manufacturing (6.91%), public
administration (6.52%), transport, storage and
communication (4.89%) and construction (4.74%)
(Figure 1.2).
The production structure of the state in 1950-51
was highly unbalanced, even more than what it was at
the national level. Agriculture, industry and services
contributed 69.4 per cent, 17.3 per cent and 13.2 per
cent respectively to the state domestic product. The
corresponding figures at the national level were 51.3
per cent, 33.1 per cent and 15.8 per cent respectively.

Chapter 1 HIMACHAL PRADESH: A PROFILE
TABLE 1.5
Sectoral Rates of Growth in Himachal Pradesh, 1970-7| to Z000-01
(A1 I993-94 Constant Prices)
]970—71 to ]975—76 to 19808! to 198586 to ]990—91 to 199596 to l970—7l to
I975-76 I980-81 I985-86 I990-91 I995-96 2000-U1 2000-01
A. Primary
Agriculture and animal husbandry
Forcstry and logging
Fishing
Mining and quarrying
Total (A)
B. Secondary
Mnniifacriiring
Registered
Unregistered
Construction
Elcctricity. gas and wutcr supply
Total (B)
C. Tertiary
Transport, storage and communication
Railways
Transport by other means and storage
Communication
Trade. hotel and restaurants
Banking and insurance
Real estate and ownership of
dwellings and business services
Public administration
Other services
Total (C)

Samar’. Computed from different volumes of Siutt’Durm’sriz’Pror1u£1, Department of Economics and
FIGURE 1.2
Sectoral Rate of Growth in Himachal Pradesh,
(At 1993-94 Constant Prices)
Electricity, gas and water supply
Mining and quarrying
Banking and insurance
Fishing
Trade, hotel and restaurants
Manufacturing
Public administration
Other services
Tran sport, storage and communication
Construction
NSDP
Real estate and ownership ofdwellings
Agriculture and animal husbandry
Forestry and logging
-2
Snurm. Computed fitun different volumes of S1aleD1mlerrirProdun, Department of Economics and Statistics, Hrmachal Pradesh.
Statistics, Him achal Pradesh.
1970-71 to 2001
I209?
6.91
11.69
8.72
7.93
6.52
6.10
.89
4.74
4.27
2.83
1.89
0.1
13.46
I I I I t I I I I l l
Annual Growth Rate (in per cent)
.00 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 22.00

48
Sectoral Distribution of SDP ofHimachal Pradesh, 1970-71 to 2000-01
TABLE 1.6
HIMACHAL PRADESH DEVELOPMENT REPORT
I970-7I
I975-76
19801‘?! I985-86
I990-9!
I995-9
I993-94 Constant Primes)
6
2000!)!
A. Primary
Agriculture and animal husbandry
Forestry and logging
Fishing
Mining and quarrying
Total (A)
B. Secondary
Manufacturing
Registered
Unregistered
Construction
Electricity, gas and wtttcr supply
Total (B)
c. Tertiary
Transport, storage and communication
Railways
Transport by other means and storage
Communication
Trade. hotel and restaurants
Banking and insurance
Real estate and ownership of dwellings
and business services
Public administration
Other services
Total (C)

Somra Computed from different volumcs of SlateD0mesticPr‘0dt1ct. Dcpartmc
The production structure of the state has since
changed. The share of the primary sector in SDP
declined sharply from 56.29 per cent in 1970-71 to
25.50 per cent in 2000-01, a decrease of 31 per cent
points (Tables 1.6 & 1.7). Agriculture and animal
husbandry declined from 39.02 per cent to 19.52 per
cent, and forestry and logging from 17.13 per cent to
4.67 per cent. Within the primary sector, the share of
mining and quarrying increased slightly, from 0.09 per
cent to 1.1 per cent.
The share of the secondary sector in SDP increased
from 18.95 per cent in 1970-71 to 32 per cent in 2000-
01, an increase of 13 per cent points. The share of the
manufacturing sector almost doubled during the same
duration, from 5.3 per cent to 11.23 per cent. Four
times increase in the share of registered industries from
2.36 per cent to 8.84 per cent was a positive trend. The
proportion in the unregistered sector declined from 2.9
per cent in 1970-71 to 2.4 per cent in 2000-01. The
share of the construction sector increased slightly from
nt
of Economics and Statistics. Himachal Pradcsh.
13.58 per cent in 1970-71 to 15.54 per cent in 2000-
2001. The corresponding figures for electricity, gas and
water supply were 0.06 per cent and 5.22 per cent
respectively.
The share of the tertiary sector in the SDP increased
from 24.76 per cent in 1970-71 to 42.50 per cent in
2000-01, an increase of 18 per cent points (Figure 1.3).
In the services sector, the share of transport, storage
and communication and railways remained almost
unchanged. The share of trade, hotels and restaurants
increased from 3.11 per cent to 8.76 per cent. The
corresponding figures for banking and insurance were
0.62 per cent and 4.86 per cent respectively. The share
of real estate and ownership of dwellings and business
services declined from 6.41 per cent to 4.22 per cent. In
the decade of the 1990s, there has been a consistent
decline in this sector. In 1984-85 its share increased to
a maximum of 7.2 per cent of the total SDP. On the
other hand, the share of public administration increased
from 4.89 per cent to 9.27 per cent during the last

Chapter 1 HIMACHAL PRADESH: A PROFILE
TABLE 1.7
49
FIGURE 1.3
Net State Domestic Product at Factor Cost by Sectors
Share ofPrimary, Secondary and Tertiary Sectors in in Himachal Pradesh. 197041 10 20004)‘
the SDP ofHimachal Pradesh, 1970-71 to 2000-01 I
(At I993-94 Constant Prices)
Y ears
Primary
Semndary
rmtm

Samoa Computed from different volumes of Stale Dr/rnes1icP1’oducl.
Department of Economics and Statistics, Himachal Pradesh
three decades. The share of other services increased
from 7.72 per cent to 12.99 per cent during the same
period.
From a highly unbalanced structure of economy, the
state is moving towards a more balanced one, which
Would help it to achieve a higher level of development.
Per Capita Inmme
The level and growth of per eapita income is used to
measure the economic development of a state. Himachal,
in 2000-01, had a per capita income of Rs. 10,942,
slightly higher than the national average of Rs. 10,306.
(At 1993-94 Constant Prices)
s0.00 50.29
50.00
3 42 50
A 40.00
— 32 00
lcen
1° °° Z476 25.50
pt:
5 20.00
8 95
10.00
0.00YIIYYIIIYIIIYIIIYIIIYIIIYIIIYII
_ 5 _ _
070-7
972-73
976-77
97$;-79
980-
982-83
984-85
986-87
938-X9
990-9
992-93
994-95
996-97
998-99
2000-0
‘T
<r
I\
O\
—I—P|’|m-try 4—s0¢tm11rty —a—Tet11m
Snulm: Computed fi0m different volumes 0f Sum»Donle.vrizPmducr.
Department of Ecottomtes and Statistics, Himachal Prudesh.
Taking a longer-term view, during the last three
decades, the per capita income of the state has nearly
doubled and has continued to be higher than at the all-
India level (Table 1.8 and Figure 1.4). However, there
have been variations in the level of per capita income.
Between 1970-71 and 1982-83, the per capita income of
the state was higher than the all-India average, and
lower in the period, 1983-84 to 1991-92. Since then, it
has always been higher than the all-India average. In
comparison, the per capita incomes ofthe neighbouring
states of Punjab and Haryana, have always been higher
than that of Himachal Pradesh. Jammu and Kashmir
has always had a lower per capita income.
FIGURE 1.4
Per Capita Income of Selected States, 1970-71 to 2000-01
(At 1993-94 Prices)
10000
14000
12000
-1 10000 /1*‘
8000 ./’3′
0000 ’§_;_,:;___,,-.»_<¢’=’=”-‘:”;” if’-” ‘ ‘ 5 8
Rupcc
4000
2000
OIIIIYIIIYIIIYYIIIYIIIIYIIIYYIII
._ _ __
970-7
972-73
974-75
976-77
978-79
982-83
984-85
986-87
988-89
990-9
992-93
994-95
996-97
998-99
2000-0 *
E
5*
—l—lIintacl18lPf8Ll€sl1 —I—llaryana
-°—]ammu and Kashmir -V—Ind|a
—n— Punjab
S0141-(1-. Computed from different volumes of Smriniml Ah\’/r’att.r /if P1411/I-1h
and Haljvuna.

50
TABLE 1.8
Per Capita Income of Selected States
1970-71 to 2000-2001
(At I993-94 Constant Prices)
Kwr
I I imachal
Pradesh
I laryana
Punjab
Jwnmu and
India
Kashmir

(‘ornputed fr
and Haryunu
Provisional
om
different vol
um cs of Smtirtiml A bx
mm: /:fPi4nj11b
During the last three decades, 1970-71 to 2000-01,
the per capita income ofthe state has grown at the rate
of 2.22 per cent per annum, which is lower than the
national average of 2.46 per cent (Table 1.9). Among
the neighbouring states, Punjab grew at an annual rate
of 2.87 per cent, Haryana at 2.76 per cent and Jammu
and Kashmir at 1.20 per cent.
However, the rate of growth of the per capita income
of the state has been the most impressive during the
nineties. During the seventies, it grew at a slower pace
than in the neighbouring states (0.23 per cent per
annum) and by the nineties its rise was the highest,
growing at an annual rate of 4.16 per cent as compared
HlMACHAL PRADESH DEVELOPMENT REPORT
to 3.29 per cent at the all-India level. The growth rate
in the neighbouring states, Punjab (2.38%), Haryana
(2.68%) and Jammu and Kashmir (1.47%) was lower
than Himachal and the all-India average. The state’s
performance was even better during the period 1990-91
to 1995-96 (4.25%).
TABLE 1.9
Annual Rate of Growth of Pcr Capita Income in
1-1imachalPradesh, Neighbouring States and lndia
Sialas I970-7! tn 1980181 to I990-9! to I970-7] to
1980181 1 990-91 2000-Z001 20017-OI
Himachal Pradesh
I-laryana
O13
L92
258
2.08
O97
231
400
333
006
315
416
268
238
L47
319
222
2.87
276
L20
2A6
Punjab
Jammu and Kashmir
India
Source Computed from different volumes of 51411511014/Abxl/‘(Ids lII’P|m/ab
and Ilnryamr.
Further, from 1995-96 to 2000-01, the rate of
growth in the per capita income of Punjab, Haryana and
Jammu and Kashmir increased over the previous years,
while in 1-limachal Pradesh it decreased slightly.
Poverty
Economic growth has crucial implications for
poverty reduction. It is expected that the faster growing
states would experience a rapid reduction in the
proportion of their population below the poverty line.
This section attempts to analyse the existing level of
poverty and the performance of programmes for its
alleviation in Himachal as compared to other states and
Union Territories. Poverty has been a matter of national
concern. Various agencies, both private and
government, have been estimating poverty levels from
time to time following different methodologies and
drawing different conclusions. This has led to
controversies over the reliability of the data. The
Planning Commission, has been providing estimates on
poverty from time to time. These too are not free from
controversy, yet these have been accepted as official and
hence are analysed in this section.
The proportion of Himachal’s population below the
poverty line declined from 26.39 per cent in 1973-74 to
7.63 per cent in 1999-2000, when the corresponding
figures at the national level were 54.88 per cent and
26.1 per cent, 3.5 times higher than that of the state.
Himachal was ranked sixth among the states and Union
Territories during 1999-2000, after Jammu and Kashmir
(3.48%), Goa (4.4%), Daman and Diu (4.44%),
Chandigarh (5.75%) and Punjab (6.16%). The

Chapter 1 HIMACHAL PRADESH: A PROFILE
neighbouring state of Haryana had a higher poverty
ratio than Himachal Pradesh. Himachal Pradesh with
7.94 per cent of its rural population below the poverty
line ranks seventh among the states and Union
Territories, only below Delhi (0.4%). Goa (1.35%),
Lakshadweep (1.35%), Jammu and Kashmir (3.93%),
Chandigarh (5.75%) and Punjab (6.35%) and with 4.63
per cent of such population in the urban areas, it ranks
second only below Jammu and Kashmir (1.98%).
TABLE 1.10
Poverty Alleviation Performance Indcx of States
and Union Territories, I973-74 to 1999-2000
Status/Union Territories
Values 0/ Poverty Alleviation
Performance India‘
Total
Rural
Urban
State?
Andhra Pradesh
Arunachal Pradesh
Assam
Bihar
Goa
Gujarat
Haryana
Himachal Pradesh
Jzimmu and Kashmir
Kariiataka
Kcrala
Madhya Pradesh
Maharashtra
Manipur
Mcglialaya
Mizoram
Nagaland
Orissa
Punjab
Rajastlian
Sikkim
Tamil Nadu
Tripura
Uttar Pradesh
West Bengal
All India
from the data provided by Government of India.
Planning Commission, New Delhi
Ntllfl ‘Poverty Alleviation Performance Index I 9
(1973-74-1999-00}
1973-74
51
Levels of poverty in the different states have declined
at varying rates. Noteworthy are the cases of Jammu
and Kashmir and Kerala, which beginning as high
poverty-ratio states, have joined states with a low
percentage of population below the poverty line.
Himachal Pradesh has not lagged behind in alleviating
poverty.
A poverty alleviation performance index has been
formulated for measuring the rate of its decline
(Krishan, G., 1999). It indicates that Jammu and
Kashmir (0.91), Goa (0.90), Delhi (0.83), Kerala (0.79),
Punjab (0.78) and Haryana (0.75) had achieved
tremendous success in alleviating poverty in almost
three decades (Table 1.10). I-Iimachal Pradesh ranked
9th among the states and union territories in reducing
poverty ratios, 12th in the rural areas and 19th in the
urban areas.
The performance of poverty alleviation in the state
has varied during ditferent points of time. During the
period 1973-74 and 1977-78 and 1987-88 to 1993-94,
poverty in Himachal had increased (Table 1.11). From
1993-94 to 1999-2000, its pace of poverty reduction was
the highest among the neighbouring states of Haryana
and Punjab also as compared to the national level.
TABLE 1.11
Poverty Alleviation Performance Index of I-Iimachal Pradesh,
Neighbouring States and India at Different Points of Time,
1973-74 to 1999-2000
Sluzrai”/Imiiu 1973-74 1977-78 1983-84 1987-88 1993-94
10 L0 I0 lo I0
1977-78 1983-84 11787-88 1993-174 1999-2000
Himachal Pradesh -0.23 0.49 0.06 -0.84 0.73
Haryana (].l(i 0.28 0 22 -0.5] 0.65
Punjab 0.32 0.16 0.18 0.11 0.48
Jammu and Kashmir 0.05 0.38 0.02 -0.06 0.86
A11 India 0.43 -0.42 0.13 0.07 0.27
Source Computed rmni am provided by Planning Commission, New
Delhi.
The growth-poverty reduction linkage holds true in
Himachal Pradesh unlike the neighbouring states of
Punjab and Haryana.
Expenditure Pattern
The state has implemented a series of development
plans to create an infrastructure based on its
requirements and potential. It initially focused on
creating transportation and communication facilities,
which were considered basic for the development of the

52
hilly areas. Emphasis was also laid on creating facilities
for water, irrigation, power and agricultural growth.
Over a period, the emphasis has shifted to creating and
providing social services.
Plans-wise Expenditure: Spending on different
sectors has had a direct bearing on the growth of the
state’s economy. In the First Plan, expenditure on
transportation and communication was more than half
the total. The power sector got a meagre share of 4.6
per cent in the First Plan. By Third Plan it had
increased to seven per cent. Expenditure on agriculture
and allied activities was 14.4 per cent in the First Plan
and increased to 32 per cent in the Third Plan.
Expenditure on social services was one-fifth of the total
expenditure in the First and Third Plans.
Since the formation of the state, expenditure on
agriculture and allied activities has decreased
considerably from 24 per cent in the Fourth Plan to 11
per cent in Ninth Plan. Allocations made for this sector
in the Tenth Plan are on a still lower side (9.6%).
Expenditure on energy has decreased from 27 per cent
in the Sixth Plan to 18.4 per cent in the Ninth Plan.
The increased allocation in the Tenth Plan (24.2%)
indicates the importance given to this sector.
Expenditure on transportation and communication has
decreased from 29 per cent in the Fourth Plan to 14 per
cent in the Ninth Plan. The Tenth Plan has allocated
16 per cent to this sector.
The social sector has received top priority.
Expenditure on this sector has more than doubled
during the Fourth and Ninth Plans. During the Fourth
Plan, expenditure on social services was 18 per cent,
which by the Ninth Plan increased to 41.3 per cent.
However, allocation to this sector has been slightly less
(39%) in the Tenth Plan, but continues to be the most
important sector.
Pattern of Expenditure: Budgetary expenditure by
the government during the period 1970-71 to 2001-02
increased 73 times from Rs. 62 crore to 4,510 crore. At
the time of the formation of the state, development
expenditure was more than four-fifths of the total
expenditure, which over the last three decades has
decreased by almost 30 per cent points. During the
period 1970-71 to 1975-76, the proportion of
development expenditure consistently decreased and
reached 65 per cent in 1975-76. Thereafter, it increased
till 1980-81, reaching almost 80 per cent. During 2000-
01 and 2001-02, the proportion of development
expenditure decreased by nine per cent points. This is a
worrisome phenomenon.
H1MACHAL PRADESH DEVELOPMENT REPORT
TABLE 1.12
Budgetary Expenditure in Himachal Pradesh,
1970-71 to 2001-02
(Rs. 01 Crore)
Year
Budgetary
E1rp(‘nditure
Development
Expenditure
N on-development
Expenditure

Source Depaflnrenl 0/Flnanoe(Budgef). 0641661111661 64″1-116161611611 Pradesh.
N612». The figures tn parenthesis are in pe|’ 66111.
Regional Disparities
The above sections have analysed variations in the
development process of Himachal Pradesh in relation to
other states and Union Territories. However,
development within the state has not been
homogeneous. Disparities exist between different
districts. In this section, an effort has been made to
understand these disparities in the context of the level
and growth of infrastructural facilities in relation to
population and area. This is important because efforts
have been made to create physical facilities by investing

Chapter l ¢ HIMACHAL PRADESH: A PROFILE
53
FIGURE 1.5
Budgetary Expenditure in Himachal Pradesh, 1970-71 to 2000-01
2000-01
1998-99
1996-97
1994-95
1992-93
1990-91
1988-89
1986-87
1984-85
1982-83
1980-81
1978-79
1976-77
1974-75
1972-73
1970-71
I I I I | | |
0% 10% 20% 30% 40% 50% 60% 70%
| | I
20% 90% 100%
IDevelopment ElNon-development
Soura’. D€p41I‘IIHZI1l 0/FlWl1V!L‘?(B14dg€f), Government of llimachal Pradesh
heavily in these sectors. The indicators discussed to
measure the level of socio-economic development at the
district level are:
1) per capita income
2) female literacy rate
3) credit-deposit ratio
4) number of industrial workers per thousand of
population
5) medical and public health facilities
6) means of communication, and
7) banking sector
These indicators have been used to measure various
dimensions of development. Economic development at
the district level has been gauged through per capita
income, and the state of social development through
variations in female literacy rates. Credit-deposit ratio
signifies the enterprising nature of the local people. A
relatively higher number of industrial workers in the
population signifies a higher level of industrial
development. Such indicators as percentage of villages
with primary health centres, sub-centres, post-offices
and banks Within a distance of one kilometre, have
been used to measure the level of infrastructure
essential for social development.
The selection of the indicators was greatly hampered
by lack of access, non-comparability and reliability of
data at the district level. The data available on infant
mortality rate at the district level were not reliable and
hence were excluded from the analysis. However, the
indicators discussed here represent a fairly balanced
level of development. An exercise was undertaken to get
a combined development index. It was assumed that
these indictors would be positively correlated but the
results were not in line with our hypothesis. This
shows state-specific peculiarities in the pattern of

54
development. Per capita income, infrastructure and CD
ratio were negatively correlated with the female literacy
rate, whereas we had assumed that these would be
positively correlated. Only the number of industrial
Workers per thousand of population and the CD ratio
were significantly (.744) correlated. Per capita income
and the number of industrial workers per thousand of
population were also positively correlated, but not
significantly. This prompted us to analyse these
indicators separately.
Per Capita Income
1-Iimachal had an average per capita income of
Rs. 6,507 in 1999-2000 at 1990-91 constant prices
(Table 1.13). The district of Lahaul and Spiti with
Rs. 12,559 was at the top and Hamirpur with Rs. 4,243
at the bottom. LOW density of population and high
value- added cash crops in Lahaul and Spiti were the
reasons for the high per capita income. The state
average in 1990-91 was Rs. 4,618. Lahaul and Spiti was
again at the top and Una was at the bottom. Shimla,
the state capital, ranked third at both points of time.
Solan, being the centre of industrial activity, ranked
second in 1999-2000. During the nineties, the per
capita income in the state as a whole increased by Rs.
1,889. The highest increase in quantitative terms was
in Solan district (Rs. 5,179). In Kinnaur, it decreased
by Rs. 816 during 1990-91 and 1999-00. In Kinnaur,
because of the failure of rains and natural disasters the
production of horticultural and agricultural crops was
low, and that had an impact on its per capita income
(HPHDR, 2002).
During the nineties, the per capita income in
I-Iimachal grew at an annual rate of 3.88 per cent. Every
district, with the exception of Kinnaur (-1.08%) had a
positive growth of per capita income. It was the highest
in Una district (7.21%) closely followed by Solan
(7.11%). The per capita income in Una district, which
was almost at the bottom at both points of time was
small, but even this small increase of Rs. 2,086
amounted to a faster growth. The per capita income of
Solan district was 2.5 times that of Una in 1999-00.
This was significant. The secondary sector has
dominated the economy of Solan district and the
tertiary sector in Una. The growth of per capita income
in Lahaul and Spiti and Shimla, which otherwise ranked
first and third respectively, was among the slowest
among all districts (1.06% and 1.10% respectively).
Regional disparities in terms of per capita income in
all districts decreased during the decade of the nineties
HIMACHAL PRADESH DEVELOPMENT REPORT
(Table 1.14). In 1990-91, the per capita income of the
highest ranked district was almost five times that of
the lowest ranked district, which came down to three
times in 1999-2000. The values of coefficient of
variability calculated separately for 1990-91 and 1999-
2000, further confirm this.
District-wise Pet Cap
1999-Z000 at
TABLE 1.13
1990-91 Prices
ita Income, 1990-91 to
D15!/101.3‘/SILXIE
1999-2000 Rank
(!7|Rl(pEl1Y) 2000
1990-1991 Rank
(lrrllupefiv) 1991
/411101111 Gwwlh Rm
11990-1991 to
9-2000)
I99
Una
Solan
Bilaspur
Mandi
Hamirpur
Sinnaur
Kangra
Chamba
Shimla
Lahaul and Spill
Kullu
Kinnaur
1-Iimaclial Pradesh

Source Computed from Humtm Dwclop/nerll Reporl 0/ 1-1111111111111 Pradesh. 2002.
1111112 The districts are arranged Ill descending order of annual growth rate.
TABLE 1.14
Coefficient of Variability of Per Capita Income,
1990-91 and 1999-2000 At 1990-91 Prices
Year caqg/malt 0/ Variability Regional Disparity
1990-1991 42.51
1999-2000 30.42 ‘
Female Literacy
At the state level, almost seven out of every ten
females were literate in 2001 as against five in every ten
in 1991 (Table 1.15). The district of I-Iamirpur with
three-fourths of its females being literate, was at the
top and Chamba with only half was at the bottom at
both points of time. The corresponding figures in 1991
were 66 per cent and 29 per cent. Female literacy rate
in Lahaul and Spiti, Kullu, Sirmaur and Chamba
districts have increased by more than 20 per cent points
during the last decade. This has been attributed to the
fact that these four were the lowest ranked districts in

Chapter 1 HIMACHAL PRADESH’ A PROFILE
55
TABLE 1.15 TABLE 1.16
District-wise Female Literacy Rates in 1-1imachalPradesh, Coefficient of Variability of Female Literacy Rates,
Dixriizts/Suite
L1I€1′!lL‘\’ R
2001 (in
per mm)
2
Rank Lllériltft‘ Rate
I991 (in
2/)0]
pa‘ can
I)
1A1″13U1 and Spili
Kullu
Sitnlaur
C1lfl|\‘117El
Shimla
Solan
Mandi
Bllaiput
Una
K311 gra
Hamirput
K1I1l’|3\1l’
Hmiachal Pradesh

S0urcz’. Camus oflndia (2001) PmvisirmuIP0puIa!i0n T omI.i”, Ptlpfl‘-I vf2(N71_ Senc.\”-
3. Directorate of Census Operations, Himachal Przidesh.
1991 and had greater scope for improving their female
literacy rates.
A comparison of the values of the coefficient of
variability at both points of time indicates a decrease in
regional disparities (Table 1.16). The districts are
moving towards homogeneity in terms of social
development, as reflected in female literacy rates.
1991 and 2001 1991 and 2001
at
Rank Change in per oenl Year Coefficient of Variability Regional Disparity
1991 Pvim During
1991-2001 1991 2443
2001 11.76 ‘
Credit-Deposit Ratio
Credit-Deposit ratio in 2000 was 21.7 per cent as
against 33.4 per cent in 1990 (Table 1.17). Solan
district, with a CD ratio of 49.7 per cent, stood at the
top and Lahaul and Spiti, with 11.6 per cent, was at
the bottom. The district of Solan with a very high CD
ratio of 87.1 per cent in 1990 was ranked at the top,
and Hamirpur with 15.3 per cent at the bottom. There
has been a sharp decline of almost 37 per cent points
in the CD ratio between 1990 and 2000.
A comparison of the values of the coefficient of
variability at both points of time indicates a decrease in
regional disparities (Table 1.18). The districts are
moving towards homogeneity but at a very slow pace. It
is important to mention that this homogeneity is
because of a fall in the CD ratio of the top-ranking
districts, which is not a good sign. The situation
would have been better had the lower-ranking districts
moved upwards.
TABLE 1.17
District—wise Credit—Deposit Ratio in HimachalPradesh, 1990-2000
Rank .2000 Dislrids/Slate
Z000
I990
Credit
Deposit
CD Ratio Credit
Deposit
CD Ratio
Rank 1990
1. Solzin
2. Sirmaur
3. Kullu
4. Mandi
5. Shimlzi
6. Bilzispur
7. Chamba
8. Kangra
9. Kinnaur
10. Una
1 1. Hamirpur

Sow-re Different issues 01′ S/:in.rtiwiAli:rm<t <1/Himatiiulfiuiievh. Directorate of Economic and Statistics. Himaehal Pradesh_

56
TABLE 1.18
Coefficient of Variability of Credit-Deposit Ratio,
1990-91 and 1999-Z000
HlMACHAL PRADESH DEVELOPMENT REPORT
TABLE 1.20
Coefficient of Variability of Number of Industrial Workers,
1991 and 2000
Yeur caq‘/mm qr Variability Regional Dhparity
Yeur Coefficient 0/ Vurlability Regional Dhparily
1990-1991 57.14
1999-2000 53.82 .
Industrial Workers
The number of industrial workers per thousand of
population has been used as an indicator to measure
the level of industrial development. At the state level,
almost 13 persons per thousand of population were
working in factories in 2000, as against seven in 1991
(Table 1.19). Solan district ranked at the top and
Lahaul and Spiti at the bottom at both points of time.
In fact, the ranking of every district at both points of
time remained almost the same, indicating hardly any
dispersal of industrial activity in the state. These have
been concentrating in Solan district.
TABLE 1.19
District-wise Number of Industrial Workers per 1000 of
Population in 1-limachalPradesh, 1991 and 2000
Dtxtrizrs/Stzire N1>.0fInduszr1a/ Rank No. qf Irtdustrml Rank
Wor/(err Per 1,000 20017 Workers Fa 1,0110 199/
of P0]l14I11!i0n, 2000 of Population, 1 9 91
Solan
Sirmaur
Kmnaur
Una
Kangra
Shimla
Mandi
Btlaspur
Chamba
Kullu
Hamirpur
Lahaul and Spiti
Himachal Pradesh
88.12
17.32
9 O4
7.86
6.77
5.31
4.74
3.09
2.04
1 60
0.84
(1.00
12.56
l
2
3
4
oo\|<7~v|
9
10
ll
12
33.77
14.01
7.84
6.51
b OK
3.77
4.98
2.16
1.62
1.56
0.93
1) 00
7.09
Source: Computed from diffcrcnt Issucs of Slul1.tl1ruIAbslrar1 0/Ilrmarhal
Prudsh. Directorate of Economic and Statistics, Himachal Pradesh_
and Cfllsus <7/11111111.
Further, a comparison of the values of the
coefficient of variability at both points of time indicates
an increase in regional disparities (Table 1.20). The
districts are moving towards heterogeneity.
Infrastructure
Such indicators as the percentage of villages with
primary health centres, sub-centres, post-offices and
1991 134.05
2000 199.18
banks within a distance of one kilometre, have been
used to measure the level of infrastructure essential for
social development. A combined picture of these
indicates that almost one-fourth of the villages had at
least one of these facilities available within a distance
of one kilometre in 1999-2000. Kullu, with 45.93 per
cent villages with these facilities within a distance of
one kilometre, ranked at the top in 1999-2000, followed
by Kangra (37.30%) and Bilaspur (35.37%), and Sirmaur
with 11 per cent such villages, ranked at the bottom
(Table 1.21). These districts had the same rankings in
1990-91. The corresponding figures were 41 per cent
and 9 per cent.
The growth of medical and public health facilities
reflects one dimension essential for development. The
distance at which primary health centres and sub-
centres are available in the village has been analysed for
this purpose. By and large, medical and public health
facilities in the state, as well as in the districts have
improved. In all, 5.22 per cent of the villages in the
state had primary health centres within a distance of
one kilometre in 1999-2000 as against 3.41 per cent in
1991. Kullu with 13 per cent of such villages, ranked at
the top in 1999-2000 and Chamba with 0.09 per cent
ranked at the bottom. These districts have remained in
the same position, the corresponding figures being
10.47 per cent and 0.05 per cent in 1990-91.
As regards access to health sub-centres, 36.3 per
cent of the villages had such access within a distance
of one kilometre in 1999-2000 as against 30.7 per cent
in 1991. Kullu with 62 per cent of such villages ranked
at the top in 1999-2000 and Kinnaur with 14 per cent
was ranked at the bottom. There has been no change in
their ranking since 1990-91, when the corresponding
figures had been 58 per cent and 5 per cent.
Availability of postal services at a short distance has
been taken as an indicator of the growth of means of
communication. Kullu district, with almost 90 per cent
of the villages with a post office within one kilometre
in 1999-2000 stood at the top and Una with 11 per
cent of such villages was at the bottom. The two
districts had the same ranking in 1990-91.

Chapter 1 HIMACHAL PRADESH: A PROFILE
TABLE 1.21
District-wise Ranking of Villages with lnfrastructure in
HimachalPradesh, 1990-91 and 1998-99
Dinrias/State Villages Rank m Village: Rank in
/in per cent) I999-200!) (in per cent) I990-91
Kullu 45.93 1 41.28 1
Kangra 37.30 2 33.76 2
Bilaspur 35.37 3 31.37 3
Chamba 31.02 4 27.01 4
Shimla 25.57 5 23.68 5
Lahaul and Spiti 23.07 6 17.67 7
Solan 22.52 7 20.18 6
Una 17.19 8 15.53 8
Kinnaur 15.25 9 9.00 11
Hamirpur 13.58 10 12.33 9
Mandi 12.22 11 10.65 10
Sirmaur 10.67 12 8.99 12
Himachal Pradesh 24.14 20.76
Samoa Computed from am provided in Human Develvpmenl Rfipvrl 0/
Himachal P/ndexh. 2002
Banking facilities are an important catalyst of
economic growth. The presence of banks in particular
areas can give a boost to the process of development.
Bilaspur district, with 24 per cent of its villages with a
bank within a distance of one kilometre, ranked at the
top in 1999-2000 and Chamba, with three per cent of
such villages was at the bottom. These districts had the
same ranking in 1990-91 with corresponding figures of
24 per cent and two per cent.
TABLE 1.22
Coefficient of Variability of Infrastructure,
1991 and 2000
Year Coefficient 0/ Variability Regional Disparity
1990-1991 50.60 ‘
1999-2000 46.42
A comparison of the combined value of the
coefficient of variability at both points oftime indicates
a decrease in regional disparities (Table 1.22). The
districts are moving towards homogeneity but at a very
slow pace.
On the whole, regional disparities in the state have
decreased during the nineties. This has laid the
foundation of socio-economic development. However,
the pace at which regional disparities are decreasing is
quite slow, with the exception of female literacy. This
57
could be attributed to the varying topography in the
districts, which makes creation of every type of
infrastructure difficult.
Conclusion
The growth behaviour of the economy of Himachal
Pradesh and that of India during 1971-2001 invites an
interesting comparison with each other. For the first
half, that is during 1971-85, the state‘s economy grew
slower than that of the national economy while during
the latter halfi the trend reversed when the state’s
economy grew faster. During the Ninth Plan the
annual rate of growth of Himachal’s economy was 6.2
per cent as compared to 5.4 per cent of the national
economy. The economy of the state, which had been
growing at a slower pace than that of the neighbouring
states of Punjab and 1-laryana during the 1980s marked
a distinct departure from the previous trend during the
1990s, with a faster rate of growth. Per capita income
of Himachal Pradesh in the seventies was higher than
the national average; in the eighties it was lower; and
in the nineties it was again consistently higher than
the national average.
Taking a long-term view, the share of the primary
sector decreased significantly from 56.3 per cent in
1970-71 to 25.5 per cent in 2000-2001. By contrast, the
share ofthe secondary sector moved from 18 per cent to
32 per cent. The tertiary sector also got enlarged from
24.8 per cent to 42.5 per cent.
The state has been successfiil in alleviating poverty.
The percentage of population below the poverty line
declined from 26.4 in 1973-74 to 7.6 in 1999-2000. The
corresponding figures at the national level were 54.88
per cent and 26.1 per cent. Reduction in poverty has
been ofa high order since 1993-94.
Agriculture and transport were the priorities during
the earlier plans. The thrust gradually shifted to social
services. Now power generation is receiving prime
attention. There has been a drastic decline in the
proportion of development expenditure in the state. In
1970-71, it was 83 per cent of the budgetary
expenditure. This has come down to 52 per cent in
2000-01. This decline of 30 per cent points is highly
worrisome.
An encouraging feature is that regional disparities in
terms of per capita income, female literacy, credit-
deposit ratio and access to infrastructure declined
during the nineties. A greater spatial equity is being
generated. Regional disparities in the proportion of
industrial workers, however, have widened over time.

58
This signifies that industry is getting attracted to a few
locations offering certain advantages.
Himachal Pradesh is distinguished by a higher level
of social development than economic development. The
emerging problems of the state, particularly
unemployment, are distinctly economic in nature. A
major challenge before the state is to deploy its human
resources effectively for furtherance of economic well-
being.
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