Himachal Pradesh Industrial Policy - 1996

1. Background 

Himachal Pradesh, since attaining state hood in 1971, has adopted an approach of balanced inter-sectoral development to that the goal of raising the standard of living and overall prosperity of the people of the state is achieved. The strategy to achieve these objectives has yielded positive results. The rapid agricultural and horticultural development of the state has contributed significantly to the economy and to the rise in the standard of living of the people. The food grain productionin the state today is more than 14 lakh tonnes per annum. The vegetable production is about 5 lakh tonnes per annum. Fruit production has also increased many fold and is around 5 lakhs per tonnes per annum. As a result the average per capita income in the state (at constant prices) has increased from Rs.1704 in 1980-81 to Rs. 2012 in 1992-93. Today the percentage of the population living below the poverty line is only about 9% against the national average of 30%. In the power sector which has been identified as a thrust area for development, the state today is generation of hydroelectric power.

In addition about 2000 MW of additional hydroelectric power will be generated by 2000 AD. The motorable road length in the state has increased to more than 19000 kms. and, with other roads, today connects more than 7521 villages of the state. The literacy percentage of the state is now 63.86% which is higher than the national average. There are 37 technical training institutions including one REC ( Regional Engineering College ) functioning in the state. The tourism sector also has potential for further growth as is evident from the largenumber of tourist visiting the state. A sound base has thus been created for achieving the objectives of rapid agricultural and industrial development, rapid expansion of opportunities for gainful employment, reduction andremoval of poverty and for reducing social and economic disparities.

2. Industrial Policy 1991 :

The industrial policy of Himachal Pradesh was last announced in 1991. Since then, there has been much change in the economic policy environment in the country. It is, therefore,necessary to review the existing industrial policy and to clearly spell out the State Government's policy on industrial development in the changed economic scenario. The following objectives had been laid down in the industrial policy statement of 1991:
a. Increased share of Industries Sector in GDP.
b. Higher priority to Industries Sector in Plans.
c. Generation of fresh avenues of employment.
d. Optimum utilisation of resources and local raw materials.
e. Geographical dispersal of industries.
f. Role of Public/Private sector.
g. Integrating Industrial Development with development of other sectors.
h. Productivity improvement, technological upgradation and investment by Non-Resident Indians.

3. Present Status :

The process of economic reforms initiated in July 1991 by the Govt. of India and the consequent industrial policy reforms/initiatives in the form of de-licensing and automatic approvals of foreign investment in identified areas have generated significant investor interest in Himachal Pradesh. 

Industrial liberalisation has clearly led to an increase in the flow of investment. It is also true that states that provide the necessary infrastructure for industry attract more investment. Thus removal of infra-structural constraints and elimination of administrative bottlenecks, are pre-requisites for attracting more and better investment to the state.

4. Need for New Industrial Policy

In order to be in step with the present day economic situation it is therefore imperative that new policy initiatives be taken and the existing industrial policy be reviewed. This is also necessary for signalling to investors the State Government's commitment to rapid industrialisation of the state and to creating and investor friendly climate in the state. It is also the desire of the State Government to ensure that the benefits of industrialisation are to the extent possible spread across the different parts of the state.

5. New Priority Areas Requiring Action

The State Government should play a complementary role in the provision of basic infrastructure like power, roads, transport, education, health and housing and also assume the responsibility for ensuring the availability of critical inputs like power, land and water. At the same time, the state Government desires to reduce the large number of controls and regulations which have a bearing on industry. It is also felt that the State Government can play a major role in creating an ideal investment climate by using its powers to direct and channelise the movement of traded and produced goods, through an appropriate and conducive taxation policy. The review of the industrial policy  aimed at encouraging private initiative and enterprise and eliminating unnecessary delays and unwarranted regulations.