Report on Economic study of Uttarakhand
A report submitted by
By
Kranthi Kumar
Sahil
Cyril
Shyam
Leyon
Pratham
Submitted to
Ramana shetty
Introduction to the state economy:
जहाँ पवन बहे संकल्प लिए, जहाँ पर्वत गर्व सिखाते हैं, जहाँ ऊँचे नीचे सब
रस्ते बस भक्ति के सुर में गाते हैं उस देव भूमि के ध्यान से ही उस देव भूमि
के ध्यान से ही मैं सदा धन्य हो जाता हूँ है भाग्य मेरा, सौभाग्य मेरा, मैं
तुमको शीश नवाता हूँ
Uttarakhand, the place that holds the greatest significance to 1 billion Hindus world wide. And
where the place itself is worshipped as Devbhoomi, the land of Gods. From Rishikesh to
Haridwar and Kerdarnath to Nainital, it offers everything a person wants from Peace to joy with
its serene beauties and landscapes and with green and lush fields fed by the river of Maa Ganga.
Most popular tourist destination for the travellers who comes to India and it truly represents the
cultures and ethos of India.
Uttarakhand is one of the fastest growing states in India thanks to the massive growth in capital
investment arising from conducive industrial policy and generous tax benefits. The state is
situated in the foothills of Himalayas. The presence of several hill stations, wildlife parks,
pilgrimage places and trekking routes make Uttarakhand an attractive tourist destination.
Uttarakhand was formed on the 9th November 2000 as the 27th State of India, when it was
carved out of northern Uttar Pradesh. Located at the foothills of the Himalayan mountain ranges,
it is largely a hilly State, having international boundaries with China (Tibet) in the north and
Nepal in the east. On its north-west lies Himachal Pradesh, while on the south is Uttar Pradesh. It
is rich in natural resources especially water and forests with many glaciers, rivers, dense forests
and snow-clad mountain peaks. Char-dhams, the four most sacred and revered Hindu temples of
Badrinath,Kedarnath, Gangotri and Yamunotri are nestled in the mighty mountains. It’s truly
God’s Land (Dev Bhoomi). Dehradun is the Capital of Uttarakhand. It is one of the most
beautiful resort in the submountain tracts of India, known for its scenic surroundings. The town
lies in the Dun Valley, on the watershed of the Ganga and Yamuna rivers.
The State is rich in mineral deposits like limestone, marble, rock phosphate, dolomite, magnesite,
copper, gypsum, etc. The number of small scale industries is 25,294 providing employment to
63,599 persons. As many as 1802 heavy and medium industries with an investment of Rs 20,000
crore employ 5 lakh persons. Most of the industries are forest-based. There is a total of 54,047
handicraft units in the state.
Uttarakhand is a well-renowned religious and wildlife tourism destination. The topography in
Uttarakhand ranges from foothills and plains to higher snow-clad mountains, thus including
almost all major climatic zones conducive to agro-horticulture.
In 2019, domestic tourist inflow in the state stood at 37.58 million, while foreign tourist visits
crossed over 0.15 million. In 2018, 27.81 lakh pilgrims arrived in state for Chardham Yatra, out
of which 7.32 lakh pilgrims visited Kedarnath. During FY22, tourist inflow stood at 54.64
million.
At current prices, Uttarakhand’s GSDP is projected to be Rs. 3.94 trillion (US$ 47.34 billion) in
FY25. Between 2018-19 and 2024-25, GSDP of the state is estimated to increase at a CAGR of
8.86%.
The main growth drivers in the economy have been identified as hill agriculture with emphasis
on horticulture including aromatic and medicinal plants (promoted by AYUSH) and tourism to
improve productivity and create sustainable livelihood, especially for people in the higher
reaches of the state.
The Micro, Small and Medium Enterprises (MSME) sector is cross-cutting across all other
sectors, due to its employment generation potential, and is hence, extremely important in the
growth strategy of the state.
Simultaneous efforts to develop two other sectors—renewable energy in the form of small
hydro-power and expansion of IT to all parts of the state economy—will make the growth plan
sustainable and strengthen its fundamentals. Uttarakhand as a state has great potential for the
clean option of hydro-power and the smaller and environment-friendly hydel projects offer
renewable sources of energy.
The IT sector has consolidated strengths in the state by digitising many public services,
especially by provision through the Common Service Centres (CSCs) under the e-governance
programme. It has also established convenient Wi-Fi services for promotion of tourism in the
state and is expanding mobile & Internet connectivity throughout the state among its other
achievements.
Study of the data:
State GDP is growing continuosly over the years and it is projected to reach 47 US billion dollars by the
end of the financial year 2025 and the major contributions coming from the Agricultural sector, Tourism
especially Piligrimage tourism contributing to the GDP and the growing influence of various industries in
and around Dehradun is also helping the State to grow fianancially.
Secondary and tertiary sector contribute more to the Economy of the state than the Primary sector.
There is fall in exports from the sate which were primarily agriculture products and animal husbandry
products.
Agriculture is the main contributor to the Primary sector, Livestock adding as the secondary contributor.
Manufacturing sectors contribution has increased its contribution
Post covid growth rate has been increased on an average, due to covid state has suffered due to
the less foot fall of tourists during 2020-20121 but thereon the state government has taken several
measures which helped the state to grow. Various industrial projects has been announced post covid
which created employment.
Uttarakhand’s per captia income is more than the country average and it its growing YOY due to the
increasing opportunites in tourism sector and development of new industries.
Haridwar, Dehradun and US nagar has seen more growth due to accumulation of the population
in these places nad Haridwar being the most prominent religious site for Hindus has seen a incremental
growth due to the focus from the government.
Haridwar being the epicenter has moreper captia income due to increase of economic activities in this
area due to various development projects of the by the government.
Key Observations:
1. *Trend of Fiscal Deficit*:
- The fiscal deficit rose steadily from *2011-12 (1.18%)* to *2013-14 (3.53%), peaking at **3.56% in
2014-15*.
- It declined marginally and fluctuated within the *2.8% - 3.5% range* until *2019-20*.
- A sharp spike occurred during *2020-21, where the fiscal deficit shot up to **4.21%*, likely due to
the economic impact of the COVID-19 pandemic.
- Post-2020-21, there was a significant drop, with the deficit settling at *1.40% in 2021-22*.
- In subsequent years, the fiscal deficit rose slightly and stabilized around *2.67% in 2022-23* and
*2.61% in 2023-24 P.E.*.
2. *Trend of Primary Deficit*:
- The primary deficit remained relatively low initially (close to *0.36%* in 2011-12) but surged during
*2013-14 and 2014-15, reaching **2.04%* and *1.78%*, respectively.
- Similar to fiscal deficit, it exhibited fluctuations between *0.89% and 1.68%* until *2019-20*.
- During *2020-21, the primary deficit spiked to **0.45%*, corresponding to the fiscal stress during the
pandemic.
- Post-pandemic, the primary deficit declined significantly, improving to *-0.45% (a surplus)* in 2021-
22.
- It returned to a marginal deficit, reaching *0.69% in 2022-23* and is projected to be *0.83% in 2023-
24 P.E.*
Analysis:
1. *COVID-19 Impact*:
- The sharp spike in fiscal and primary deficits during *2020-21* indicates a severe economic shock,
likely due to revenue losses and increased expenditures during the pandemic.
2. *Post-Pandemic Recovery*:
- Both deficits show a recovery trend after *2021-22*, suggesting fiscal consolidation efforts and
economic stabilization.
3. *Primary vs Fiscal Deficit*:
- The difference between the fiscal deficit and primary deficit represents *interest payments* on debt.
The widening gap during certain years (e.g., 2014-15 and 2020-21) indicates growing debt servicing
costs.
Suggestions to Improve Uttarakhand's Economy
1. Boost Tourism with Sustainable Practices
o Develop eco-tourism and adventure tourism to attract both domestic and
international visitors while preserving the state's natural beauty.
o Improve infrastructure at major tourist destinations like Chardham and wildlife
parks to enhance accessibility and visitor experience.
o Collaborate with private stakeholders to create luxury resorts and eco-friendly
accommodations.
o Leverage digital platforms to promote Uttarakhand's unique destinations globally.
2. Diversify Agriculture and Promote Agro-Industries
o Encourage organic farming and certification to tap into premium markets.
o Focus on high-value crops like aromatic and medicinal plants, supported by
AYUSH initiatives.
o Invest in modern agricultural techniques, cold storage facilities, and processing
units to reduce post-harvest losses.
o Create farmer cooperatives to improve market access and bargaining power.
3. Strengthen the MSME Sector
o Provide low-interest loans and simplified compliance procedures to support the
establishment and growth of MSMEs.
o Focus on skill development programs to train the local workforce for small-scale
industries, particularly in handicrafts and forest-based products.
o Develop industrial clusters for specific sectors like food processing, textiles, and
woodcraft to increase efficiency and collaboration.
4. Expand Renewable Energy Initiatives
o Promote small hydro-power projects in a sustainable manner to generate clean
energy and create local employment opportunities.
o Explore solar and wind energy options in suitable regions of the state to diversify
renewable energy sources.
o Provide incentives for private sector participation in green energy projects.
5. Leverage the IT Sector for Statewide Development
o Expand high-speed internet connectivity to rural and remote areas to enable
digital literacy and e-governance.
o Create IT parks and hubs in cities like Dehradun and Haridwar to attract tech
companies and startups.
o Promote Uttarakhand as a hub for IT-enabled services (ITES) and outsourcing.
6. Enhance Infrastructure and Connectivity
o Accelerate construction of roads, bridges, and railways to improve connectivity
between rural and urban areas.
o Develop airports and heliports to facilitate quicker access to remote destinations,
particularly for tourism and emergencies.
o Modernize public transportation to support the mobility of tourists and residents.
7. Promote Industrial Growth
o Identify and establish special economic zones (SEZs) in potential areas like
Udham Singh Nagar and Haridwar to attract investment.
o Focus on industries with a low environmental footprint, such as electronics,
pharmaceuticals, and manufacturing of green products.
o Collaborate with foreign investors and provide tax breaks or incentives for
establishing industries in the state.
8. Revitalize Exports
o Improve the quality and packaging of agricultural products to meet international
standards.
o Explore new markets for traditional products like organic herbs, teas, and
handicrafts.
o Set up export facilitation centers to guide local businesses on compliance with
export regulations.
9. Capitalize on Post-COVID Recovery
o Develop health and wellness tourism by promoting yoga, Ayurveda, and
naturopathy in places like Rishikesh and Haridwar.
o Provide support to businesses affected during the pandemic, such as interest-free
loans and grants.
o Launch targeted marketing campaigns to revive domestic and international
tourism.
10. Encourage Skill Development and Employment Generation
Set up vocational training centers focusing on tourism, hospitality, agriculture, and IT-
related skills.
Partner with industries to offer apprenticeship programs and on-the-job training for
youth.
Provide incentives for businesses to hire local talent, especially in rural and hilly areas.
11. Increase Public-Private Partnerships (PPPs)
Collaborate with private players for infrastructure development, such as roadways,
resorts, and industrial zones.
Facilitate joint ventures in renewable energy and agro-industries.
12. Focus on Urbanization and Balanced Development
Develop tier-2 and tier-3 towns to reduce overpopulation pressure on Dehradun and
Haridwar.
Ensure equitable development of rural and urban areas through targeted infrastructure
and economic projects.
13. Preserve and Promote Local Culture
Promote the state’s unique art, culture, and cuisine through festivals, exhibitions, and
fairs.
Create platforms for local artisans and craftsmen to sell their products online and at
tourist destinations.
