Economic survey report: Despite fiscal constraints, Himachal records increase in GSDP

The survey provides a comprehensive assessment of the state’s economy, underscoring resilience despite global uncertainties and climate-related challenges

Himachal Pradesh recorded an 8.3% real increase in Gross State Domestic Product (GSDP) and a 10.1% rise in nominal growth in 2025-26 despite various challenges like acute financial constraints, cut in Revenue Deficit Grants (RDG), and heavy losses due to natural calamities, according to the Economic Survey for 2025-26, tabled by chief minister Sukhvinder Singh Sukhu in the assembly on Friday.

Growth across sectors remains balanced, with services projected to grow at 8.6%, the primary sector at 8.4%, and the secondary sector at 7.7%, the report suggests. (File)

The survey provides a comprehensive assessment of the state’s economy, underscoring resilience despite global uncertainties and climate-related challenges.

Chief minister Sukhu has earlier stated that the RDG reduction is “badly hitting the state economy” limiting fiscal space for development spending and welfare programmes.

Tourism has rebounded sharply post-pandemic, contributing 7.77% to GSVA. Domestic tourist arrivals have surged from 32.13 lakh in 2020 to 311.47 lakh in 2025, including religious tourism, significantly boosting economic activity.

As per advance estimates, the state’s GSDP at current prices is pegged at ₹22.54 lakh crore, reflecting a growth of 10.1% over the previous year. In real terms (constant 2011-12 prices), the economy is expected to grow at 8.3%, an improvement from 6.4% in FY2024-25.

The services sector continues to dominate the economy, contributing 46.3% to Gross state value added (GSVA), followed by the secondary sector at 39.4% and the primary sector at 14.3%.

Growth across sectors remains balanced, with services projected to grow at 8.6%, the primary sector at 8.4%, and the secondary sector at 7.7%. The services sector remains the primary growth engine, with GSVA estimated at ₹2,62,581 crore and a growth rate of 8.6%.

Agriculture and allied sector

The primary sector remains crucial for rural livelihoods and food security. GSVA from agriculture and allied activities is estimated at ₹18,824 crore in FY2025-26 at constant prices, up from ₹17,362 crore in FY2024-25, marking a growth of 8.4%.

At current prices, the sector has expanded significantly, increasing by about 45%-- from ₹22,428 crore in FY2021-22 to ₹32,415 crore in FY2025-26.

The crops sector alone has grown by 35% over the same period, rising from ₹13,722 crore to ₹18,515 crore. The livestock subsector contributes 17.45% within agriculture and 2.40% to overall GSVA.

Industry and Infrastructure

The industrial sector, including mining and quarrying, is estimated to grow at 7.7% in FY2025-26, with GSVA at ₹2,66,324 crore (constant prices). At current prices, industry contributes nearly 40% to GSVA, led by manufacturing (25.32%), construction (8.42%), and utilities (6.22%).

Manufacturing is projected to grow at 5.74%, while construction is expected to register the fastest growth at 12.56%, driven by infrastructure expansion.

Power sector

Hydropower continues to be a key revenue source for the state. Government entitlement from 143 projects stands at 1,574.06 MW of saleable power. Revenue earnings reached ₹1,668 crore till December 2025, with an additional ₹249 crore expected by March 2026.

HPSEBL operates 28 hydro projects with a capacity of 589.35 MW, generating 1,973.64 million units (MU) till December 2025, likely to cross 2,200 MU by the end of the fiscal year.

Income and Inflation

Per capita income is estimated at ₹2,83,626 in FY2025-26, registering a growth of 9.8% and remaining higher than the national average.

Inflation has moderated significantly, with Consumer Price Index (CPI) levels declining across segments and nearing 1% by December 2025.