Rajeev Ahal, 10th May 2020
Himachal, the idyllic hill state with some of the best Human Resource Indices amongst all of the
Indian states, has been hit hard by the Covid 19 pandemic. If we focus beyond the immediate
health dimension and turn our attention to the economic and livelihood impacts, the emerging
trends are worrisome.
The seasonal but high local incomes and employment, from tourism and hospitality sectors,
dependent on tourists coming from outside of the state, may be severely affected in the current
summer season, and this sector may remain subdued for at least another year.
This may have a domino effect on the construction industry, compounded further by the out-of-state construction labour returning to their home states. Horticultural crops (apple, tomatoes, vegetables etc.) may
retain their income potentials but will be adversely affected by labour and logistical challenges.
The consumptive demand for Fast Moving Consumer Goods, alcohol, luxury items etc. may also
fall in the short run.
There could be significant loss of local jobs due to closure of shops-small
businesses-local manufacturing, reduced trading and depressed service needs. Hydel based
energy will remain a revenue asset for state, but with an overall recessionary trend in Indian
industry and a reduced demand, revenues shortfalls may accrue in the short run.
All of these may affect excises, cesses and taxes, further strained by new unforeseen expenditures in fighting the pandemic, and possible erosion of anticipated revenues from the growth planned for this year.
HP’s per capita income of Rs.1, 95,255 (about 2600 USD) in 2019-20, which exceeded India’s
national per capita income by Rs. 60,205, may fall. The return of its elsewhere-employed sons
and daughters back to HP is another shock for many households dependent on their sizable
regular remittances that boosted consumption and home construction.
With the global and Indian economy projected to go into a non-growth phase, if not a full-blown recession (which may even stay around for some years), many may not have jobs to go back to. They will add further to the swelling ranks looking for work. All this will constrain the hitherto strong welfare role of the hill
state, and its ability to help reboot the state economy.
Given this possible scenario, how can one de-risk and rebuild the Himachali economy? Can we
raise our eyes to look beyond the current doom and gloom, to identify and chart new pathways?
Can we move ourselves from a Crisis perspective to a Re-imagined Future perspective, one
that leverages the innate strengths of Himachal and its people and converts these into
Opportunities for re-growing a different future?
Apart from the rich natural resources, our young, educated and skilled workforce of resident and
returned-migrants, with their high literacy and occupational skills (drivers, electricians, software
engineers etc) and management skills may well be our best resource. This should be our first
priority area for growth. IT and mobile telephony industry will continue to grow in India and the
world due to an increasing demand and dependence.
Strategic manufacturing by other Indian
states, offering the world non-China supply-chain options, will also need experienced people for a
quick start off. These provide space for absorption of a high number of engineers and technically
trained Himachalis, if they are courageous enough to step out again. The flipside of lockdown has
been the coming of age of the internet driven work-from-home (WFH) model. Within HP, local
entrepreneurs, investors etc. in the small towns and cities, can be supported in business ideation,
related training, access to finance, required high speed and 24×7 IT infra backbone and demand
side connects to national and global job works orders (such as software coding, medical
translations, backend financial services, HR supports etc) through service hubs and WFH spokes
leveraging the trained resident workforce.
Many big companies worldwide are looking to
outsource such services to reduce their fixed costs into permanent employees. Our state
government, NGOs and district administrations can quickly collect information of names and
available skills through simple web-based tools (e.g. google forms, own apps etc.), where people
can enter key information directly from their phones, while still being in a lock-down. This
database can help map the available human resource (quality and quantity), drive a matchingbatching process for quick and effective development and deployment of our human resource to
some of the above cited opportunities.
A second area for Himachal could be nurturing new age enterprises. Establishing Silicon Valley
type micro-hubs for innovators and the support ecosystem close to key airports and border
towns.
A cluster of future ready panchayats there can come together with the Department of
Industries to develop some degraded land as Economic Hubs and also trigger a ripple of local
jobs and incomes (housing, support staff, taxes etc.). The Baddi and Parwanoo industrial zones
already have a high number of pharmaceutical units, mostly producing generic drugs.
Can the
government work to promote strategic Covid pandemic related drug and PPE manufacture of
good quality and reasonably prices for the high Indian and global demand, which may stay strong
for a few years?
For agricultural and horticultural cash crops rendered uneconomical due to loss
of migrant labour, custom hiring centres run by agri-prenurs, successful cooperatives and Farmer
Producer Companies can rent to farmers specialised machine solutions (small power tillers,
happy-seeders, small threshers, fruit pluckers, straw bailers, drone based spraying, tech for
precision agriculture, mobile micro irrigation etc.) in each sub valley.
Government, NABARD,
banking and private sector can quickly deploy supportive business models, machine specs and
necessary capital financing. Also, the 20,000 Self Help Groups and their federations in Himachal
offer a self-organised and bank linked workforce of industrious women. A new village industry
revolution can be enabled in the state by NGOs, State Rural Livelihoods Mission, banks etc.
quickly connecting them to big marketing agencies selling designer masks and other current
demands, and also organise local traders to supply the required materials.
Exposure to the
pandemic now requires specialised care of the elderly. Many well-to-do Himachalis living outside
the state, but having parents living alone in Himachal with no one to care for them, would gladly
pay for professional home-based Geriatric care support services. These can be set up with local
private clinics as hubs, utilising returned migrants with health care skills for outreach.
Another
possible area could be home delivery services for families in self-quarantine, in collaboration with
low demand hit local wholesale suppliers in key towns.
A third area could be to push for more of sustainable and niche agriculture and horticulture crops
with high nutrition value and immune-boosting properties like kiwi fruits, berries, seebuckthorn,
specific medicinal plants, organic crops and fruits etc.
Village based dairying sector in selected
clusters, especially goat rearing for milk, which has high demand and fetches high prices in big
cities. With global supply chains potentially opening up to India, small scale food processing units
tie-ups niche export (goat cheese, jams, organic vegetables, fruits, organic bakery products etc.)
can be established through Farmer Producer Organisations. Each valley in HP offers such unique
possibilities.
In these changed circumstances, just doing more of the same from our past will not lead to
different and required results. We will also need an attitudinal and behaviour change in
Himachalis, who have historically and predominantly preferred jobs, as they offer dignity, social
acceptability, long term guarantee of salaries.
Current times require a dynamic and more
entrepreneurial spirit, with some risk taking involved. But these also offer new opportunities for
incomes and growth, in a time where job continuity itself looks difficult. A re-imagined Himachal
will need some very determined trend setting individuals and organisations, flexible start-up
capital to plant these re-imagined options and intensive handholding to grow them.
The central
and state governments, Banks, NABARD and social enterprises can support such an evolution
and focus. This space in HP is actually wide open for a whole new start-up ecosystem and
economy. The same context applies to almost all of Himalayan small states. Any takers?
……………………………………………………………………
The writer is from Himachal, working as a development practitioner over past three decades in HP, India
and Africa. He currently works for a Delhi based International Development organisation, as the Director
for Natural Resource Management and Agro-ecology. Views expressed are purely personal
