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How did Haryana become the state with the highest per capita income in India?

How did Haryana become the state with the highest per capita income in India?

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  • GS 3 || Economy || Structure of the Indian Economy || Regional Imbalances

Why in news?

Haryana become the state with the highest per capita income in India

Introduction

  • Haryana became a separate state on November 1, 1966. It was originally a part of the Indian state of Punjab.
  • It takes up 1.3 percent of the country’s total area. It is flanked on all sides by the states of Himachal Pradesh to the north, Uttrakhand to the northeast, Rajasthan to the south, Uttar Pradesh and Delhi to the east, and Punjab to the northwest in India’s northwestern area.
  • Its capital, Chandigarh, is shared with the Punjab state.
  • The state is one of India’s main automobile hubs, producing two-thirds of the country’s passenger cars, 50% of its tractors, and 60% of its motorcycles. The state has also established itself as a hub for the knowledge economy, which includes IT and biotechnology. Haryana is the third-largest software exporter and one of the most sought-after locations for IT/ITeS facilities.
  • According to the state’s advance forecasts for 2021-22, the state’s GSDP at current prices will be Rs. 8,87,252 crore (US$ 121.77 billion), up 7% YoY. Haryana’s GDP growth is expected to be 15.8% in FY22 at current prices.

Industries:

  • Automotive, information technology, agriculture, and petrochemicals are the major sectors in Haryana. Automobile and automotive component manufacturers like the state. It manufactures two-thirds of all passenger cars, half of all tractors, and two-thirds of all motorcycles in India. The Escorts Group, Hero MotoCorp Ltd, Maruti Suzuki India, and Yamaha Motors are just a few of the well-known automotive companies based in Haryana. The state has also been designated by the federal government as an industrial centre.
  • Haryana has a strong IT sector that is chosen by IT/ITeS facilities all over the world. It is India’s third-largest exporter of IT software. With a total value of US$7.2 billion in software exports from 2016 to 2017, the state accounted for 6.2 percent of India’s software exports.
  • Agriculture, particularly food grains, is very important. Haryana accounted for 7% of the country’s agricultural exports from 2016 to 2017, and food grain production was 17.48 million tonnes from 2017 to 2018. Agricultural items worth US$1.3 billion were exported during the same time period. In reality, Haryana produces more than 60% of the basmati rice consumed in India.
  • Haryana is India’s fourth-largest cotton producer. It accounts for around 6% of the country’s total output. It has a competitive edge in the textiles sector, which employs over one million people, due to its availability as a raw material for textiles. In FY 18, it exported $887.84 million worth of cotton-made clothing.
  • Haryana’s economy also relies heavily on petrochemicals.Panipat Refinery was built in 1996 by the Indian Oil Corporation Limited and has a refining capacity of 15,000 million metric tonnes per year (MMTPA). Indian Oil Corporation Ltd (IOCL) is the other major player, with a refinery in Panipat with a capacity of 15 million MMTPA.

Structural transformation of the state’s economy:

  • Agriculture & Allied Sectors: Agriculture and Allied Sectors is made up of three sub-sectors: agriculture, forestry and logging, and fisheries. Agriculture, which includes crop husbandry and dairy production, accounts for around 93 percent of the GSVA of Agriculture and Allied Sectors. The contribution of the forestry and fisheries sub-sectors to the GSVA of Agriculture and Allied Sectors is only about 5% and 2%, respectively, implying that these two sub-sectors have a relatively small impact on overall growth of Agriculture and Allied Sectors.
  • Service sector:At constant prices (2011-12), the Services Sector’s share of the GSVA climbed to 50.2 percent in 2018-19. The increase in the Services Sector’s share of GSVA represents a structural shift in the State’s economy, moving it closer to the essential structure of a developed economy.

Investing from abroad:

  • Foreign direct investment (FDI) inflows were US$79.76 billion from April 2000 to June 2018.
  • 19 Between 2015 and 2018, the state received US$11.93 billion in foreign direct investment.
  • The services, real estate, and electrical industries all benefited from FDI. Haryana’s state government signed ten Memorandums of Understanding (MOUs) with the United Kingdom in May 2018, totaling US$232.74 million in investment.
  • Foreign Direct Investment (FDI) inflows in Haryana stood at US$ 1.7 billion in FY21 and were US$ 2.42 billion between October 2019 and March 2021.

Why Haryana got limelight?

  • Krishi Kiosk online service: In June 2019, the Krishi Kiosk online service for farmers was established to provide information on the government’s current and prospective programmes, as well as to assist them in filing claims under the Pradhan MantriFasalYojana.
  • Automakers and car component manufacturers choose to locate in Haryana. The state is home to a slew of major automakers. Haryana’s automobile and auto component exports increased from US$ 1.070.3 million in FY20 to US$ 618.7 million in FY21.
  • IT industry:With over 400 IT and ITeS companies, Gurgaon has become a favoured destination for the IT industry in north India.
  • Organic farming: Haryana promotes organic farming vigorously, providing financial help to farmers for the production and usage of vermicompost. Agriculture is one of the most important sources of employment in rural Haryana, with significant potential for value addition and exports. In fiscal years 20 and 21, the state exported a major agricultural product (basmati rice) worth US$ 2,290.71 million and US$ 1,527.49 million, respectively.
  • Thriving textile hubs: In Haryana, districts like Panipat, Gurugram, Faridabad, Hisar, and Sonepat have grown into thriving textile hubs. One of Haryana’s main exports is readymade cotton clothing. One of Haryana’s main exports is readymade cotton clothing. In FY20, exports totaled US$ 834.87 million, while in FY21, they totaled US$ 385.08 million.

Hurdlesin growth of Haryana:

  • Poorest child sex ratio: According to census 2011, Haryana has the poorest child sex ratio (834) and sex ratio (879) in the country.
  • Crime against women: In the state, the rate of crime against women is extremely high. According to data from the National Crime Records Bureau (NCRB), Haryana ranked first among all states in terms of gang rapes in 2016.
  • High rate of foeticide: Because of the high rate of foeticide in Haryana and the resulting lack of females, there is a prevalent practise of trafficking women from India’s poorest regions.
  • Drop in the water table: Though Haryana is India’s largest agricultural state, it is facing new issues, such as a dramatic drop in the water table due to excessive and irrational fertiliser use, and agriculture has nearly become unprofitable due to high input costs.

Conclusion:

The State Government of Haryana has been committed to creating a progressive business environment. The state offers a wide range of fiscal and policy incentives for businesses under the Industrial and Investment Policy, 2011. Haryana ranked the third best state in the country under ease of doing business in the Business Reforms Action Plan 2017. As of October 2020, the state had seven exporting Special Economic Zones (SEZs).