As Himachal Turns 53, its Development Model Fading Away

As Himachal Pradesh (HP) celebrated its 53rd year of statehood on January 25, the foremost question was how will it overcome its challenges. The state has made landmark achievements in human development indices, but this has happened primarily with the strong support of the state and its various instruments. 

Though the state was carved out in 1948, eventually it got its full statehood on January 25, 1971. Between 1948 and 1971, the state passed through various crests and troughs—it was even a Union Territory. 

YS Parmar, the founder of Himachal and leader of the Praja Mandal movement, which advocated the merger of princely states, was instrumental in shaping HP’s destiny. It was unimaginable that a state with extreme poverty, deprivation, poor infrastructure and agricultural production, and hardly any service sector, would be ranked as one of the top states in the country. 

It is worth reiterating the two-pronged strategy that Parmar envisioned and carefully crafted in the development of the state. First, a strong land reform movement led by Communists was completely hijacked by Parmar, who implemented them from the top. Second, the state’s strong stimulus in developing social infrastructure, health, education, electricity, water supply, etc. 

How could this happen? Parmar pushed for a strong stimulus from the Centre and ensured that the state remained in the special category status. There was hardly any private capital for infrastructure development. All of this was done by the state. The Centre made sure that the state’s fiscal demands were met and ensured assistance. 

For young readers, it must be normal. But for a generation born in the 70s and before, the Himachal development model was amazing. When large parts of the country, including some economically advanced states, still go without power, HP was fully electrified in the 1980s. Despite the low human density and extremely tough terrain, electricity reached the remotest of places. This was also followed by infrastructure for health, education and animal husbandry. 

Current challenges

The current challenges flow from the paradigm shift in policies initiated in the 1990s. 

Fiscal discipline

As the realignment of forces took place in New Delhi in the 90s with a paradigm shift from the Nehruvian model to a free-market economy model, the states were also asked to restructure their governance models. The states were tagged to the Centre and fiscal changes were brought. The Centre was in no mood to fill the fiscal deficit gap, and the Fiscal Responsibility Budget Management Act (FRBM) was enacted.

The crux of the law was that the state’s fiscal deficit must not surpass 3% of its GDP—else, the state would not get Central grants. With most development grants linked through this restructuring, the states had no option but to accept it. 

How was this done? The fiscal deficit could only have been reduced by curtailing the social infrastructure and simultaneously ensuring growth. At the stroke of a pen, more than 35,000 vacant posts in some of the most important departments like IPH, health, education, electricity and public works were scrapped.

To give an example of how it impacted human resources, there were around 6 lakh electricity subscribers in the 1980s and almost 45,000 workmen in the field, operation and maintenance ensuring adequate services. Currently, when there are nearly 23 lakh subscribers but only 12,000 workmen. 

How is the large social infrastructure maintained? Instead of regular employment, work was either outsourced or provided on an ad hoc or contractual basis. Even for regular employees, a new pension system with hardly any pension guarantee was introduced. The result was for everyone to see. The National Pension Scheme dominated the December 2022 Assembly election and the BJP was voted out of power. On January 13, the new Congress government reinstated the Old Pension Scheme.  

Climate change and unmitigated disasters

The same development model was also responsible for enhancing productivity in agriculture and industry. Nature, considered sacrosanct in the mountain state, was metamorphosised into a commodity for rapacious loot and unbridled capital extraction.

State governments started unbridled commoditisation of natural resources to increase productivity and revenue. Cement and hydropower production and enhancing the tourism potential were the guiding lines. Hydropower projects were built bypassing the objections of the locals.

The impact was visible. Many villages had to be translocated owing to hydropower construction. Nathpa, Urni, and Meeru in Kinnaur are a few examples. Joshimath, in Uttarakhand, is just another example.

Change in agriculture and horticulture patterns

There agriculture sector has undergone a massive change with the entry of large corporate entities. Rich farmers have started shifting from conventional agriculture and adopting genetically modified varieties of apples and other vegetables. How far is this going to be successful? There is no clarity.

The regions which are relatively better off, particularly the vegetable-growing regions, are also under the influence of artificial intelligence. Sensors, robots, and drones are used to measure the moisture content in the field.

The state’s role is hardly visible. All this data will be collated and made saleable. This is another important area that needs to be prioritised by the government to ensure proper checks and benefits to farmers.

The gains of land reforms have started withering away. The beneficiaries of ‘nau taur’ land have already become landless. Non-agriculture employment in rural Himachal is increasing.

Urban centres are having moribund growth

The state’s urban centres are mostly administrative and a few of them are also tourist hotspots. The model of urbanisation in Himachal is quite faulty. The growth model in towns is not in sync with mountain realities. The copy-and-paste models of plains are being developed to make city development and land use plans. Climate resilient plans for secure urban habitats are not even considered. This must change with the active participation of the people in planning. 

The euphoria over how Himachal has been able to carve out its development model and create a niche in mountain development is fading away. Large-scale migration is taking place with no scope of employment. This cannot be the guiding model of development. Can the state break from the Central model of fattening large corporate entities and carve another major disruption that will be objective and based on its realities? The answer, unfortunately, is gloomy. However, the state’s residents must continuously raise pro-people issues and environmentally friendly, sustainable and resilient development strategies.

The writer is the former deputy mayor of Shimla, Himachal Pradesh. The views are personal.