✓Before the formation of Himachal Pradesh in 1948, no attention was paid to the economic development and social welfare of the hill people.

✓None of the erstwhile hill states was having economically viable unit and exploitation of the vast natural resources of the area was not even thought of.

✓These small princely states had neither the resources nor the will power to develop their areas.

✓In 1948, when Himachal Pradesh was founded by integrating 30 erstwhile princely states, it had an area of 27,018 sqkm and the available motorable road length was mere 288 km.

✓Due to such a low state of development of roads, the Government has rightly spent more than 50% of the first Five Year Plan expenditure of 527 Lakh on the construction of roads.
Out of the total installed capacity of 4.31 MW only 3.58 KWH of electricity was generated in 1950-51.

✓Out of 8384 inhabited vilages and
11 towns, only six towns were electrified in 1950-51 through local generation system.

✓In the absence of power, industrial development could not be thought of.

✓Under the Factories Act, 1948, only three industrial units were functioning in the state, employing total 870 persons.

✓The educational standards were dangerously low and according to 1951 census literacy rate was mererly 7.98% (Males:12.97%, Females:2.49%), lowest among the states and UTs of India.

✓Per annum per hectare production of food grains was 0.51 MT.

✓The State Income (Gross State Domestic Product,  GDP) was estimated 726.49 Crore, at current prices in 1950-51.

✓Against this prevailing socio-economic structure and background, the Planning process started in the state right from the
First Five Year Plan (1951-56) itself.

Since then the state has made tremendus economic progress and today the economy of the Himahcal Pradesh is based on a number of factors like:
1. Agriculture
2. Horticulture
3. Forests
4. Hydel Power.
5 Transport & Communication
6. Tourism and Industry

All these factors will be discussed in detail in the upcoming articles.