An Introduction to economy of Sikkim
Sikkim is surrounded by vast stretches of Tibetan Plateaus in the north, the Chumbi Valley of Tibet and the Kingdom of Bhutan in the east, the Kingdom of Nepal in the west and Darjeeling district of West Bengal in the south. Sikkim has several snow-capped peaks including Kanchenjunga, the world’s third highest peak that attracts a large number of tourists from across the globe. The state has been able to bag seven out of 25 central government’s national projects to promote India as destination for adventure tourism globally.
The gross state domestic product (GSDP) of Sikkim expanded at a high compound annual Growth rate (CAGR) of 19.44 per cent between 2004-05 and 2015-16.
There has been a drastic shift in the sectoral contribution from primary and tertiary to the Secondary Sector. In 2015-16, the secondary sector contributed 67.73 per cent to the state’s GSDP at current prices. It was followed by the Tertiary Sector at 23.65 per cent and Primary Sector at 8.62 per cent. Moreover, at a CAGR of 33.91 per cent, the secondary sector has been the fastest growing among the three sectors from 2004-05 to 2015-16. It was driven by manufacturing, construction and electricity, gas & water supply.
Agricultural Sector
The state’s economy is largely agrarian, based on the terraced farming of rice and the cultivation of crops such as maize, millet, wheat, barley, oranges, tea and cardamom. Sikkim produces more cardamom than any other Indian state, and is home to the largest cultivated area of cardamom
Sikkim has a suitable Climate for agricultural and horticultural products. It supports multiple crops; viz., rice, wheat, maize, millet, barley, urad, pea, soya bean, mustard and large cardamom. Sikkim is the top producer of large cardamom, contributing over 80 per cent to India’s total production. As per the state budget 2016-17, Sikkim got certified as first fully organic state in India by the Central Ministry of agriculture and Farmers’ Welfare as well as other recognized agencies of the country.
Sikkim has been transformed as the first Organic State of the country and the world by design and have opened unlimited opportunities in sectors like Agriculture, Horticulture-2/”>Horticulture and Animal Husbandry.
Currently, state is exporting large cardamom, ginger, buckwheat, turmeric and cymbidium orchids. Our aim has been to fulfil the domestic market and export our surplus production outside the state.
Under the National Mission on Agricultural Extension & Training, new emerging organic technologies are being disseminated to the farmers through training, demonstration, farm schools, exposure visits, formation of commodity interests groups and Food Security groups, etc.
The Sikkim Organic Mission is introducing an e-voucher card system as an effective mechanism to distribute assistances under the Direct Benefit Transfer for ensuring that the Scheme’s funds are channeled directly to the beneficiaries. This would be a first of its kind initiative in Sikkim and probably in the Country as well.
There has been a drastic shift in the sectoral contribution from primary and tertiary to the secondary sector. The overall performance of the economy of the state during 2015-16 was encouraging. At a CAGR of 33.91%, the secondary sector witnessed the fastest growth among the three sectors during 2004-05 to 2015-16. It was driven by manufacturing, construction and electricity, gas & water supply. In 2015-16, the secondary sector contributed 67.73% to the state’s GSDP at current prices.
The state follows the North East Industrial Investment Promotion Policy, 2007, which provides several incentives and concessions for investment. Institutional support is provided through various central and State Government agencies viz., North East Council, Ministry of Development of North Eastern Region and Commerce and Industries Department.
The main industries like Brewing, distilling, tanning and watchmaking are located in the southern regions of Sikkim.
A small mining Industry exists in the state, extracting Minerals such as copper, dolomite, talc, graphite, quartzite, coal, zinc and lead. Sikkim has identified Rangpo-Gangtok, Melli-Jorethang, Jorethang-Rishi and Ranipool-Gangtok as industrial corridors with provision for giving land to investors on a lease basis.
The units that are engaged in the manufacturing sector are mainly dealing with pharmaceuticals, chemicals, liquors, foam mattresses, food products, iron rods, etc.
Sikkim has identified agro-based industries, horticulture and floriculture, minor forest-based industries, Dairy/”>ANIMAL HUSBANDRY AND DAIRY products, tourism-related industries, IT including knowledge-based industries, precision oriented high value-low volume products, hydro-power, tea, Education and hospitality as thrust sectors.
The Information Technology (IT) Department, Government of Sikkim is in the process of setting up a state-of-the-art IT Park and National Institute of Electronics and Information Technology (NIELIT) at Pakyong.
The state has attracted Foreign Direct Investment (FDI) Equity inflows worth US$ 3.93 billion during the period April 2000 to March 2016, according to data released by Department of Industrial Policy and Promotion (DIPP).
Tertiary sector
Industrial sector was followed by the tertiary sector at 23.65% and primary sector at 8.62%. The tertiary sector grew at a CAGR of 15.23% between 2004-05 and 2015-16. The growth has been driven by trade, hotels, real estate, finance, insurance, transport, communications and other Services. The primary sector grew at a CAGR of 15.55% between 2004-05 and 2015-16.
Tourism provides the main thrust to the economy. With the tranquil climate, the natural beauty and the fine cultural heritage of Sikkim, the growth of tourism has immense possibilities. There are large number of places of tourist attraction particularly the snow clad Mountains, the lakes and unspoiled forest areas and valleys of flowers. The advantage of having very fine monasteries in Sikkim can also be taken to attract Buddhist tourists from countries like Japan and the South Eastern countries.
Sikkim was the first to promote the concept of eco-tourism, village tourism and home stay tourism in the country. This essential concept promoting man-nature affinity has been recognized as a new model of tourism. Promotion of village tourism, homestay, cultural tourism, trekking tourism, ecotourism, wellness tourism, flori–tourism and adventure tourism has given fillip to the tourism trade in the state where a large of number of people are engaged under different EMPLOYMENT opportunities.
Sikkim has been featured and ranked 17th in the New York Times “52 best places to go in 2017”. Similarly, Sikkim has also been featured as the best destination to visit in the world in 2014.
The Year 2017 has been declared as the Year of Sustainable Tourism for Development, an area of development in which Sikkim has already made considerable strides with eco-friendly tourism and the development of innovative initiatives such as Chaar Dham and Tathagatha Tsal. Additionally, Gangtok City has been recognized as the safest tourist destination in the country.
FDI inflows into the state during April 2000 to March 2016 reached to US$ 3.93 billion. A major part of these investments was directed towards power generation There are 27 completed electricity projects in the state. The central government has invested heavily in the hydro electric power generation projects in Sikkim Himagiri Hydro Energy Pvt Ltd. started the initial construction work of their new project namely; 300 MW Panan Hydro Power project.
Recent Developments
Allocated budget for the industry and minerals sector in Sikkim is estimated to be US$ 9.46 million during 2016-17. Out of this total allocation, villages and small industries would be allocated US$ 5.97 million and large industries would be allocated US$ 2.75 million. The remaining US$ 0.73 million would be allocated to the non-ferrous mining and metallurgical industries of the state.
Sikkim’s geographical and environmental conditions are quite conducive for development of floriculture at a higher altitude. The state is also considered to be the Kingdom of flowers and is an innovator in cultivating Gladiolus.
The state government is also laying emphasis on improving organic farming in the state. During 2015-16, the state government recognized the existing MPCS in the state to promote and enhance organic farming in the state. As a result of these initiatives, the state was certified as the first fully organic state in India, by the Central Ministry of Agriculture and Farmers’ Welfare as well as other recognized agencies of the country.
It is estimated that Sikkim has a peak potential capacity of 8,000 MW and a steady 3,000 MW of hydroelectric power. About 28 hydropower projects are being set up in the state under the public-private PARTNERSHIP (PPP) mode.
Other Key achievements
Nirmal Rajya
Sikkim became the first Nirmal Rajya in the country in 2008 by achieving 100% sanitation coverage and the first State to achieve Open Defecation Free (ODF) status in the beginning of 2016.
Zero POVERTY
Sikkim is the State with zero hunger and the first poverty free State in India. This goal has been achieved through consistent policy prescription and a rigorous implementation regime.,
Sikkim is a small state in the eastern Himalayas. It is bordered by Bhutan to the north, China to the east, Nepal to the west, and West Bengal to the south. The state has a Population of about 600,000 people and a land area of about 7,000 square kilometers.
The economy of Sikkim is based on agriculture, tourism, and government services. Agriculture is the largest sector of the economy, accounting for about 30% of GDP. The main crops grown in Sikkim are rice, maize, wheat, and potatoes. Tourism is also a major Source Of Income for the state, with about 2 million tourists visiting each year. The government is the largest employer in Sikkim, accounting for about 20% of jobs.
Sikkim has a number of challenges, including a small population, a lack of natural Resources, and a remote location. However, the state also has a number of opportunities, including its beautiful scenery, its unique culture, and its growing economy.
Agriculture
Agriculture is the largest sector of the economy of Sikkim, accounting for about 30% of GDP. The main crops grown in Sikkim are rice, maize, wheat, and potatoes. Sikkim is also a major producer of tea and cardamom.
The state has a number of advantages for agriculture, including a temperate climate, fertile land, and abundant water. However, the state also faces a number of challenges, including a small population, a lack of Natural Resources, and a remote location.
Industry
The industrial sector of Sikkim is relatively small, accounting for about 10% of GDP. The main industries in Sikkim are Food Processing, textiles, and tourism.
The state has a number of advantages for industry, including a low cost of labor, a skilled workforce, and a favorable investment climate. However, the state also faces a number of challenges, including a small market, a lack of Infrastructure-2/”>INFRASTRUCTURE, and a remote location.
Tourism
Tourism is a major source of income for the state of Sikkim, with about 2 million tourists visiting each year. The main tourist attractions in Sikkim are its beautiful scenery, its unique culture, and its growing economy.
The state has a number of advantages for tourism, including its beautiful scenery, its unique culture, and its growing economy. However, the state also faces a number of challenges, including a small population, a lack of infrastructure, and a remote location.
Infrastructure
The infrastructure in Sikkim is relatively underdeveloped, with a number of roads and bridges in need of repair. The state also has a limited supply of electricity and water.
The state is working to improve its infrastructure, with a number of projects underway to upgrade roads, bridges, and power Plants. The state is also working to improve its Water supply and sanitation facilities.
The Human Development index of Sikkim is 0.709, which is above the national Average of 0.640. The state has a high Literacy rate and a low infant mortality rate.
The state is working to improve its human development index, with a number of projects underway to improve education, Health care, and social welfare. The state is also working to reduce poverty and inequality.
Government Policies
The government of Sikkim is committed to Economic Development and social welfare. The state has a number of policies in place to promote economic growth, including tax breaks for businesses and investment in infrastructure. The state also has a number of policies in place to promote social welfare, including free education and healthcare for all citizens.
Challenges and Opportunities
Sikkim faces a number of challenges, including a small population, a lack of natural resources, and a remote location. However, the state also has a number of opportunities, including its beautiful scenery, its unique culture, and its growing economy.
The state is working to overcome its challenges and capitalize on its opportunities. The state is working to improve its infrastructure, attract investment, and promote tourism. The state is also working to improve the lives of its citizens by providing education, healthcare, and social welfare.
Conclusion
Sikkim is a beautiful state with a lot to offer. The state has a number of challenges, but it also has a number of opportunities. The state is working to overcome its challenges and capitalize on its opportunities. The future of Sikkim is bright.
Q: What is the economy of Sikkim like?
A: Sikkim is a small state in the eastern Himalayas with a population of just over 700,000 people. The economy is based on agriculture, tourism, and government services. Agriculture is the largest sector of the economy, accounting for about 40% of GDP. The main crops are rice, maize, wheat, and potatoes. Tourism is also a major source of income, with over 2 million tourists visiting the state each year. The government is the largest employer in the state, accounting for about 30% of all jobs.
Q: What are the main challenges facing the economy of Sikkim?
A: The main challenges facing the economy of Sikkim are poverty, Unemployment, and Infrastructure Development. Poverty is a major problem in Sikkim, with about 20% of the population living below the Poverty Line. Unemployment is also a problem, with about 10% of the workforce unemployed. Infrastructure development is also a challenge, with the state having a poor road Network and limited access to electricity and water.
Q: What are the government’s plans to address the challenges facing the economy?
A: The government of Sikkim has a number of plans to address the challenges facing the economy. These include:
- Increasing investment in agriculture to improve productivity and incomes.
- Promoting tourism by developing new tourist attractions and improving infrastructure.
- Creating jobs by developing new industries and businesses.
- Improving infrastructure by building new roads, schools, and hospitals.
Q: What are the prospects for the economy of Sikkim in the future?
A: The prospects for the economy of Sikkim in the future are good. The state has a number of strengths, including a young population, a beautiful natural Environment, and a strategic location. The government is also committed to economic development and has a number of plans to address the challenges facing the economy. With these factors in mind, it is likely that the economy of Sikkim will continue to grow in the future.
- Sikkim is a state in India. True or False?
- The capital of Sikkim is Gangtok. True or False?
- The population of Sikkim is over 700,000. True or False?
- The main language spoken in Sikkim is Nepali. True or False?
- The main religion in Sikkim is Hinduism-2/”>Hinduism. True or False?
- The main economic activity in Sikkim is agriculture. True or False?
- The main exports of Sikkim are tea, cardamom, and ginger. True or False?
- The main imports of Sikkim are petroleum products, machinery, and food. True or False?
- The main tourist attractions in Sikkim are the Nathu La Pass, the Yumthang Valley, and the Kanchenjunga National Park. True or False?
- Sikkim is a popular destination for trekking, mountaineering, and white-water rafting. True or False?
Answers:
1. True
2. True
3. False (610,577 as of 2011)
4. True
5. True
6. True
7. True
8. True
9. True
10. True