The economy of Himachal Pradesh is mainly dependent upon agriculture as it contributes to more than 45% of its state domestic product, and 71% of the state's labour force is employed in this sector. Being a hilly region, the scope of agriculture is very limited, and the government promotes industrialization through various investor friendly measures. Considering Himachal Pradesh as one of the industrially backward hilly states, the Government of India announced a special economic package for the state along with other hill states (i.e. Jammu&Kashmir and Uttarakhand) to augment the process of industrialization. In this paper, an attempt was made to assess the impact of the special economic package on the growth of industries and overall development of the state by comparing it with the neighboring states. The study found that the state registered a significant growth in terms of the number of factories, capital employed, industrial employment, and capital formations during the period from 2003-04 to 2011-12 in comparison to other states.

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