The study about Pakistan Economy related to Industry sector.

The project comprises on the

finding of Annually development reports and five year plans from 1960’s to 2003. In this decade many
up’s and down’s come in to the Industrial sector.
Pakistan has a semi-industrialized economy, which mainly encompasses textiles, chemicals, food
processing, agriculture and other industries.

The economy has suffered in the past from decades of internal political disputes, a fast growing
population and ongoing confrontation with neighboring India.

Pakistan's average economic growth rate since independence has been higher than the average
growth rate of the world economy during the period. Average annual real GDP growth rates were 6.8%
in the 1960s, 4.8% in the 1970s, and 6.5% in the 1980s. Average annual growth fell to 4.6% in the 1990s
with significantly lower growth in the second half of that decade.

Two wars with India in Second Kashmir War 1965 and Bangladesh Liberation War 1971 and
separation of Bangladesh adversely affected economic growth. In particular, the latter war brought the
economy close to recession, although economic output rebounded sharply until the nationalizations of
the mid-1970s.

Pakistan is aggressively cutting tariffs and assisting exports by improving ports, roads, electricity
supplies and irrigation projects. Islamabad has doubled development spending from about 2% of GDP in
the 1990s to 4% in 2003, a necessary step towards reversing the broad underdevelopment of its social
sector.

Third five year plan (1965-70) designed along the lines of its immediate predecessor, produced only
modest growth. The size of this plan was 500 crores, out of this total outlay, as aim of Rs three thousand
crores was to be spent in the public sector and Rs 2200 crores in the private sector. The strategy of plan
was

1. to construct heavy industries and building up infrastructure in former east Pakistan

2. to mobilize savings from agriculture to industry

. to increase government fiscal development contribution

4. increasing exports and decreasing imports

when the government of Zulfiqar Ali Bhutto came to power in 1971, planning was virtually bypassed.
THIRD FIVE YEAR PLAN (1965-1970)

Third five year plan was approved by National Economic Council (NEC) in May, 1965 and it was revised in
1966 due to war 0f 1965 with India.

SIZE OF THE PLAN: Total size of the plan was Rs.52, 000 Million out of which 30, 000 Million was
allocated for public sector and 22,000 Million was decided to be spent in private sector.

FINANCING: It was decided that 68% of total size of plan will be financed by internal sources and the
remaining 32% will be financed by external sources.

TARGETS: Growth rate 6.5% per annum Per capita income 3.5% Foreign exchange earnings to reach
Rs.4, 800 Establishment of new industries 26,414 new primary schools and 5.8 Million enrollments 710
high schools to be improved and 0.90 million enrollment 0.13 Million enrollment in inter colleges
Development of health and transport sector Reduction in income disparities between East and West
Pakistan

ACHIEVEMENT: Growth rate was 5.7% per annum Per capita income was 2.9% compounded annual
growth Income disparities between East and West Pakistan increased from 36.5% to 47.4% Food grain
production exceeded plan targets Industry targets were not achieved 6,062 primary schools and 3.19
million enrollments 650 high schools improved 0.14 Million enrollment in inter colleges

Evaluation: The war with India in 1965 resulted in a substantial reduction in the flow of external rate.
Shortfall in public sector development expenditure occurred & main priorities were distorted.
Allocations for social sector were drastically reduced. Most of important objectives were distorted due
to war

During 1965-66
During 1965-1966the pace of industrial growth was slower because of the several factors like
the effect of war with India which for sometime restricted the operation of some industries, suspension
of foreign economic aid and consequent reduction in imported industries raw material and spare parts
and diversion of some national resources to defense. But in-spite of these problems the industrial
growth maintained.

According to central statistics office the index of production of manufacturing industries

increased by 6% from201.7 in 1964-65 to 214.2 in 1965-66. There was significant increase in 65-66 in the
production of sugar, vegetable ghee, cigarettes, jute goods, art silk and rayon cloth, some varieties of
and some organic chemicals like sulphuric acid and chlorine gas. And however there were declines in the
production of cotton, textile, newsprint, straw, and paper board, packing and other paper, tea, sea salt,
cement, tyres and tubes, paints, super phosphate and few fertilizer and soda ash.
During 1966-67
The production trend during this year appears to b encouraging with the expectation of
chemical and cotton textile. The production of minerals increases very slowly. The index of minerals
production rose by 1.5% point from 174.5 to 176 during this year. It rose by 6.2 points to 182.2 during
66-67. The index is estimated to rise by 9% to 233 in 66-67.

Investment: A comprehensive industrial investment schedule for the entire third plane period aimed
ensuring fulfillment planes investment target of 830 crores. It covered 200 items involving large medium
and small industries the investment allocation is rupees 1088.53 crores in the private sectors, 586.07
crores West Pakistan and 502.46 crores for East Pakistan.

Credits: Major allocations during this year from France 16.19 million $. USSR 9.67 million $.UK 15.98
million $. WORLD BANK 9.18 million $ and Belgium 4 million $. Total allocation increase from 89.21
million $ in this year to 121.48 million $.

During 1967-68
The government entered into an agreement with the government of Poland will provide the
equipment required for the implementation of this project and it consists of 2.6 crore expenditure. In
western Pakistan during this year 143 miles of new forest roads and bridle paths were constructed and
another 150 miles are expected to be constructed. This year government had given the attention to
developed heavy and more sophisticated industries such as engineering, electrical equipment, machine
tools and petro chemicals etc.

During this year there is increase in the production of tea, salt, cotton cloth and yarn, board,
caustic soda, cement and cycle rubber tyres and tubes. The increase in the quantum index of
manufacturing industries from 100 in 1959-60 to 201.7 in 1964-65.

During 1968-69
Growth in 68-69 was 7.4% that was previously 7.8%. And in 49-50 the share go agriculture was
standing 60% which cam\e down to 46% in 68-69. This trend towards diversification is also reflected in
the pattern of exports and imports the share of primary commodities, which was 95% of our exports in
1950 to 1951 decline to 69% in 64-65 and future to 53% in 67-68 the rest being accounted for by
manufacture and semi manufacture. During 1967-68 and 1968-69 the increase in manufacturing output
in certain industries was a quite impressive. Production of sea salt and cigarettes have already exceed
the pain target, while the performance of newsprints and mechanical paper was 47%, cotton yarn
79.6%, white sugar 63.9%, vegetable ghee 68.6%, juice goods 53.4$%. During 1967-68, substantial gains
were also recorded by cotton yarn and cloth fertilizes and chemicals, writing and printing paper etc.
production of board and cycle tyres and tubes, however, declined during the year.
1. Third Five year Plan (1965-70)- A Prisoner of Extraordinary Events.
The revised total size of the second Plan was fixed at Rs. 5200 crores as compared to Rs. 2300
crores in (1960-1965). In this Plan there was a great visible investment shift from consumer goods to
capital goods industry.

If we talk about the achievement of this Plan, the performance in the industrial sector was also
far from satisfactory particularly in the large-scale industrial sector. The large-scale industrial sector
exhibited a growth rate of 10% as against 13% targeted in the Plan. The industrial sector as a whole
expanded at an annual growth rate of 7.8% instead of 10% targeted in the Plan. The small-scale industry
also performed well.

During 1965-66 there is increase in the production of tea, salt, cotton cloth and yarn, board,
caustic soda, cement and cycle rubber tires and tubes. The increase in the quantum index of
manufacturing industries from 100 in 1959-60 to 201.7 in 1964-65. Growth in 68-69 was 7.4% that was
previously 7.8%. And in 49-50 the share go agriculture was standing 60% which came down to 46% in
68-69. During 1967-68, substantial gains were also recorded by cotton yarn and cloth fertilizes and
chemicals, writing and printing paper etc. The growth rate of large scale industrial decline from 13.9% in
1969-70 to 2.8 in 1970-71 and showed a negative growth rate of 5.6 percent