Economic Survey Pakistan 2009 10

Economic
Survey
of
Pakistan
2009-10
published by
accountancy
accountancy.com.pk
This page left intentionally blank.
StateoftheEconomy
Executivesummary
A measure of macroeconomic stability achieved over the past two years has kindled a moderate
recovery in the economy, despite one of the most serious economic crises in the countrys recent
history.Theeconomygrewbyaprovisional4.1%intheoutgoingyear,afteramodestgrowthof1.2%in
200809.However,therecoveryisstillfragileandthestabilizationneedstobeconsolidatedsothatthe
gainsoverthepasttwodifficultyearsarenotlost.
First,thedurabilityoftheeconomicturnaroundisfarfromassuredgiventhesignificantchallengesthe
economy faces. Second, not all sectors of the economy or regions of the country appear to have
participated so far in the modest upturn. Finally, in order to meet the employment aspirations of the
largenumberofentrantstothelabourforce,ahighersustainedgrowthratewillneedtobeachievedin
themediumterm.
Acombinationoflimitedfiscalspaceandrisingspending,debt,andinflationarypressures,significantly
reducethegovernmentsabilitytospendinordertostimulatetheeconomy.Underthecircumstances,
the prudent course for policy in the near term remains the pursuit of greater fiscal consolidation
through domestic resource mobilization, in conjunction with reducing the size of government, and
improvingtheefficiencyofpublicsectorspending.
The macroeconomic context remains difficult in the near term with continuing challenges. The global
economy remains in turmoil, with uncertain prospects for demand for Pakistans exports. In addition,
theenergyandwatershortage,andtheinternalsecuritysituation,couldconstraingrowthin201011.
However,theeconomycouldbenefitfromlargeinitialproductivitygainsascapacityutilizationbeginsto
increase from a low base. For the longer term, however, without a resolution of Pakistans perennial
structural challenges, such as raising the level of domestic resource mobilization or promoting higher
productivity in the economy, growth and investment will continue to be constrained, and the growth
prospectsvolatile.
Growth
Despite severe challenges, the economy has shown resilience in the outgoing year. Growth in Gross
DomesticProduct(GDP)for2009/10,onaninflationadjustedbasis,hasbeenrecordedataprovisional
4.1%.ThiscompareswithGDPgrowthof1.2%(revised)inthepreviousyear.
For the outgoing year, the Agriculture sector grew an estimated 2%, against a target of 3.8%, and
previous years growth rate of 4%. While the Crops subsector declined 0.4% over the previous year,
Livestock posted a healthy rise of 4.1%. Industrial output expanded by 4.9%, with Large Scale
Manufacturing (LSM) posting a 4.4% rate of growth. The Services sector grew 4.6%, as compared to
1.6%in200809.
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published by Accountancy
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EconomicSurvey200910
Overall, the Commodity Producing Sectors are estimated to have expanded at a 3.6% pace, which
representsasignificantturnaroundfromtheanaemicgrowthratesoftheprevioustwofiscalyears.
The stronger pace of economic growth in 200910 has occurred on the back of several favourable
developments,whichhaveincluded:
x Substantial transfers to the rural sector over the past two years via the governments crop
support price policies, which, combined with higher worker remittances, have sustained
aggregatedemandintheeconomy;
x A largerthanexpected cotton output, which offset the moderately negative impact on the
wheatcropcausedbyadelayinseasonalrains;
x AnongoingimprovementinexternaldemandforPakistansexports,mainlytextiles;
Therevisionofpreviousyearsgrowthrate,adownwardadjustmentfromaprovisional2%toarevised
1.2%, has also provided support to the headline growth rate for the current year, with the impact
estimatedatoveronepercentagepoint.
The more positive outturn for economic growth in the current fiscal year comes in spite of costs the
economyhashadtobearinthelasttwoyearsonaccountoftheinternalsecuritysituation,combined
with the severe energy shortfall. The latter is estimated to have reduced overall GDP growth by
approximately2.0%in200910.Despitethesecuritysituation,overallmilitaryspendingasaproportion
ofbudgetoutlayshasdeclined.AnotherfocushasbeentherehabilitationofInternallyDisplacedPersons
(IDPs)andreconstructionofaffectedareas.Itispertinenttonotethatduring2009,Pakistanhadoneof
thelargestIDPspopulationintheworld,withanestimatedover3millionpeopledisplacedfromtheir
homesinSwat,Bajaur,Malakanddivision,andSouthWaziristanagency(SWA).
Thetimelyavailabilityofwaterforagriculturewasalsosignificantlylowerthisyear,continuingasecular
trendof declineoverthe pastseveralyears.WateravailabilityhasnowbecomeoneofPakistanstop
intergenerationalpolicyanddevelopmentconcerns.
A shortfall in the inflow of external assistance, including from the Friends of Pakistan consortium,
combinedwithdelaysinthereleaseofrefundsfromtheCoalitionSupportFund,ledtoheavyborrowing
by the government in domestic credit markets, leading to valid fears of crowding out of credit to the
privatesector.
Signs of a turnaround in segments of the economy notwithstanding, there are continuing areas of
concernandreasonsforcaution.Therecoveryineconomicgrowthisfragile,andwillremainsotillthe
weaknessesinthemacroeconomicframeworkareforcefullyaddressed.Inordertoeffectivelyprovide
sustainableemploymentopportunitiesfortheyoungentrantstothelabourforce,ahighergrowthwill
beneeded.Infact,according tothelatestLabour ForceSurvey (for200809),theunemploymentrate
hasincreasedto5.5%(from5.2%),largelydue totheincreaseinurbanunemployment to7.1%(from
6.3%).
Furthermore, the observed trend of improvement in the headline growth rate is likely to have been
restrictedtothemoreformal,andhencelargerscale,partoftheeconomy,givenitsrelativelygreater
insulationfromenergyshortages.Thesmallandmicroenterprisesectors,whichemploythebulkofthe
nonagricultural labour force, and are less well captured in the national accounts data, are much less
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insulated, and therefore significantly more vulnerable to shocks such as wide spread disruptions to
energysupply.
Itisimportanttoaddressthestructuralconstraintstolongrunsustainablegrowth.Thiswillalsoprovide
greatervisibilitytomarketsandinvestorswithregardtoPakistanseconomicprospectsinthemedium
tolongerterm,andwillbeakeycatalystforhigherprivatecapitalinflowsandinvestment.
Giventhelongstandingconstraintsunderwhichmacroeconomicpolicyisoperating,withhighinflation,
lowdomesticresourcemobilization,andrisingdebtservicingpressure,itisclearthatPakistancannot
affordanexpansionarypolicystanceatthisstage.Apolicystimulus,withouttherequisitereservesor
fiscal space, will only worsen macroeconomic imbalances. On the other hand, greater fiscal
consolidationcanhavelongerlastingandmorefarreachingeffectsongrowth,byreducingthecrowding
outoftheprivatesectorthroughpublicsectorborrowingleadingtolowerinterestrates.
Investment
At current market prices, Gross Fixed Capital Formation (GFCF) has been estimated to have declined
0.6%,afterrecordinga5.5%increasein200809.Adeclineinfixedinvestmentbytheprivatesectorhas
accountedfortheoverallchange,withanestimatedcontractionof3.5%fortheyear.Thebulkofthe
declinehasoccurredinElectricity&Gas,LargeScaleManufacturing,Transport&Communication,and
Finance&Insurance.
Clearly,thisdevelopmentisnotsalutaryforthelongrunprospectsoftheeconomy.However,giventhe
challengingcircumstancesinwhichtheeconomyhadtooperateduring200910,itisnotsurprisingthat
the private investment response has remained subdued. A substantial decline in Foreign Direct
Investment(FDI)inflowsfortheperiodalsocontributedtothedeclineinfixedinvestmentin200910.
FDIaccountsforahighshareofgrossfixedinvestmentinPakistan,withashareofcloseto20percent.
ThedeclineinFDIinflowswasinlinewiththesteepdropinglobalflowsofForeignDirectInvestment
(FDI),whichfell32percentin2009accordingtoestimatesoftheInternationalInstituteofFinance(IIF).
FortheperiodJulytoApril200910,FDItotalledUS$1.8billionascomparedtoUS$3.2billioninthe
sameperiodofFY09.Thisrepresentsadeclineof45percent.
AlargepartofthedeclineinFDIfortheperiodwasrecordedunderTelecommunications(anetdecline
ofUS$607million),andFinancialServices(afallofUS$548million).Combined,thedeclineinthesetwo
sectors,whichrelatedto afewlumpytransactionslastyear, amountedto81percent oftheoverall
reduction in FDI in 200910. Investment levels in some sectors remained healthy, including in Oil and
Gasexploration(FDIofUS$605million),Communications(US$222million),Transport(US$104million),
Construction(US$86million),andPaperandPulp(US$81million).Despiteasteepdecline,inflowofFDI
intoFinancialServiceswasrecordedatUS$133millionfortheperiod.
AworryingdevelopmentwasthelargenetdisinvestmentrecordedundertheITServicessectorforthe
year(amountingtoUS$95million).Overall,outofthemajorindustrycategories,12recordedhigherFDI
fortheperiod,while24industrieswitnessedanetreductioninFDIinflow.
Stabilization
Pakistanhasachievedimpressiveinitialgainsinrestoringmacroeconomicstabilityintheaftermathof
thebalanceofpaymentscrisisof2008.Asaresultofdeterminedpolicyeffort:
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x The fiscal deficit was reduced to 5.2 percent of GDP in 2008/09, from 7.6 percent of GDP in
2007/08,afiscaladjustmentof2.4percentofGDP.For2009/10,thefiscaldeficitisaimedtobe
keptincheckat5.1percentofGDP,despitetheabsorptionofunprecedentedsecurityrelated
spending.
x The external current account deficit was contained to 5.6 percent of GDP (US$ 9.3 billion) in
2008/09,fromahighof8.3percentofGDPin2007/08(US$13.9billion).Thecurrentaccount
deficitisexpectedtodeclinetounder3percentofGDPinthecurrentyear;
x Foreignexchangereserveshavebeen rebuilttonearlyUS$15 billion,from theirlowof under
US$6billioninOctober2008,thoughmuchoftheaccumulationisduetoreleasesfromtheIMF;
x Inflationdeclinedfrom25%inOctober2008,toarecentlowof8.9%inOctober2009,thoughit
hasacceleratedsharplyofrecentandisshowingpersistence;
x InternationalcreditratingagenciesupgradedPakistan(fromCCC+toBbyS&P,whileMoodys
reviseditsoutlooktoStable[August2009]);
However, challenges in consolidating these early gains have emerged, with inflation in the economy
reappearing,andfiscalpressuresincreasing.
Inflation
Afteraperiodofcontainment,inflationarypressurehasintensifiedsinceOctoberlastyearonaccountof
anumberofadversedevelopments,includingthewashingoutofthebaseeffectfromthepreviousyear
andasharpspikeinglobalcommoditypricesthathaspersistedsince2008andwhichisexertingstrong
upward pressure on domestic prices. To some extent, this also reflects the excessive public sector
borrowing, as well as adjustments in public utility prices, generated by losses in the public sector
enterprises,especiallyelectricity.
As a result, after easing to a recent low of 8.9% in October 2009, overall CPI inflation accelerated to
13.3%yearonyearinApril,withfoodinflationat14.5%andnonfoodinflationat12.2%.Coreinflation,
asmeasured bytherateofincreasein pricesof nonfood,nonenergy componentsofthe CPIbasket,
registeredanincreaseof10.6%yearonyear.Onaperiodaveragebasis,overallinflationwasrecorded
at11.5%forJulytoApril.TheStateBankofPakistanexpectstheaverageCPIinflationforthecurrent
fiscalyeartoremaincloseto12%.
Therefuellingofinflationarypressureisevidentinallpriceindices,withtheWholesalePriceIndex(WPI)
risingsteeply,from,from0.3%inAugust2009to22%inApril2010.Similarly,theSensitivePriceIndex
(SPI)hasrecordeda16.7%yearonyearincreaseforApril,versus6.7%inOctober2009.
The resurgence of inflation is not restricted to Pakistan and is both a global as well as a regional
phenomenon, though with varying orders of magnitude. Global food inflation, as proxied by the UNs
Food and Agricultural Organisations FAO Food Prices Index, had risen to 20 percent yearonyear in
January 2010, before declining to 13 percent in April, while Indias food price inflation rose over 19
percentyearonyearinDecember2009,beforesettlingat17percentinMarch.Bycomparison,year
onyearCPIfoodinflationinPakistanwasrecordedat14.5percentinApril.
Intermsofmitigationstrategies,policyoptionshavebeenlimitedformuchofthecurrentfiscalyearin
thebackdropofhighandrisinginternationalcommodityprices.Importsundertheseconditionsare
not likely to dampen domestic prices, except to the extent of excess pressure caused by domestic
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StateoftheEconomy
shortfalls,ifany.
Improved availability through better administrative measures against hoarding is likely to have some
effect at the margin. This will have a greater effect, however, if employed in conjunction with close
vigilanceofuseofbankcreditforcommoditypurchasesbytheprivatesector.Therevivaloftheprice
magistracysystemcanalsobeaneffectivelocalizedtoolinthefightagainstpriceinflationinessential
fooditems.
In the longer run, improvements in agricultural productivity hold the key to mitigation of food price
inflation.Sofar,governmentshavefollowedanextensivefarmingpolicy,usingthecropsupportpriceas
an intervention tool. However, there are clear limitations to this strategy, including the diminishing
responsivenessofoutputtopriceincentives,theimpactonthegeneralpricelevel,andtheimplication
for recourse to budgetary resources, especially in the case of wheat. A shift to more intensive
agricultureistheneedofthehour,withreturnstofarmerslinkedtobetteryields(volumebased)rather
thantoapricebasedmechanismofsupport.
Afurthercriticalelementinthecontainmentofpricepressureintheeconomywillbecontinuationof
prudent macroeconomic policies, including monetary policy, which is essential to prevent a spillover
fromfoodandenergycomponentsoftheCPItothebroaderhouseholdconsumptionbasketwhichto
someextentisinevitableunderthecircumstances.Demandmanagementisstillanessentialcomponent
oftheoverallpolicymixtopreventanentrenchmentofinflationaryexpectations.Segmentsofsociety
vulnerabletotheeffectsofpolicyinducedpriceadjustmentswillrequirewiderbutbettertargeted
coverageofsocialsafetynets.
Poverty&IncomeInequality
In the absence of an official recent poverty survey, it is unclear what the distributional effects of
developmentsintheglobalaswellasdomesticeconomiclandscapeoverthepasttwoyearshavebeen.
Thereductionininflationfrom25percenttosingledigitsrepresentsthemostsignificantbenefitofthe
stabilization as far as the poor are concerned. Yet greater unemployment and the fairly steep
adjustment in administered prices of food and energy, has, in all likelihood, adversely impacted
vulnerable segments of the population, especially those on low and fixed incomes, and in the urban
areas.
On the other hand, a substantial rise in inflows of worker remittances, partly in response to a
government policy initiative, combined with unprecedented transfers in 2008 and 2009 to the rural
economy under the governments crop procurement program, are likely to have provided significant
supporttolargesegmentsofthepopulation.CashtransfersundertheBenazirIncomeSupportProgram
(BISP),amountingtoanestimatedRs.35billionin200910,areverylikelytohavebeenanadditional
sourceofsupporttothoseinneed.
Hence,onthewhole,amorecarefulexaminationofthedistributionalimpactofrecentdevelopmentsis
required,inordertodesignbettertargetedpolicyresponses.
Publicfinances
Pakistanspublicfinanceshavecomeunderincreasingstrainoverthepasttwoyearsdue,inlargepart,
to substantial outlays on electricity subsidies. Despite a sharp upward adjustment over the past two
years, amounting to over 60% for some consumer categories, electricity tariffs have still not reached
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costrecovery for the public sector utilities. In large part, this is due to two adverse developments in
operationformuchof thelastoveroneyear.First, lowerrainfallreduced powergenerationfromthe
dams.Second,theadverseshiftintheenergygenerationmixtowardsfueloil,hasbeenaccompaniedby
aneardoublingofinternationaloilpricesbetweenJanuary2009andApril2010.
Thecontinuedhaemorrhagingoffiscalresourcesbythepowersectorisalsopartlyaresultofunchanged
endusertariffsbetween2003and2007.
Lower than budgeted external assistance pledges also compounded difficulties in fiscal management
during200910.Itledtosharpcutbacksinoutlaysforthepublicsectordevelopmentprogram,which
hadbeenpitchedatanunrealisticallyhighlevel.
Theheavyrecoursebythegovernmenttoborrowingfromthedomesticbankingsystemledtofearsof
crowdingoutoftheprivatesector.Howeverthiswasobviatedbyweakcreditdemandfromtheprivate
sector, as well as improved liquidity in the banking system. Nonetheless, there was an unintended
consequence:interestratesmovedupwardasaresult.
Afterasluggishstart,however,anddespiteadifficulteconomicsituation,taxcollectionhasrisennearly
14%forJulytoApril20092010,ascomparedtothecorrespondingperiodof200809.Asapercentof
GDP,however,taxcollectionremainslow.
Alltold,thedevelopmentsoutlinedabovearelikelytoresultinamoderateovershootofthebudgeted
target for the overall fiscal deficit. Against a budgeted 4.9% of GDP, the revised outturn in 200910 is
projectedtobe5.1%.
During the outgoing year, the basis was laid for two fundamental, potentially gamechanging,
developments in public finances. First, the Seventh National Finance Commission (NFC) Award was
successfullyconcludedafteralapseof19years,withafundamentalshiftinthebasisfordetermining
thevertical(fromCentretoProvinces),aswellashorizontal(betweenProvinces)distribution.Effective
fromJuly1,2010,the7thNFCAwardwillmorethandoublethequantumofannualresourcetransferto
the Provinces. With the devolution of expenditures to the Provinces under the 18th Constitutional
Amendment set to become effective from 201112, the interim period is likely to cause a degree of
strainonfederalfinances.
Second,inamajorpolicyefforttobroadenthetaxbase,legislationwaslaidbeforethenationalaswell
as provincial assemblies to introduce an integrated, broadbased and modernized system of the GST
(leading to a Value Added Tax (VAT)) as originally intended in 1990. Key elements include concerns
aboutthelacunaeintroducedinthelegalframeworkovertime.Thisrequiresneededamendmentsto
the law at both national and provincial levels. In addition, modernization of the tax administration to
ensurearmslengthdealingwithtaxpayers,withverifiableandtimelyrefunds,andaddressingconcerns
withrentseekingandgovernanceintheFBR.ItisestimatedthatthemovetoVATcouldyieldupto3
percentofGDPinadditionalrevenueoveraperiodofthreetofiveyears,althoughtheestimatesforthe
comingyearbyleadingtaxexpertsareappropriatelymodestataround0.7percentofGDP.
Lookingahead,easingthebudgetconstraintassumesevengreaterurgency.Addressingtwodecadesof
underinvestment in critical sectors of the economy social sector, water reservoirs, physical
infrastructure, including the increasing need for maintenance of existing capital stock cannot be
postponedformuchlongerandwillrequirevastresources.Cateringtoarapidlyrisingpopulation,in
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conjunction withthe need toputinplace targetedsocialsafetynets,willfurtheraddtotheresource

requirements.
Meeting the expected expenditure requirements in the medium term will require redressing the
fundamentalweaknessesinthestructureofpublicfinances.Theseperennialweaklinkshaveremained
unaddressedinthepast,andincludealow,anddeclining,ratiooftaxcollectiontoGDP;weakincentives
forimprovementsinprovincialfinances,whichcouldpossiblyhavebeenweakenedfurtherbythenew
NFCaward;and,leakagesinpublicsectorexpenditure.
Economicreform
Cognizantofthelimitationsofthegrowthstrategyfollowedinthepast,whichhasinevitablyproduced
boombust cycles followed by a balance of payments crisis, the government has embarked on a
fundamentalchangeofthedevelopmentparadigm.
The new development strategy seeks to foster sustainable and more equitable growth by means of
structural improvements in the productive sectors of Pakistans economy, involving a broad range of
policyactionsacrosssectors.Thecurrentstatusofsomeoftheimportantreformsisasunder:
x RaisingtheTaxtoGDPratioisakeypillarofthegovernmentseconomicstrategy.Tothiseffect,
aproposedlawtoimplementabroadbasedValueAddedTax(VAT)withminimalexemptions
fromJuly1,2010hasbeenpresentedtoParliament.
x Inaddition,othermeasuressuchasimprovingtaxadministrationandreinstatingtaxauditshave
been taken. The cumulative effect of these policy measures is expected to be an increase of
PakistansTaxtoGDPratioto13percentby2013(from8.9percentin200809).
x Under Social Protection, the government has launched the Benazir Income Support Program
(BISP).AnallocationofRs70billionhasbeenmadeintheFederalBudget200910,withtheaim
of targeting 5.5 million poor and vulnerable Households in Pakistan with a cash transfer of Rs
1,000permonthtoeach.ThesizeofBISPmakesitthelargestsocialprotectionschemeinthe
countryshistory,anditworksinconjunctionwithothersafetynetssuchasBaitulMaal,Zakat
Fund,andprovincialprogrammessuchastheSastiRotischeme.
x ACabinetCommitteeonRestructuring(CCoR)hasbeenformedtorestructurekeyPublicSector
Enterprises (PIA, PEPCO, Railways, TCP, USC, Pakistan Steel Mills, NHA) with a view to stop
leakagescausedbyannuallossesamountingtoapproximately1.5%ofGDP.Theeventualaimis
to turnaround these PSEs into profitable, selfsustaining ventures under PublicPrivate
Partnershipmode.
x Underreformofthe powersector,electricitytariffshave beenraised between4055%inless
than two years, in an effort to reduce the level of subsidies absorbed in the budget, while
simultaneouslymovingtoafullcostrecoverytariffforthepowerutilities.UnderanewActof
parliament,adjustmentintariffforchangesinfuelpricesforpowergenerationhasbeenmade
automatic.
x The government successfully concluded the Seventh National Finance Commission (NFC)
Award only the fourth in Pakistans entire history, and the first for the last 19 years. This
AwardgreatlyaugmentsthequantumofresourcetransferfromtheCentretotheProvinces.
In conjunction with the higher resource transfer to the provinces, the Centre will also devolve some
majorfunctions/expenditureheadstothesubnationalgovernmentsinlinewiththeprovisionsofthe
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1973Constitution.
Externalaccount
Amidstilldifficultglobaleconomicconditions,largecoststoexportsimposedbythewaronterror,and
a severe energy crisis faced by Pakistans economy, the external sector witnessed an overall
improvementduring200910.Thisrecoverywasmainlycontributedbyasharpnarrowingofthecurrent
account deficit which more than offset the declining financial account surplus during the period. In
addition,macroeconomicstabilizationmeasurestakenbythegovernmentalsosignificantlycontributed
tooverallimprovementintheexternalsectorofPakistan.
The external current account deficit is expected to contract to around 2.8 percent of GDP in the
outgoingyear.Thislargeimprovementismainlyonthebackofasteepdeclineinimportsformuchof
theyear,improvingexportsasworlddemandisgraduallyrestored,andacontinuedincreaseinworker
remittances,whichareexpectedtoreach4.8percentofGDPforthefullfiscalyear.Workerremittances
haveincreasedfromUS$6.4billioninJulyApril200809toUS$7.3billionintenmonthsofthecurrent
fiscalyear(JulyApril).Alargepartoftherecentincreaseinremittances,whichappearstobesecularin
nature, has emanated from a policy initiative of the government in early 2009 called the Pakistan
Remittance Initiative (PRI). With the potential for formalising the remittances market estimated
betweenUS$16billion(WorldBank)andUS$21billion(PRI)annually,furthersuccessonthisfrontcan
havefarreachingpositiveeffectsonstabilityofPakistansbalanceofpaymentsintheyearsahead.
An added factor that is likely to extend support to the external account in the months ahead, and
possiblyformuchof201011,isthecollapseinglobalcommoditypricesinducedbytheEurozonewide
contagionfromtheongoingGreekdebtcrisis.SincethestartofthedifficultiesinGreeceearlierin2010,
international oil prices have fallen by over 11 percent. However, developments on this front could
potentiallyalsoimpactremittancesandexports,especiallyifthefalloutisnotcontained,andspreadsto
otherregions.Onbalance,itappearsfornowthat,inimmediatetermsatleast,thedeflationinimport
paymentswilloutweightheotherfactors,asevidentfromFigure2.Ifso,thiscouldinsulatetheexternal
accountfrompressureinthenearterm.
Publicdebt
PakistanstotalpublicdebtstoodatanestimatedRs.8,160billionasofendMarch2010.Atthislevel,
publicdebtisequivalentto56%ofGDP,and379%oftotalbudgetedrevenuefortheyear.Ofthetotal,
Rupeedenominateddebtamountedto31%ofGDP,whileforeigncurrencydenominateddebtwasthe
equivalentof25%ofGDP.
The bulk of the increase in public debt in the first nine months of 200910 has been recorded under
highercostdomesticdebt,withthegovernmentforcedtoborrowfromtheonshorecreditmarketsin
the absence of meaningful flows of external assistance, barring disbursements under the IMF loan.
Domesticdebtrose22%inannualizedtermsduringJulytoMarch.Anothersourceofincreasehasbeen
thedepreciationoftheRupeeagainsttheUSdollarbetweenJuly2009andMarch2010,amountingto
4.4%.TheweakerRupeeadded17%topublicdebtinthefirstninemonthsoftheyear.
Public debt has risen rapidly since 200506. While the relative debt burden, measured either as a
percentofGDPoroftotalrevenue,doesnotdepictasignificantdeteriorationinthedebtdynamic,the
netannualadditiontothedebtstockhasbeenfairlyrapidoverthepast4years.
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Theprimarysourcesofaccumulationinthepublicdebtstocksince200506havebeen:
x Currencytranslationlossesonforeignexchangedenominated debt.For200708and200809,
thecumulativedepreciationofover25%oftheRupeeagainsttheUSDollarisestimatedtohave
increasedthepublicdebtstockbyapproximatelyRs.235billion,oratotalof11%increaseon
thiscountaloneoverthepasttwoyears.
x Nonrecognition of large subsidy payments to the oil and power sector from prior years that
wereabsorbedinthebudgetin200708and200809;
x Asharpreductioninnondebtcreatinginflows,suchasFDI,inthewakeoftheglobalfinancial
crisis;
x The augmented access to IMF resources provided to Pakistan in the form of the Stand By
Arrangement(SBA)signedinNovember2008,amountingtoatotalofUS$11.3billion,ofwhich
approximatelyUS$7.3billionhasbeendisbursed;
x Overall, a lower inflow of external assistance, which forced the government to highercost
domesticborrowing;
x LumpyrepaymentofmaturingDefenceSavingsCertificates(DSCs)since2007,thathadnotbeen
budgetedfor;
x The inability of the government to take advantage of the historically low interest rate
environmentinthe2003to2007period,bylockingintolongertenuredebtsuchasthefiveand
tenyearPakistanInvestmentBonds(PIBs).
Intermsofservicingofthepublicdebt,interestpaymentswerebudgetedat4.4%ofGDPfor200910,
while total debt servicing including repayment of foreign loans and credits, was budgeted at 5.8% of
GDP.Budgetestimatesofinterestandprincipalrepaymentofforeignloansandcreditsduring200910
amountedtonearly40%oftotalrevenue,andapproximately30%ofexpenditure.
It is important to note, however, that the figure for public debt does not include publiclyguaranteed
debt, such as borrowing by stateowned enterprises for commodity operations against an explicit
government guarantee. In addition, in line with international convention and past practice, only that
portionoftheIMFloanthathasbeenusedfordeficitfinancingbythegovernmentisrecordedunder
publicdebt,whiletheremainderisshownundermonetaryauthorities(i.e.thecentralbank).
Inthecontextofarisingstockofpublicdebt,itisimportanttomakethenexusbetween,ontheone
hand,theweaktaxeffortthathascharacterisedPakistanspolicylandscapeforthelastseveraldecades,
and on the other, the reversal of the favourable debt dynamic that had been set in motion earlier. If
Pakistans taxtoGDP ratio had been a modest 13% since 2005, when economic conditions were
extremelyfavourableforabreakthroughinbroadeningthetaxbase,insteadofaround10%,thepublic
debtwouldhavebeenaround44%ofGDPcurrently,orafull12%ofGDPlower.Thelowerpublicdebt
stock would have translated into savings in interest payments since FY05, which would have
representedasubstantialexpansionoftheresourceenvelopethegovernmentiscurrentlyworkingwith.
Outlookfortheeconomy
Themediumtermprospectsfortheeconomyarepromising,providedthecurrentpathofreformisnot
abandoned.Pakistanhasachievedfairlyimpressiveearlysuccessinitseffortstostabilizetheeconomy
from a parlous state of affairs in the aftermath of the macroeconomic crisis of 2008. Protecting the
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recoveryisofparamountimportance,andthegovernmentneedstokeeparestrictivestanceonpublic
spending. Greater realism about the prospects and accurate forecasts about resources and available
fundsforthedevelopmentplansateachlevelofgovernmentisneeded.
Anumberofinterlinkedactionsareneededinthecomingyear:
x Checkinginflationthisinvolveslimitingborrowingbythegovernmentandthepublicsector.
x Bringing people to the centre stage, by appropriately designed employment and training
programstoprotectthoseinstrifeaffectedareas,andnewentrantstothelabourforce.
x Buttherearemajorriskstothegrowthandstabilizationprospectsifthereis
NonimplementationofthereformoftheGST,leadingtoaVAT,orothersignificanttax
broadeningmeasures;
ThismightaffectthephasednatureoffiscaldevolutionenvisagedundertheEighteenth
Constitutional amendment (to be effective from 201112), in the context of the front
loadedtransferstotheprovincesundertheSeventhNFCAward(effectivefromJuly1,
2010);
Largerthanbudgetedsecurityrelatedexpenditures;
Inadequatetargetingofsubsidies,
Failing to reform public sector enterprises, including the power sector, with no
resolutionoftheenergycirculardebtissue;
Continued overhang of commodity financing debt stock, if unchecked, threatens to

constrictaccesstobankcreditbytheprivatesector,whilesimultaneouslyincreasingthe
interestratesintheeconomy;
Adeteriorationoftheinternalsecuritysituation.
ThetippingoftheworldeconomyintoasevererecessioninthewakeoftheEurozonedebtcrisis,could
hurtPakistansexportsaswellasremittancesontheonehand,butcouldreduceinternationalpricesof
keycommoditiessuchasoil,ontheother.
Withrelativelylowlevelsofcapacityutilizationintheeconomy,aturnaroundininvestorconfidencecan
unleash large productivity gains even with low levels of fixed investment. Nonetheless, overall, a
combinationofrisingfiscalpressures,adevelopingdebtoverhang,andanuncertainpathofinflationin
thenearterm,significantlyreducespolicyspacetostimulatetheeconomy.
Forthelongerterm,effortstomeaningfullyaddressPakistansperennialstructuralchallenges,suchas
the abysmally low tax/GDP ratio and low overall productivity in the economy, are more than likely to
unlockPakistanssubstantialeconomicpotential.
x
GrowthandInvestment
A measure of macroeconomic stability achieved over the past two years has kindled a moderate
recovery in the economy, despite one of the most serious economic crises in the countrys recent
history.Theeconomygrewbyaprovisional4.1%intheoutgoingyear,afteramodestgrowthof1.2%in
200809.However,therecoveryintheeconomyislessthansecure.
First, the durability of the incipient economic turnaround is far from assured given the significant
challengestheeconomyfaces.Second,notallsectorsoftheeconomyorregionsofthecountryappear
to have participated so far in the modest upturn. Finally, from the perspective of strong job creation,
overallgrowthisstillnotrobustenough.Infact,latestofficialestimatessuggestamoderateincreasein
unemployment.
The macroeconomic context remains difficult in the near term. However, the successful resolution of
some of the critical challenges the economy has faced in 200910, such as the energy and water
shortage,andadisturbedinternalsecuritysituation,couldlaythebasisforhighergrowthin201011.In
addition,theeconomycouldbenefitfromlargeinitialproductivitygainsascapacityutilizationbeginsto
increase from a low base. For the longer term, however, without a resolution of Pakistans perennial
structural challenges, such as raising the level of domestic resource mobilization or promoting higher
productivity in the economy, growth and investment will continue to be constrained, and the growth
pathunstable.
1.1Globaldevelopments
The outgoing year witnessed the making of a global recovery. Leading indicators, and upgraded
projections from the IMF, have so far pointed to a sharp rebound in the world economy. The latest
projectionsfromtheIMFareforworldoutputtoincreaseby4.2percentin2010,againstanestimated
contraction of 0.6 percent in 2009. However, as noted in the World Economic Outlook for April, the
recoveryisunevenintermsofregionsandcountries,andisfragile.
AfterthesteepestfallsinceWorldWarII,globaltradeisexpectedtopickupmoderatelyinthecurrent
year. Early signs of recovery in both global output and trade have signalled improved prospects for
Pakistans exports. The eruption of the Greek debt crisis since April, and fears of wider contagion
especiallyintheEurozone,however,threatenstodisrupttherecoveryprocess.
1.2Pakistan
Despite severe challenges, the economy has shown resilience in the outgoing year. Growth in Gross
DomesticProduct(GDP)for200910,onaninflationadjustedbasis,hasbeenrecordedataprovisional
4.1%.ThiscompareswithGDPgrowthof1.2%(revised)inthepreviousyear.
For the outgoing year, the Agriculture sector grew an estimated 2%, against a target of 3.8%, and
1
previous years growth rate of 4%. While the Crops subsector declined 0.4% over the previous year,
Livestockpostedahealthyriseof4.1%.TheperformanceoftheAgriculturesectorwasboostedbythe
weakeningoftheElNinophenomenon,afterlatewinterrains.
Industrial output expanded by 4.9%, with Large Scale Manufacturing (LSM) posting a 4.4% rate of
growth. The Services sector grew 4.6%, as compared to 1.6% in 200809. Overall, the Commodity
Producing Sectors are estimated to have expanded at a 3.6% pace, which represents a significant
turnaroundfromtheanaemicgrowthratesoftheprevioustwofiscalyears.
Table1.1:GrowthPerformanceofComponentsofGrossNationalProduct
(PercentGrowthatConstantFactorCost)
200405
200506
200607
200708 200809 200910
COMMODITYPRODUCINGSECTOR
9.5
5.1
6.6
1.3
0.8
3.6
1.Agriculture
6.5
6.3
4.1
1.0
4.0
2.0
MajorCrops
17.7
3.9
7.7
6.4
7.3
0.2
MinorCrops
1.5
0.4
1.0
10.9
1.6
1.2
Livestock
2.3
15.8
2.8
4.2
3.5
4.1
Fishery
0.6
20.8
15.4
9.2
2.3
1.4
Forestry
32.4
1.1
5.1
13.0
3.0
2.2
2.Mining&Quarrying
10.0
4.6
3.1
4.4
0.2
1.7
3.Manufacturing
15.5
8.7
8.3
4.8
3.7
5.2
LargeScale
19.9
8.3
8.7
4.0
8.2
4.4
SmallScale*
7.5
8.7
8.1
7.5
7.5
7.5
4.Construction
18.6
10.2
24.3
5.5
11.2
15.3
5.ElectricityandGasDistribution
5.7
26.6
4.7
23.6
30.8
0.4
SERVICESSECTOR
8.5
6.5
7.0
6.0
1.6
4.6
6.Transport,Storage&Communication
3.4
4.0
4.7
3.8
2.7
4.5
7.Wholesale&RetailTrade
12.0
2.4
5.8
5.3
1.4
5.1
8.Finance&Insurance
30.8
42.9
14.9
11.1
7.0
3.6
9.OwnershipofDwellings
3.5
3.5
3.5
3.5
3.5
3.5
10.PublicAdmn.&Defence
0.6
10.1
7.1
1.2
3.6
7.5
11.Services
6.6
9.9
7.9
9.8
8.9
6.6
12.GDP(fc)
9.0
5.8
6.8
3.7
1.2
4.1
13.GNP(fc)
8.7
5.6
6.7
3.7
1.7
5.5
*Slaughteringisincludedundersmallscalesector
Source:FederalBureauofStatistics
1.2aContributionanalysis
For200910,sectoralcontributiontogrowthwasasfollows:Servicescontributed59%tooverallgrowth
intheeconomyfortheyear,followedbyIndustry(30%),andAgriculture(11%).Intermsofindividual
sectors,Manufacturingaccountedfor23%oftheoutgoingyearsoverallgrowth,followedbyWholesale
&RetailTrade(21%),andSocial&CommunityServices(19%).
Table1.2comparesthestructureofcontributiontooverallGDPgrowthfor200910,withtheprevious
five years. Growth in Agriculture contributed 11% to headline GDP growth for the year, with Industry
accounting for 30%. What stands out from the Table is the consistently high contribution to recent
growth,averaging62%forthepastsixyears,accountedforbytheServicessector.In200910,theshare
ofservicesinheadlinegrowthwasroughlyinlinewithitsaverage,at59%.
2
GrowthandInvestment
Table1.2:GDPgrowth:Sectoralcontribution
Sector
200405
200506
Agriculture
17%
24%
Industry
34%
19%
Manufacturing
30%
28%
Services
49%
57%
RealGDP(fc)
100%
100%
200607
13%
34%
24%
53%
200708
6%
10%
24%
85%
100%
100%
200809
71%
41%
58%
70%
200910
11%
30%
23%
59%
(Percent)
AvgFY05FY10
24%
14%
12%
62%
100%
100%
100%
Another important point to note is the consistently declining contribution of Manufacturing to the
headlinegrowthrate.From30%in200405,themanufacturingsectorsshareingrowthhasdeclinedto
23%fortheoutgoingyear.
Intermsofcontributionbyexpenditure(i.e.thecompositionofGDPgrowth),consumptionexpenditure
continued to account for a dominant share in growth, accounting for 96% of GDP growth in 200910.
The large weight of private consumption expenditure in GDP was reflected in its share of 81% in the
growth for the outgoing year, with general government consumption expenditure accounting for the
balance15%.
Fig1:CompositionofGDPGrowth
Consumption[C]
TotalInvestment[I]
NetExports[X M]
100%
80%
60%
40%
20%
0%
20%
40%
200203 200304 200405 200506 200607 200708 200809 200910
Reflecting the marginal decline in gross fixed investment for the year of 0.6%, the share of total
investment was a nominal 1% in GDP growth. Adjusting for the assumed contribution of Changes in
stockscategory,thecontributionofgrossfixedcapitalformation(GFCF)was1%.Finally,reflectingthe
sharp reduction in the external current account deficit, which is projected to decline to less than 2.8
percentofGDPfor200910from5.7percentthepreviousyear,shareofNetExportswas4%.
The stronger pace of economic growth in 200910 has occurred on the back of several favourable
developments,whichhaveincluded:
3
Substantialtransferstotheruralsectoroverthepasttwoyearsviathegovernmentscropsupport
pricepolicies,which,combinedwithhigherworkerremittances,havesustainedaggregatedemand
intheeconomy;
Fig2:GrossTransfer(Rsbn)
Fig3:AnnualRemittances
250
9,000
8,000
200
US$Million
7,000
150
100
50
6,000
5,000
4,000
3,000
2,000
0
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1,000
Source: EconomicAdviser'sWing
0
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 JulApr
FY10
Sorce:StateBankofPakistan
A largerthanexpected cotton output, which offset the moderately negative impact on the wheat
crop caused by a delay in seasonal rains. The cotton crop continues to exert a disproportionate
impactonoverallgrowthintheeconomy(Fig4).
Fig4:CottoncropandGDPgrowth,Yearonyearchange
GDPGrowth(in%)
10.0
8.0
6.0
4.0
2.0
0.0
40.0
30.0
20.0
10.0
0.0
10.0
20.0
30.0
40.0
50.0
GrowthinCottonProduction(inpercent)
AnongoingimprovementinexternaldemandforPakistansexports,mainlytextiles;
Therevisionofprioryearsgrowthrate,basedonfirmerdataforthefulltwelvemonthsof200809,as
opposedtoninemonthdatawhichisusedatthetimeofpreparingtheprovisionalestimate,resultedin
anadjustmentintherealGDPgrowthfromaprovisionalestimateof2%toarevised1.2%.Theimpact
onthegrowthratefor200910isestimatedatoveronepercentagepoint.
4
GrowthandInvestment
1.2bInvestment
At current market prices, Gross Fixed Capital Formation (GFCF) has been estimated to have declined
0.6%,afterrecordinga5.5%increasein200809.Adeclineinfixedinvestmentbytheprivatesectorhas
accountedfortheoverallchange,withanestimatedcontractionof3.5%fortheyear.Thebulkofthe
declinehasoccurredinElectricity&Gas,LargeScaleManufacturing,Transport&Communication,and
Finance&Insurance.GeneralGovernmentGFCFisestimatedtohaverisen9.8%.
Table1.3:GrossFixedCapitalFormationInPrivate,Public&GeneralGovernmentSectorsByEconomicActivity
(AtCurrentMarketPrices)
%Change
Sr#
Sectors
200809R
200910P
200708F
200809R
TotalGFCF(A+B+C)
5.5
0.6
A.
PrivateSector
5.3
3.5
Manufacturing
2.3
4.9
i.LargeScale
7.4
12.4
Electricity&Gas
4.3
18.8
Transport&Communication
3.9
14.2
B.
PublicSector
3.9
2.6
C.
GeneralGovernment
7.7
9.8
F:Final,R:Revised,P:Provisional
Clearly,thisdevelopmentisnotsalutaryforthelongrunprospectsoftheeconomy.However,giventhe
challengingcircumstancesinwhichtheeconomyhadtooperateduring200910,itisnotsurprisingthat
theprivateinvestmentresponsehasremainedsubdued.
AsubstantialdeclineinFDIinflowfortheperiodalsocontributedtothedeclineinfixedinvestmentin
200910.FDIaccountsforahighshareofgrossfixedinvestmentinPakistan,withashareofcloseto20
percent.
1.2cForeignDirectInvestment
InlinewithasharpdeclineinglobalflowsofForeignDirectInvestment(FDI),whichfell32percentin
2009 according to estimates of the International Institute of Finance (IIF), direct investment from this
source saw a steep reduction in Pakistan. For the period July to April 200910, FDI totalled US$ 1.8
billion as compared to US$ 3.2 billion in the same period of FY09. This represents a decline of 45
percent.
AlargepartofthedeclineinFDIfortheperiodwasrecordedunderTelecommunications(anetdecline
ofUS$607 million),and FinancialServices(afallofUS$548million).Combined,thedeclinein these
two sectors, which related to a few lumpy transactions last year, amounted to 81 percent of the
overallreductioninFDIin200910.
Investmentlevelsinsomesectorsremainedhealthy,includinginOilandGasexploration(FDIofUS$605
million),Communications(US$222million),Transport(US$104million),Construction(US$86million),
andPaperandPulp(US$81million).Despiteasteepdecline,inflowofFDIintoFinancialServiceswas
recordedatUS$133millionfortheperiod.
AworryingdevelopmentwasthelargenetdisinvestmentrecordedundertheITServicessectorforthe
5
year(amountingtoUS$95million).Overall,outofthemajorindustrycategories,12recordedhigherFDI
fortheperiod,while24industrieswitnessedanetreductioninFDIinflow.
1.2dInternationalCompetitiveness
Internationalcompetitivenessremainsakeyissuefortheeconomy,andimprovingitamajorchallenge.
The scale of the challenge is manifested in Pakistans global ranking of 101 in the Global
CompetitivenessIndex(GCI).
ThisissueofcompetitivenessisalsomanifestedinPakistansshareofworldexports,whichhasdeclined
overthepastdecade(from0.16%in2002,to0.13%in2008)whiletheshareofSouthAsiaasawhole
hasincreasedfrom0.27%to0.34%overthesameperiod.
Apart from the headline numbers and statistics, however, the discussion on competitiveness and
relative productivity in Pakistans economy needs to be nuanced. Firstly, a large part of the shift in
relativemarketsharesbetweenPakistanandotherSouthAsiancountriesrepresentstradediversionon
accountoftheeffectonPakistanofthedifficultsecuritysituationithasbeenfacingsince2002,rather
thananendogenousunderlyingdynamic.Secondly,developmentsonthecompetitivenessfrontarenot
uniformthroughouttheeconomy.SomesegmentsoftheTextileindustryaredoingwellininternational
markets,whilenewexportproductssuchasHalalmeatandJewelleryinparticulararegrowingrapidly.
On the other hand, many Pakistani goods and services are finding it difficult to compete even in the
domestic market. Construction services are an example, where Chinese companies have made large
inroads.
1.2eConstraintstoGrowthandInvestment
The incipient recovery in the economy has come about in the face of strong headwinds. Two severe
challengestheeconomyhadtonavigatethroughintheoutgoingyearwerethesharpriseinthenumber
of incidents of terrorism across the country, and the scale and nature of the attacks, which affected
growth and investment. The global war on terror has been imposing a heavy cost on the economy
since2001.Adistinctintensificationofthemilitantscampaignoccurredduring2009,withmajorurban
centresinPakistanbeingtargeted.During200910,atotalof1,906terrorattackswererecordedinthe
country,resultingin1,835deathsand5,194injuries,accordingtotheNationalCrisisManagementCell,
Ministry of Interior. It is estimated that the cost to the economy of terrorism amounted to around 6
percentofGDPin200910.AseparatesectionisdevotedtotheimpactonPakistanoftheglobalwar
onterror.
Thesecondchallengeemanatedfromtheenergycrisis,which,duetofactorsdetailedinalaterchapter
onthesubject,underwentanintensificationduringtheoutgoingyear.Asaresult,itisestimatedthata
loss of approximately 2.02.5 percent of GDP occurred in 200910 on account of the energy supply
constraint.
The overall cost to the economy emanating from Pakistans fight against terror is discussed in the
followingsection.
1.2fImpactonPakistanoftheWaronTerror
Since9/11,PakistanhasbeenattheepicentreoftheglobalWaronTerror.Between2002andend
April 2010, a total of 8,141 incidents of terrorism have occurred on Pakistans soil, resulting in 8,875
6
GrowthandInvestment
deathsofbothciviliansaswellaspersonneloflawenforcementagencies(LEAs),andinjuriestoafurther
20,675people.1
Fig5:No.ofincidents&humanlossessince2002
12,000
Injured
10,000
Killed
8,000
6,000
4,000
2,000
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source:NationalCrisis ManagementCell,MinistryofInterior
Beyond statistics of human casualties, the cumulative effects of the campaign of terror unleashed in
Pakistanandthecountrysfightagainstmilitancy,havebeenenormous.Lives,homesandincomeshave
beenuprooted,whileeducationalattainmentforvirtuallyawholegenerationofschoolgoingageinthe
affectedareasofNWFPandFATAhasbeenjeopardized,orseverelyundermined.
Intermsoftheeconomicimpact,thefalloutonPakistanhasalsobeenimmense.Asafrontlinestatein
the global War on Terror, it is officially estimated that Pakistan has been impacted to the extent of
overUS$43billionbetween2001and2010.
Table1.4:EstimatedLossToEconomy20052009
Rsbillion
DirectCosts
IndirectCosts
Total
InUS$bn
*:JulyApril
2004/05
2005/06
2006/07
67
192
259
4.4
78
223
301
5.0
83
278
361
6.0
Cumulative
200510
109
114
262
712
376
564
707
2,340
484
678
969
3,052
7.7
8.6
11.5
43.0
Source:FinanceDivision,GovernmentofPakistan
2007/08
2008/09
2009/10*
Since 200708, with the war on terror moving to a qualitatively different phase, with the Pakistan
army mobilizing and undertaking large scale military operations in the countrys North West (in
Malakand/Swat, and the Agencies of South Waziristan, Bajuar, Mohmand, Khyber, and lately, Kurram
andOrakzai),thenegativeeffectsontheeconomyhavegreatlyincreased.
Source: National Crisis Management Cell, Ministry of Interior, Government of Pakistan
7
Abrieflistoftheareaswheretheeconomyhasbeenimpactedincludesthefollowing:
DeclineinGDPgrowth
ReductioninInvestment
LostExports
Damaged/destroyedPhysicalInfrastructure
LossofEmploymentandIncomes
DiversionofBudgetaryResources,tomilitaryandsecurityrelatedspending
CutbacksinPublicSectorDevelopmentSpending
Capital,andHumanCapital,Flight
ReductioninCapital+WealthStock
ExchangeRateDepreciationandInflation
Asanillustrationofthemagnitudeofthedirectcosts,theadditionalexpenditureincurredonsecurity
related and civil relief operations since July 2007 has amounted to an estimated US$ 4 billion (2.4
percentofaverageGDP).2Inaddition,thecostofthehumanitariancrisisspawnedbythisconflicthas
beenthedisplacementofover3millionpeople,atitspeak,resultinginabudgetaryoutlayofUS$600
millionforthecurrentfiscalyearaloneforreliefandrehabilitationoftheIDPpopulation.
Largely as a result of the negative effects of the War on Terror, growth and investment have stalled.
Pakistanseconomygrew1.2percentin2008/09,withlargescalemanufacturing(LSM)contracting8.2
percentfortheyear.Thefiveyearannualaveragerateofgrowthoftheeconomywas6.6percentinthe
20042008period,whileLSMoutputhadexpandedatanaverageof12percent.Hence,thechangein
the five year averageto2009 trough works out to over 4.5 percent of GDP. Cumulatively, the loss of
potential GDP for 2008 and 2009 is estimated at 7 percent (or equivalent to approximately US$ 11.7
billion).
Table1.5:ChangeinGDPgrowth,Investment,LSM,FDIandExports
2001
2002
2003
2004
2005
2006
2007
2008
2009
5yrAvg:
Chg.
2004
[2009vs
2008 5YrAvg]
RealGDPGrowth(fc)
%
2.0
3.1
4.7
7.5
9.0
5.8
6.8
4.1
1.2
6.6
5.4
FixedInvestment
%GDP 15.8
15.5
15.3
15
17.5
20.5
20.9
20.4
18.1
18.9
0.8
Government
%GDP 5.7
4.2
4.0
4.0
4.3
4.8
5.6
5.4
4.9
4.8
0.1
Private
%GDP 10.2
11.3
11.3
10.9
13.1
15.7
15.4
15.0
13.2
14.0
0.8
ForeignDirectInvestment(FDI) US$bn 0.3
0.5
0.8
0.9
1.5
3.5
5.1
5.2
3.7
3.3
0.5
LargeScaleManufacturing
%
10.2
3.8
0.4
18.5
18.8
9.2
8.8
4.2
8.2
11.9
20.1
PrivateSectorCredit
%
0.5
12.1
12.8
34.3
34.4
23.5
17.3
16.5
0.7
25.2
24.5
Exports(FBS)
US$bn 9.20
9.14
11.16 12.31 14.39 16.45
17.0
19.1
14.8
15.8
1.1
Source:FederalBureauofStatistics;State BankofPakistan;Economic AdvisersWing,MinistryofFinance
The exportsector,withacontributionof12 percent to GDP,andasubstantialemploymentbase,has

faced the brunt of the fall out. The adverse impact on the export sector has manifested itself in the
followingways:
Inclusive of original allocation and supplementary grants in budget 2009/10.
8
GrowthandInvestment
Lossofexportorders/tradediversiontocompetitors;
PermanentremovalofPakistanfromglobalproductionandmarketingchainofinternational
brands/largebuyinghouses;
Relegationtolowvalueaddedcommodityproducts;
Asubstantialdeclineinprice/unitvalueforproducts;
Increaseincostofdoingbusiness;
Lossofdesignandtechnologicaltransfer;
Alossofentrepreneurialcapitalduetocapitalflightandbraindrain;
Highershipment,insuranceandsecuritycosts
Areversaloftrendtowardsgreatereconomiesofscale;
Lossofincome,newinvestmentandjobs;
Thedirectandindirectcostsassociatedwithbeingthefrontlinestateinthewaronterrorhavebeen,
in sum, severe, widespread and, in most cases, protracted, with the effects persisting for a fairly
extended period. Indeed, Pakistan is more than likely to face a significant degree of permanent
welfarelossonaccountofdiversionofdevelopmentspendingtothesecuritybudget,capitalflightand
braindrain,andduetotradediversionithassufferedsince9/11.
1.2gCostofEnergyCrisis
Totalenergyconsumptiondeclined5.2percentin2009versus2008,withconsumptionintheindustrial
sector falling by 11.7 percent. Electricity use in the industrial sector fell by 6.5 percent, while gas
consumption recorded a 2.6 percent decline (Fig6). Cumulatively, since 200607, electricity
consumptionbytheindustrialsectorhasdeclined8.2percent.
Whilethelastavailabledatapertainstofiscalyear200809,theimpactofmorerecentdevelopmentsin
the energy sector can be gauged from the widening deficit between electricity supply and demand
during200910,whichcrossed5,000MWatitspeak.
Fig6:Electricity&GasConsumptionInIndustrialSector
AnnualPercentchange
22.0
Electricity
17.0
Gas
12.0
7.0
2.0
3.0
8.0
200405
200506
200607
200708
200809
Source:HDIP
9
Theeffectoflowerenergyavailability isestimated atthe equivalentof2.02.5percentof GDPduring

200910.
1.3LongerTermConstraints:ImprovingPolicyandChangingtheIncentivesFramework
Whiletheeconomyhashadtonavigatethroughdifficultchallengesintheshortrun,asetofcomplex,
interrelated,andlongerterm,structuralconstraintstooverallgrowthcontinuetooperate.
Thisismanifestedinthefollowingways:
Astagnantordecliningshareofthemanufacturingsectorintheeconomy,asapercentageofGDP,
innewfixedinvestment,andintotalemployment(seeTable3.1).
Adeclineinsizeandscale,particularlyinManufacturing(Table1.6).
Table1.6:ManufacturingCompaniesbyPaidUpCapitalT
No.ofcompanieswithpaidup:
>Rs500million
100500million
50100million
<50million
Total
1990
1995
2000
2005
1
35
23
587
646
13
12
11
532
568
6
16
13
269
304
2009
11
25
22
794
852
2
5
5
668
680
Source:SECP
Afasterincreaseinimportsthanexports.TheExportImportratiohaddeclinedtoalowof0.48xin
2007asaresult.
Theexpansionoftheinformalsector,relativetotheformalpartoftheeconomy.Whilethistrendis
suggested in a number of unreleased studies, it is clearly evident from the following dynamic at
work:theshareofinformallabourintheeconomyhasincreased,from72.8%in200708,to73.3%
in200809,asapercentoftotal.Conversely,formalsectoremploymenthasdeclinedoverthesame
period.
Puttogether,theabovetrendsrepresentaworryingpictureforscaleandthelevelofformality,inthe
economy.Alargepartoftheproblemrelatestotheincentivesframeworkinplace.
The reliance on an overvalued exchange rate as an instrument of policy, especially between 2004
and2008,
Specificallyfortheviabilityofthedomesticmanufacturingsector,theFreeTradeAgreement(FTA)
withChinasince2007isunlikelytohavehelped,givenChinasglobaldominanceofmanufactured
products,especiallyinthelowvalueaddedsegment.
Pervasivemisdeclarationandunderinvoicingofimports,whichaccordingtosomeestimatescosts
theeconomyanywherebetweenRs100billiontoRs300billioninlostrevenuealone,inconjunction
withtherampantmisuseoftheAfghanTransitTrade(ATT)facility,hasunderminedtheviabilityand
competitivenessofthesector.
10
GrowthandInvestment
Recentdevelopmentsonthisfront,withthewindingupofthePACCssystembyFBR,doesnotbode
wellforreducingleakagesonaccountofweakadministrationofCustoms.
Weaknessesinthetaxationsystem,includingintermsofpolicydesign,havesetperverseincentivesfor
formalityandhence,scale.Thisisevidentfromthefollowingtable,whichdepictsstrikinglyhowuneven
the playing field is, especially in terms of taxation, for the largersized firms (mostly corporate
entities).
Table1.7:Incentivesfordecorporatization
TaxTreatment:
"Headline"Taxrate
WorkersProfitParticipationFund(WPPF)
WorkersWelfareFund(WWF)
Distributionoutofprofits(dividend)*
Corporate
Listed
Unlisted
AOP
35
5
2
5.8
47.8
35
5
2
5.8
47.8
25
No
2
No
27.0
NonCorporate
Small
Individual
company
20
20
5
No
2
No
7.3
No
34.3
20.0
Source:A.F.Ferguson
Othercostadvantagestobeingarelativelysmaller,informalplayerintheeconomyarenotcapturedin
the Table. These include savings accruing via the elimination of the regulatory burden (audits,
inspections, filings, registration costs etc), and the use of informal channels for gaining utility
connections,aswellasmakinglowerpaymentsforconsumption.
ThelossofscaleinducedbythetaxationsystemhasseriouslyerodedthecompetitivenessoftheLarge
Scale Manufacturing (LSM) sector, in particular. In addition, by encouraging informality, the taxation
regime in place over the last many years has plausibly reduced revenue collection compared to what
wouldhavebeenthecasecounterfactually.
1.4ProspectsforGrowth
Whiletheneartermoutlookforgrowthandinvestmenthasimprovedmoderately,itislikelytoremain
constrained due to a continuation of the difficult macroeconomic environment. Nonetheless, the
incipient growth recovery in the economy can gain some more traction if momentum in important
segments of the economy, large scale manufacturing, services, and selectively in the export sector, is
reinforced and not derailed or interrupted. With relatively low levels of capacity utilization in the
economycurrently,aturnaroundininvestorconfidencecanunleashlargeproductivitygainsevenwith
lowlevelsoffixedinvestment.
Despite an improvement in the growth performance for 200910, the economic turnaround is still
fragile,withnontrivialrisksstalkingtheoutlook.Someoftheseinclude:
Afurtherdeteriorationoftheinternalsecuritysituation;
Acontinuationofenergyshortages;
11
ThetippingoftheworldeconomyintoasevererecessioninthewakeoftheEurozonedebtcrisis,
whichcouldhurtPakistansexportsaswellasremittancesontheonehand,butcouldreduce
internationalpricesofkeycommoditiessuchasoil,ontheother;
The magnitude, timing and nature of external assistance inflows will be an important factor in
reinforcing the nascent recovery. While the risk of preemption of the private sectors credit
requirementsbygovernmentbankborrowingwasobviatedtoalargeextentin200910byweakcredit
demand from the private sector, as well as improved liquidity in the banking system, the threat of
crowdingoutofprivatesectordemandforbankcreditbygovernmentbankborrowingremains.Inany
case,governmentborrowingforbudgetarysupporthadanunintendedconsequence:theinterestrate
structurewaspressuredupwardasaresult.Ifandwhenexternalinflowsrelievethisconstraint,interest
ratescanbegintodeclineatthemargin.
Thelongertermprospectsfortheeconomyarepromising,givenpotentialdriverssuchasthesizeand
dynamismofthePakistanidiaspora,thepotentialforunleashinglargeproductivitygainsinagriculture,
improvementsintheeconomicenvironmentbyadeepeningofregionaltradeandinvestmentlinks,and
theharnessingoftheyouthbulge.
12
TABLE 1.1
GROSS NATIONAL PRODUCT AT CONSTANT FACTOR COST OF 1999-2000
Sector
I. COMMODITY PROD.
SECTOR (A+B)
A. Agriculture (1 to 5)
1 Major Crops
2 Minor Crops
3 Livestock
4 Fishery
5 Forestry
B. Industry (6 to 9)
6 Mining & Quarrying
7 Manufacturing
i Large Scale
ii Small Scale
iii Slaughtering
8 Construction
9 Electricity and
Gas Distribution
II. SERVICES SECTOR (10 to 15)
10 Transport, Storage
& Communication
11 Wholesale & Retail Trade
12 Finance & Insurance
13 Ownership of
Dwellings
14 Public Admn. &
Defence
15 Social and Community
Services
16 GDP (fc) (I + II)
17 Indirect Taxes
18 Subsidies
19 GDP (mp) (16+17-18)
20 Net Factor Income
from abroad
21 GNP (fc) (16+20)
22 GNP (mp) (19 + 20)
23 Population
(in million)
24 Per Capita
Income (fc-Rs)
25 Per Capita
Income (mp-Rs)
R : Revised
P : Provisional
(Rs million)
% Change
2009-10/
2008-09/
2007-08
2008-09
2003-04
2004-05
`
2005-06
2,041,661
964,853
327,057
124,121
473,771
13,611
26,293
1,076,808
111,473
727,439
492,632
176,841
57,966
82,818
2,234,671
1,027,403
385,058
125,993
484,876
13,691
17,785
1,207,268
122,621
840,243
590,759
190,121
59,363
98,190
2,348,925
1,092,098
370,005
126,457
561,500
16,540
17,596
1,256,827
128,288
912,953
639,585
206,656
66,712
108,195
2,504,569
1,137,037
398,617
125,243
577,400
19,080
16,697
1,367,532
132,254
988,301
695,489
223,365
69,447
134,536
2,535,968
1,148,851
373,188
138,887
601,408
20,834
14,534
1,387,117
138,047
1,036,101
723,626
240,139
72,336
127,076
2,555,948
1,195,031
400,486
136,601
622,531
21,319
14,094
1,360,917
137,707
997,966
664,405
258,173
75,388
112,884
2,646,845
1,218,873
399,729
135,008
648,106
21,626
14,404
1,427,972
135,411
1,049,569
693,355
277,562
78,652
130,203
0.8
4.0
7.3
-1.6
3.5
2.3
-3.0
-1.9
-0.2
-3.7
-8.2
7.5
4.2
-11.2
3.6
2.0
-0.2
-1.2
4.1
1.4
2.2
4.9
-1.7
5.2
4.4
7.5
4.3
15.3
155,078
2,173,947
146,214
2,358,559
107,391
2,511,551
112,441
2,687,140
85,893
2,847,044
112,360
2,892,089
112,789
3,023,923
30.8
1.6
0.4
4.6
461,276
477,171
496,073
519,486
539,297
554,115
578,966
2.7
4.5
766,693
141,768
858,695
185,501
838,426
265,056
887,294
304,514
934,231
338,386
921,015
314,813
968,150
303,521
-1.4
-7.0
5.1
-3.6
126,764
131,214
135,820
140,587
145,521
150,629
155,916
3.5
3.5
267,321
268,826
295,959
316,915
320,565
332,108
357,134
3.6
7.5
410,125
4,215,608
372,029
53,488
4,534,149
437,152
4,593,230
358,455
69,889
4,881,796
480,217
4,860,476
395,440
72,545
5,183,371
518,344
5,191,709
361,841
75,602
5,477,948
569,044
5,383,012
372,651
190,288
5,565,375
619,409
5,448,037
360,584
41,085
5,767,536
660,236
5,670,768
374,531
26,434
6,018,865
8.9
1.2
-3.2
-78.4
3.6
6.6
4.1
3.9
-35.7
4.4
90,721
4,306,329
4,624,870
88,766
4,681,996
4,970,562
84,343
4,944,819
5,267,714
82,434
5,274,143
5,560,382
85,586
5,468,598
5,650,961
112,838
5,560,875
5,880,374
193,711
5,864,479
6,212,576
31.8
1.7
4.1
71.7
5.5
5.6
149.7
152.5
155.4
158.2
161.0
163.8
166.5
1.7
1.7
28,776
30,696
31,826
33,345
33,973
33,957
35,218
0.0
3.7
30,905
F : Final
32,587
33,904
35,154
35,106
35,908
2006-07
2007-08
F
2008-09
R
2009-10
P
37,308
2.3
3.9
Source: Federal Bureau of Statistics
TABLE 1.2
SECTORAL SHARE IN GDP
Sector
I. COMMODITY PROD.
SECTOR
A. Agriculture
1 Major Crops
2 Minor Crops
3 Livestock
4 Fishery
5 Forestry
B. Industry
7 Manufacturing
i Large Scale
ii Small Scale
iii Slaughtering
8 Construction
9 Electricity and
Gas Distribution
II. SERVICES SECTOR
& Communication
13 Ownership of
Dwellings
14 Public Admn. &
Defence
15 Social Services
16 GDP (fc) (I + II)
R : Revised
P : Provisional
1999-2000
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
F
2008-09
R
(%)
2009-10
P
49.3
48.7
47.9
47.6
48.4
48.7
48.3
48.2
47.1
46.9
46.7
25.9
9.6
3.5
11.7
0.4
0.7
23.3
2.3
14.7
9.5
5.2
2.5
24.9
8.5
3.3
11.9
0.4
0.7
23.8
2.4
15.7
10.3
5.4
2.9
2.4
24.1
8.0
3.1
12.0
0.3
0.7
23.7
2.4
15.9
10.4
5.6
3.0
2.4
24.0
8.2
3.0
11.7
0.3
0.7
23.6
2.5
16.3
10.6
5.6
2.4
22.9
7.8
2.9
11.2
0.3
0.6
25.5
2.6
17.3
11.7
4.2
2.0
22.4
8.4
2.7
10.6
0.3
0.4
26.3
2.7
18.3
12.9
4.1
2.4
2.1
22.5
7.6
2.6
11.6
0.3
0.4
25.9
2.6
18.8
13.2
4.3
12.4
2.2
21.9
7.7
2.4
11.1
0.4
0.3
26.3
2.5
19.0
13.4
4.3
4.1
2.59
21.3
6.9
2.6
11.2
0.4
0.3
25.8
2.6
19.2
13.4
4.5
4.2
2.36
21.9
7.4
2.5
11.4
0.4
0.3
25.0
2.5
18.3
12.2
4.7
4.2
2.07
21.5
7.0
2.4
11.4
0.4
0.3
25.2
2.4
18.5
12.2
4.9
4.3
2.30
3.9
50.7
3.3
51.3
3.0
52.1
2.5
52.4
3.7
51.6
3.2
51.3
2.2
51.7
2.2
51.8
1.6
52.9
2.1
53.1
2.0
53.3
11.3
11.6
11.4
11.4
10.9
10.4
10.2
10.0
10.0
10.2
10.2
17.5
3.7
17.9
3.1
17.8
3.5
18.0
3.3
18.2
3.4
18.7
4.0
17.2
5.5
17.1
5.9
17.4
6.3
16.9
5.8
17.1
5.4
3.1
3.2
3.2
3.1
3.0
2.9
2.8
2.7
2.7
2.8
2.7
6.2
9.0
100.0
F : Final
6.2
9.3
100.0
6.4
9.8
100.0
6.6
9.9
100.0
6.3
9.7
100.0
5.9
9.5
100.0
6.1
9.9
100.0
6.1
6.0
6.1
6.3
10.0
10.6
11.4
11.6
100.0
100.0
100.0
100.0
TABLE 1.3
REAL GDP / GNP GROWTH RATES (AT CONSTANT FACTOR COST OF 1999-2000)
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
F
2008-09
R
(%)
2009-10
P
I. COMMODITY PROD. SECTOR
0.8
1.4
4.2
9.3
9.5
5.1
6.6
1.3
0.8
3.6
A. Agriculture
Sector
-2.2
0.1
4.1
2.4
6.5
6.3
4.1
1.0
4.0
2.0
1 Major Crops
-9.9
-2.5
6.8
1.7
17.7
-3.9
7.7
-6.4
7.3
-0.2
2 Minor Crops
-3.2
-3.7
1.9
3.9
1.5
0.4
-1.0
10.9
-1.6
-1.2
3 Livestock
3.8
3.7
2.6
2.9
2.3
15.8
2.8
4.2
3.5
4.1
4 Fishery
-3.0
-12.3
3.4
2.0
0.6
20.8
15.4
9.2
2.3
1.4
5 Forestry
9.1
-4.4
11.1
-3.2
-32.4
-1.1
-5.1
-13.0
-3.0
2.2
B. Industry
4.1
2.7
4.2
16.3
12.1
4.1
8.8
1.4
-1.9
4.9
5.5
5.7
6.6
15.6
10.0
4.6
3.1
4.4
-0.2
-1.7
7 Manufacturing
9.3
4.5
6.9
14.0
15.5
8.7
8.3
4.8
-3.7
5.2
i Large Scale
11.0
3.5
7.2
18.1
19.9
8.3
8.7
4.0
-8.2
4.4
ii Small Scale
6.2
6.3
6.3
-20.0
7.5
8.7
8.1
7.5
7.5
7.5
iii Slaughtering
..
..
..
..
2.4
12.4
4.1
4.2
4.2
4.3
8 Construction
0.5
1.6
4.0
-10.7
18.6
10.2
24.3
-5.5
-11.2
15.3
-13.7
-7.0
-11.7
56.8
-5.7
-26.6
4.7
-23.6
30.8
0.4
3.1
4.8
5.2
5.8
8.5
6.5
7.0
6.0
1.6
4.6
5.3
1.2
4.3
3.5
3.4
4.0
4.7
3.8
2.8
4.5
4.5
2.8
6.0
8.3
12.0
-2.4
5.8
5.3
-1.4
5.1
-15.1
17.2
-1.3
9.0
30.8
42.9
14.9
11.1
-7.0
-3.6
3.8
3.5
3.3
3.5
3.5
3.5
3.5
3.5
3.5
3.5
2.2
6.9
7.7
3.2
0.6
10.1
7.1
1.2
3.6
7.5
5.6
7.9
6.2
5.4
6.6
9.9
7.9
9.8
8.9
6.6
2.0
3.1
4.7
7.5
9.0
5.8
6.8
3.7
1.2
4.1
9 Electricity and
Gas Distribution
II. SERVICES SECTOR
& Communication
13 Ownership of
Dwellings
14 Public Admn. &
Defence
15 Social Services
16 GDP (fc)
R : Revised
.. : Not available
P : Provisional
F : Final
TABLE 1.4
EXPENDITURE ON GROSS NATIONAL PRODUCT AT CONSTANT PRICES OF 1999-2000
Flows
(Rs million)
% Change
2008-09/ 2009-10/
2007-08
2008-09
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
F
2008-09
R
2009-10
P
2,952,588
3,251,947
3,670,749
3,708,073
3,882,891
3,779,311
4,206,101
4,371,945
11.29
3.94
384,825
390,319
396,818
588,576
532,147
739,071
506,036
573,755
-31.53
13.38
658,070
617,731
701,392
840,977
955,140
1,024,696
908,856
890,300
-11.30
-2.04
71,051
73,703
79,085
82,934
87,647
89,046
92,281
96,305
3.63
4.36
814,425
801,982
878,896
965,863
988,164
935,303
904,375
1,031,533
-3.31
14.06
657,983
601,559
845,144
1,003,052
968,041
1,002,052
850,111
944,970
-15.16
11.16
4,222,976
4,534,123
4,881,796
5,183,371
5,477,948
5,565,375
5,767,538
6,018,865
3.63
4.36
127,050
90,721
88,750
84,343
82,434
85,586
112,838
193,711
31.84
71.67
4,350,026
4,624,844
4,970,546
5,267,714
5,560,382
5,650,961
5,880,376
6,212,576
4.06
5.65
355,323
372,029
358,455
395,440
361,841
372,651
360,584
374,531
-3.24
3.87
1 Private Consumption
Expenditure
2 General Govt. Current
Consumption Expenditure
3 Gross Domestic Fixed
Capital Formation
4 Change in Stocks
5 Export of Goods and
Non-Factor Services
6 Less Imports of Goods
and Non-Factor Services
7 Expenditure on GDP at
Market Prices
8 Plus Net Factor Income
from Rest of the World
9 Expenditure on GNP
at Market Prices
10 Less Indirect Taxes
11 Plus Subsidies
12 GNP at Factor Cost
R : Revised
F : Final
54,451
53,488
69,889
72,545
75,602
190,288
41,085
26,434
-78.41
-35.66
4,049,154
4,306,303
4,681,980
4,944,819
5,274,143
5,468,598
5,560,877
5,864,479
1.69
5.46
P : Provisional
TABLE 1.5
GROSS NATIONAL PRODUCT AT CURRENT FACTOR COST
Sectors
1 Agriculture
Major Crops
Minor Crops
Livestock
Fishery
Forestry
3 Manufacturing
Large Scale
Small Scale
Slaughtering
4 Construction
5 Electricity and
Gas Distribution
& Communication
9 Ownership of
Dwellings
10 Public Admn. &
Defence
11 Social Services
12 GDP (fc)
13 Indirect Taxes
14 Subsidies
15 GDP (mp)
16 Net Factor Income
from abroad
17 GNP (fc)
18 GNP (mp)
19 Population
(in million)
20 Per Capita
Income (fc-Rs)
21 Per Capita
Income (mp-Rs)
22 Per Capita
Income (mp-US $)
23 GDP Deflator
Index
Growth
R : Revised
F : Final
2003-04
2004-05
2005-06
2006-07
1,164,751
411,836
126,372
578,218
16,728
31,597
208,290
902,486
621,899
280,587
115,497
1,314,234
497,556
154,218
621,170
17,490
23,800
182,051
1,136,634
814,657
222,176
99,801
153,333
1,457,222
464,276
168,461
766,448
30,492
27,545
219,682
1,370,793
1,003,062
245,962
121,769
179,885
190,713
187,267
675,623
(Rs million)
% Change
2008-09/
2009-10/
2007-08
2008-09
29.1
15.9
45.1
13.1
11.5
19.3
24.1
17.8
2.6
4.6
16.6
12.4
15.0
-0.2
6.0
14.6
2.3
14.0
18.0
12.5
15.4
24.5
13.3
4.6
1,685,240
546,418
184,121
881,806
42,668
30,227
252,541
1,567,313
1,149,573
279,943
137,797
225,239
2007-08
F
2,017,181
671,374
211,553
1,051,442
52,391
30,421
301,469
1,950,522
1,467,225
334,610
148,687
260,340
2008-09
R
2,603,826
974,190
235,803
1,304,639
53,731
35,463
346,810
2,067,494
1,500,891
395,005
171,598
294,990
2009-10
P
3,016,565
1,101,671
281,332
1,537,502
56,182
39,878
346,256
2,369,029
1,710,854
444,571
213,604
308,425
153,338
169,519
145,874
222,249
246,086
52.4
10.7
759,711
908,409
1,012,206
1,155,873
1,630,278
1,894,188
41.0
16.2
896,357
165,230
1,093,114
236,254
1,262,001
364,320
1,441,786
447,270
1,829,944
556,679
2,100,661
625,471
2,391,058
667,550
14.8
12.4
13.8
6.7
146,264
165,441
184,812
206,166
239,010
298,789
345,759
25.0
15.7
312,105
473,211
5,250,527
455,549
65,496
343,348
551,181
6,122,568
468,573
91,359
404,628
653,437
7,158,527
569,077
104,399
467,685
760,134
8,235,099
556,874
118,966
530,074
934,618
9,921,584
667,604
346,389
662,723
1,228,665
12,081,956
763,501
106,121
794,439
1,464,134
13,843,489
896,702
71,763
25.0
31.5
21.8
14.4
-69.4
19.9
19.2
14.6
17.4
-32.4
5,640,580
6,499,782
7,623,205
8,673,007
10,242,799
12,739,336
14,668,428
24.4
15.1
124,478
5,375,005
5,765,058
134,461
6,257,029
6,634,243
149,901
7,308,428
7,773,106
157,631
8,392,730
8,830,638
208,916
10,130,500
10,451,715
344,491
12,426,447
13,083,827
570,615
14,414,104
15,239,043
64.9
22.7
25.2
65.6
16.0
16.5
149.65
152.53
155.37
158.17
160.97
163.76
166.52
1.7
1.7
35,917
41,022
47,039
53,061
62,934
75,882
86,561
20.6
14.1
38,524
43,495
50,030
55,830
64,930
79,896
91,515
23.1
14.5
669
733
836
921
1,038
1,018
1,095
-2.0
7.6
133.30
7.02
147.28
10.49
158.62
7.70
184.31
16.20
221.77
20.32
124.55
7.74
P : Provisional
244.12
10.08
TABLE 1.6
EXPENDITURE ON GROSS NATIONAL PRODUCT AT CURRENT PRICES
Flows
(Rs million)
% Change
2008-09/ 2009-10/
2007-08
2008-09
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
F
2008-09
R
2009-10
P
3,600,963
4,184,717
5,001,499
5,720,225
6,543,843
7,835,310
10,254,625
11,815,289
30.88
15.22
428,689
462,462
509,864
824,300
796,204
1,278,431
1,029,156
1,312,520
-19.50
27.53
736,433
844,847
1,134,942
1,565,838
1,814,620
2,094,743
2,210,920
2,196,969
5.55
-0.63
80,629
90,249
105,298
121,971
138,768
163,885
203,829
234,695
24.37
15.14
815,158
883,704
1,019,783
1,161,257
1,230,660
1,316,439
1,636,196
1,892,553
24.29
15.67
786,224
825,399
1,271,604
1,770,386
1,851,088
2,446,008
2,595,390
2,783,598
6.11
7.25
4,875,648
5,640,580
6,499,782
7,623,205
8,673,007
10,242,800
12,739,336
14,668,428
24.37
15.14
151,812
124,478
134,461
149,901
157,631
208,916
344,491
570,615
64.89
65.64
5,027,460
5,765,058
6,634,243
7,773,106
8,830,638
10,451,716
13,083,827
15,239,043
25.18
16.47
403,221
455,549
468,573
569,077
556,874
667,604
763,501
896,702
14.36
17.45
1 Private Consumption
Expenditure
2 General Government Current
Consumption Expenditure
3 Gross Domestic Fixed
Capital Formation
4 Change in Stocks
5 Export of Goods and NonFactor Services
6 Less Imports of Goods and
Non-Factor Services
7 Expenditure on GDP at
Market Prices
8 Plus Net Factor Income from
the rest of the world
9 Expenditure on GNP
at Market Prices
10 Less Indirect Taxes
11 Plus Subsidies
12 GNP at Factor Cost
R : Revised
61,791
65,496
91,359
104,399
118,966
346,389
106,121
71,763
-69.36
-32.38
4,686,030
5,375,005
6,257,029
7,308,428
8,392,730
10,130,501
12,426,447
14,414,104
22.66
16.00
P : Provisional
F : Final
TABLE 1.7
GROSS FIXED CAPITAL FORMATION (GFCF) IN PRIVATE, PUBLIC, AND GENERAL GOVERNMENT SECTORS BY ECONOMIC
ACTIVITY AT CURRENT MARKET PRICES
Sector
2002-03
GFCF (A+B+C)
736,433
A. Private Sector
545,104
B. Public Sector
104,051
C. General Govt.
87,278
Private & Public (A+B)
649,155
SECTOR-WISE:
1. Agriculture
75,681
2. Mining and
Quarrying
77,430
3. Manufacturing (A+B)
164,920
A. Large Scale
136,066
B. Small Scale*
28,854
4. Construction
7,130
5. Electricity
& Gas
57,562
6. Transport and
Communication
82,864
7. Wholesale and
Retail Trade
12,533
8. Finance &
Insurance
23,366
9. Ownership of Dwellings
91,379
10. Services
56,290
P : Provisional
R : Revised
* : Slaughtering is included in small scale sector
2003-04
2004-05
2005-06
2006-07
2008-09
R
2,210,921
1,620,982
212,879
377,060
1,833,861
2009-10
P
2,196,969
1,564,427
218,432
414,110
1,782,859
(Rs million)
% Change
2008-09/ 2009-10/
2007-08
2008-09
5.5
-0.6
5.3
-3.5
3.9
2.6
7.7
9.8
5.1
-2.8
844,836
616,514
103,536
124,786
720,050
1,134,942
852,424
129,482
153,036
981,906
1,565,838
1,197,740
162,022
206,076
1,359,762
1,814,620
1,335,849
172,697
306,074
1,508,546
2007-08
F
2,094,743
1,539,647
204,873
350,223
1,744,520
81,159
135,308
145,575
151,574
147,511
171,521
191,359
16.3
11.6
18,651
203,929
164,572
39,357
10,113
33,378
247,166
195,655
51,511
17,824
49,569
326,797
261,023
65,774
26,106
75,559
350,248
276,131
74,117
38,299
94,753
364,088
271,840
92,248
33,515
136,398
375,350
254,835
120,515
42,862
144,501
356,736
223,333
133,403
44,066
44.0
3.1
-6.3
30.6
27.9
5.9
-5.0
-12.4
10.7
2.8
25,261
40,050
69,795
73,497
88,443
89,211
81,098
0.9
-9.1
148,646
224,974
392,651
395,240
457,156
423,549
370,403
-7.4
-12.5
17,192
21,381
29,157
37,227
43,140
51,997
54,417
20.5
4.7
27,945
110,398
76,754
31,580
129,247
101,065
F : Final
41,009
149,167
129,936
81,683
158,719
146,500
152,038
181,729
182,147
91,325
219,867
231,781
60,264
231,657
248,358
-39.9
21.0
27.2
-34.0
5.4
7.2
(Contd.)
TABLE 1.7
GROSS FIXED CAPITAL FORMATION (GFCF) IN PRIVATE SECTOR BY ECONOMIC ACTIVITY
AT CURRENT MARKET PRICES
Sector
616,514
852,424
1,197,740
1,335,849
2007-08
F
1,539,647
1. Agriculture
74,293
81,050
2. Mining and
Quarrying
48,252
12,701
3. Manufacturing
163,520
200,521
Large Scale
134,666
161,162
Small Scale*
28,854
39,359
4. Construction
4,178
6,608
5. Electricity & Gas
26,417
3,039
6. Transport &
Communication
51,381
86,951
7. Wholesale and
Retail Trade
12,533
17,192
8. Ownership of
Dwellings
91,379
110,398
9. Finance & Insurance
20,897
26,599
10. Services
52,254
71,455
R : Revised
P : Provisional
135,086
143,538
151,340
147,381
171,383
191,129
16.3
11.5
18,384
244,959
193,448
51,511
13,418
11,612
31,323
320,501
254,727
65,774
19,248
32,372
49,007
346,574
272,457
74,117
24,262
29,633
62,764
362,824
270,576
92,248
19,091
32,843
89,680
371,098
250,583
120,515
28,205
31,438
95,115
352,850
219,447
133,403
27,601
25,538
42.9
2.3
-7.4
30.6
47.7
-4.3
6.1
-4.9
-12.4
10.7
-2.1
-18.8
153,558
312,549
324,335
372,544
357,850
307,040
-3.9
-14.2
21,381
29,157
37,227
43,140
51,997
54,417
20.5
4.7
129,247
30,520
94,259
F : Final
149,167
38,692
121,193
158,719
77,974
136,778
181,729
147,268
170,063
219,867
83,273
216,191
231,657
47,640
231,440
21.0
-43.5
27.1
5.4
-42.8
7.1
(Contd.)
PRIVATE SECTOR
2002-03
545,104
2003-04
2004-05
2005-06
2006-07
2008-09
R
1,620,982
2009-10
P
1,564,427
(Rs million)
% Change
2008-09/ 2009-10/
2007-08
2008-09
5.3
-3.5
TABLE 1.7
GROSS FIXED CAPITAL FORMATION (GFCF) IN PUBLIC AND GENERAL GOVERNMENT SECTORS BY ECONOMIC ACTIVITY AT
CURRENT MARKET PRICES
Sector
Public Sector and
General Govt. (A+B)
A. Public Sector
1. Agriculture
2. Mining and
Quarrying
3. Manufacturing
4. Construction
6. Transport and
Communication
Railways
Post Office & PTCL
Others
7. Wholesale and
Retail Trade
8. Finance &
Insurance
9. Services
B. General Govt.
Federal
Provincial
District Govt.
R : Revised
- : Nil
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
F
2008-09
R
(Rs million)
% Change
2008-09/
2009-10/
2007-08
2008-09
2009-10
P
191,332
104,054
1,388
228,322
103,536
109
282,518
129,482
222
368,098
162,022
2,037
481,771
175,697
234
555,096
204,873
130
589,939
212,879
138
632,542
218,432
230
6.3
3.9
6.2
7.2
2.6
66.7
29,178
1,400
2,952
31,145
5,950
3,410
3,505
22,222
14,994
2,140
4,406
28,438
18,246
6,296
6,858
37,423
29,552
3,674
14,037
43,864
31,989
1,264
14,424
55,600
46,718
4,252
14,657
57,773
49,386
3,886
16,465
55,560
46.0
236.4
1.6
3.9
5.7
-8.6
12.3
-3.8
31,486
3,133
6,699
21,654
61,695
3,336
5,834
52,525
71,416
3,439
10,763
57,214
80,102
4,754
15,232
60,116
70,905
3,680
11,981
55,244
84,612
4,296
14,445
65,871
65,699
1,609
23,814
40,276
63,363
284
23,830
39,249
-22.4
-62.5
64.9
-38.9
-3.6
-82.3
0.1
-2.5
1,346
5,299
124,786
41,304
50,059
33,423
1,060
6,806
153,036
38,938
71,567
42,531
F : Final
2,317
8,743
206,076
53,522
113,512
39,042
3,709
9,722
306,074
78,862
156,261
70,951
4,770
12,084
350,223
83,175
179,756
87,292
8,052
15,590
377,060
59,663
211,330
106,067
2,469
4,036
87,278
31,581
26,689
29,008
P : Provisional
.. : Not available
12,624
68.8
56.8
16,918
29.0
8.5
414,110
7.7
9.8
75,722
-28.3
26.9
245,537
17.6
16.2
92,851
21.5
-12.5
TABLE 1.8
GROSS FIXED CAPITAL FORMATION (GFCF) IN PRIVATE, PUBLIC AND GENERAL GOVERNMENT SECTORS BY ECONOMIC
ACTIVITY AT CONSTANT MARKET PRICES OF 1999-2000
Sector
GFCF (A+B+C)
A. Private Sector
2002-03
2003-04
658,070
485,849
617,731
447,212
2004-05
701,392
521,326
2005-06
840,976
635,894
2006-07
955,141
691,550
2007-08
F
1,024,696
756,035
2008-09
R
908,856
672,015
2009-10
P
890,301
637,990
(Rs million)
% Change
2008-09/ 2009-10/
2007-08
2008-09
-11.3
-2.0
-11.1
-5.1
B. Public Sector
91,475
72,763
75,153
81,809
85,153
88,743
76,150
76,752
-14.2
0.8
C. General Govt.
80,746
97,756
104,913
123,273
178,438
179,918
160,691
175,559
-10.7
9.3
519,975
596,479
717,703
776,703
844,778
748,165
714,742
-11.4
-4.5
170,519
180,066
205,082
263,591
268,661
236,841
252,311
-11.8
6.5
55,779
76,389
70,285
70,902
107,328
112,937
120,600
5.2
6.8
12,232
144,010
115,700
28,310
7,919
17,482
148,129
117,147
30,982
13,155
22,021
171,302
140,320
30,982
19,378
32,557
179,530
142,424
37,106
26,805
36,104
164,909
124,299
40,610
21,137
44,252
138,239
93,796
44,443
19,784
45,680
128,000
79,363
48,637
19,139
22.6
-16.2
-24.5
9.4
-6.4
3.2
-7.4
-15.4
9.4
-3.3
16,934
21,659
32,056
32,750
34,764
29,710
26,439
-14.5
-11.0
105,851
133,953
202,033
197,176
201,000
154,999
133,193
-22.9
-14.1
13,760
22,025
15,165
21,835
18,123
25,196
22,578
48,454
23,049
80,919
22,957
41,272
23,968
26,554
-0.4
-49.0
4.4
-35.7
87,010
54,455
89,213
59,499
91,648
65,661
94,151
71,800
96,721
78,847
99,363
84,651
102,074
89,094
2.7
7.4
2.7
5.2
(Contd.)
Private & Public (A+B)

577,324
Public & General
Govt. (B+C)
172,221
SECTOR-WISE:
1. Agriculture
66,762
2. Mining and
Quarrying
66,738
3. Manufacturing
149,275
Large Scale
120,969
Small Scale*
28,306
4. Construction
6,606
5. Electricity
& Gas
50,119
6. Transport and
Communication
74,151
7. Wholesale and
Retail Trade
11,692
8. Finance & Insurance
21,265
9. Ownerships of
Dwellings
83,163
10. Services
49,996
R : Revised
P : Provisional
- : Not available
F : Final
TABLE 1.8
GROSS FIXED CAPITAL FORMATION (GFCF) IN PRIVATE SECTOR
AT CONSTANT MARKET PRICES OF 1999-2000
Sector
2002-03
2003-04
2004-05
2005-06
PRIVATE SECTOR
485,849
447,213
521,326
635,893
1. Agriculture
65,537
55,704
76,264
2. Mining and
Quarrying
41,589
8,330
9,629
3. Manufacturing
145,588
141,613
146,847
Large Scale
119,724
113,303
115,865
Small Scale*
25,864
28,310
30,982
4. Construction
3,871
5,175
9,903
5. Electricity
& Gas
23,001
2,044
6,280
6. Transport &
Communication
45,979
61,918
91,431
7. Wholesale and
Retail Trade
11,692
13,760
15,165
8. Ownership of
Dwellings
83,163
87,010
89,213
9. Finance &
Insurance
19,018
20,964
21,102
10. Services
46,411
50,695
55,492
R : Revised
P : Provisional
F : Final
2006-07
(Rs million)
% Change
2007-08/ 2008-09/
2006-07
2007-08
-11.1
-5.1
691,549
2007-08
F
756,035
2008-09
R
672,015
2009-10
P
637,991
69,302
70,792
107,274
112,890
120,523
5.2
6.8
13,915
167,917
136,935
30,982
14,287
21,116
177,636
140,529
37,107
16,981
23,915
164,331
123,721
40,610
12,040
29,095
136,674
92,231
44,443
13,018
30,068
126,619
77,982
48,637
11,988
21.7
-16.8
-25.5
9.4
8.1
3.3
-7.4
-15.4
9.4
-7.9
14,868
13,204
12,910
10,470
8,326
-18.9
-20.5
160,818
161,803
163,798
130,957
110,409
-20.0
-15.7
18,123
22,578
23,049
22,957
23,968
-0.4
4.4
91,648
94,151
96,721
99,363
102,074
2.7
2.7
23,772
61,243
46,253
67,035
78,380
73,617
37,633
78,958
20,991
83,025
-52.0
7.3
-44.2
5.2
(Contd.)
TABLE 1.8
GROSS FIXED CAPITAL FORMATION (GFCF) IN PUBLIC AND GENERAL GOVERNMENT SECTORS
AT CONSTANT MARKET PRICES OF 1999-2000
Sector
2002-03
2003-04
2004-05
2005-06
Public and General

Government (A+B)
172,221
170,518
180,066
205,084
263,590
268,662
236,841
252,311
-11.8
6.5
91,476
1,224
72,762
75
75,153
125
81,810
983
85,152
109
88,744
53
76,150
47
76,751
78
-14.2
-11.3
0.8
66.0
25,149
1,245
2,735
27,118
3,902
2,397
2,745
14,890
7,853
1,282
3,252
15,379
8,106
3,385
5,091
17,188
11,441
1,895
9,824
19,545
12,189
578
9,097
21,855
15,157
1,565
6,765
19,240
15,612
1,381
7,151
18,113
24.3
170.8
-25.6
-12.0
3.0
-11.8
5.7
-5.9
28,173
2,804
5,992
19,377
43,933
2,376
4,154
37,403
42,522
2,048
6,408
34,066
41,215
2,446
7,837
30,932
35,373
1,836
5,977
27,560
37,202
1,889
6,351
28,962
24,043
589
8,715
14,739
22,785
102
8,569
14,114
-35.4
-68.8
37.2
-49.1
-5.2
-82.7
-1.7
-4.2
2,247
3,585
80,745
29,217
24,691
26,837
1,061
3,759
97,756
32,357
39,216
26,183
F : Final
733
4,007
104,913
26,694
49,062
29,157
1,424
4,418
123,274
32,017
67,902
23,355
2,200
4,765
178,438
45,976
91,098
41,364
2,539
5,231
179,918
42,729
92,345
44,844
3,639
5,694
160,691
25,427
90,062
45,202
A. Public Sector
1. Agriculture
2. Mining and
Quarrying
3. Manufacturing
4. Construction
6. Transport and
Communication
Railways
Post Office & PTCL
Others
7. Wholesale and
Retail Trade
8. Finance &
Insurance
9. Services
B. General Govt.
Federal
Provincial
District Govt.
R: Revised
P: Provisional
2006-07
2007-08
F
2008-09
R
(Rs million)
% Change
2007-08/ 2008-09/
2006-07
2007-08
2009-10
P
5,562
43.3
52.8
6,069
8.9
6.6
175,560
-10.7
9.3
32,102
-40.5
26.3
104,094
-2.5
15.6
39,364
0.8
-12.9
Agriculture
The Agriculture sector continues to play a central role in Pakistans economy. It is the second largest
sector,accountingforover21percentofGDP,andremainsbyfarthelargestemployer,absorbing45
percentofthecountrystotallabourforce.Nearly62percentofthecountryspopulationresidesinrural
areas, and is directly or indirectly linked with agriculture for their livelihood. The Agriculture sectors
stronglinkageswiththerestoftheeconomyarenotfullycapturedinthestatistics.Whileontheone
hand, the sector is a primary supplier of raw materials to downstream industry, contributing
substantially to Pakistans exports, on the other, it is a large market for industrial products such as
fertilizer,pesticides,tractorsandagriculturalimplements.
Despite its critical importance to growth, exports,
Table2.1:Historicalgrowthperformance
incomes, and food security, the Agriculture sector
AgricultureGrowth
has been suffering from secular decline (Table 2.1). Years
Percent
Growth in the sector, particularly in the crop sub 1960's
5.1
1970's
2.4
sector, has been falling for the past three decades.
5.4
Productivityremainslow,withyieldgapsrising(Table 1980's
1990's
4.4
2.2). Critical investments in new seeds, farming
2000's
3.2
technology and techniques, and the water
infrastructure are not being made. Without major
new investments in Agriculture, it is unclear how prepared Pakistan would be to tackle emerging
challenges such as declining water availability, and climate change (for a fuller discussion, see Special
Sectionatendofchapter).
Table2.2:YieldGap(MajorCrops)
World
3086
Difference
FromBest*
65
71510
Difference
FromBest*
59
China
4762
India
2802
100
73114
59
68877
Pakistan
2451
52
USA
3018
63
Brazil
79709
66
4229
Egypt
121136
100
9731
Country
Wheat
*Best=100
Datapertainsto2008
4309
Difference
FromBest*
44
60
6556
57
3370
51494
43
73765
61
Sugarcane
2099
Difference
FromBest*
54
67
3906
100
35
1206
31
3520
36
2046
52
7672
79
2250
58
44
3757
96
100
2333
60
Rice(Paddy)
CottonSeed
Source:MinistryofFoodandAgriculture
13
Recentperformance
Table2.3:AgricultureGrowth
Year
Agriculture
200304
2.4
200405
6.5
200506
6.3
200607
4.1
200708
1.0
200809
4.0
200910(P)
2.0
P=Provisional
MajorCrops
1.7
17.7
3.9
7.7
6.4
7.3
0.2
MinorCrops
3.9
1.5
0.4
1.0
10.9
1.7
1.2
(Percent)
Livestock
Fishery
Forestry
2.9
2.0
3.2
2.3
0.6
32.4
15.8
20.8
1.1
2.8
15.4
5.1
4.2
9.2
13.0
3.5
2.3
3.0
4.1
1.4
2.2
Overthepastsixyears,Agriculturehasgrownatanaveragerateof3.7percentperannum.However,
volatilityinthesectorishigh,withtherangeofgrowthvaryingbetween6.5percentand1.0percent.
Thefluctuationinoverallagriculturehasbeenlargelydependentonthecontributionofmajorcrops.The
trendinagriculturegrowthsince200304isreportedinTable2.3.
Duringtheoutgoingyear200910,theoverallperformanceofagriculturesectorhasbeenweakerthan
target. Against a target of 3.8 percent, and previous years performance of 4.0 percent, agriculture is
estimatedtohavegrownby2.0percent.Majorcrops,accountingfor32.8percentofagriculturalvalue
added, registered a negative growth of 0.2 percent as against robust growth of 7.3 percent last year.
Minor crops contributing 11.1 percent to overall agriculture posted negative growth of 1.2 percent.
Production of Minor crops has declined for the three years since 200405, a worrying trend which is
partiallycontributingtofoodpriceinflation.
The performance of Livestock the single largest contributor to overall agriculture (53.2 percent)
however,grewby4.1percentin200910asagainst3.5percentlastyear.TheFisherysectorexpanded
by 1.4 percent, against its previous years growth of 2.3 percent. Forestry which has experienced
negativegrowthforthelastsixyears,exhibitedpositivegrowthof2.2percentthisyear.Nonetheless,
overthepastseveralyears,theforestsectorhascontracted,underscoringthescaleoftheenvironment
challengefacingacountrythatalreadyhasamongstthehighestratesofdeforestationintheworld.
Pakistans agricultural performance is closely linked with the supply of irrigation water. As shown in
Table2.4,againstthenormalsurfacewateravailabilityatcanalheadsof103.5millionacrefeet(MAF),
theoverall(bothforKharifaswellasRabi)wateravailabilityhasbeenlessintherangeof2.5percent
(200506) to 20.6 percent (200405). However, it remained less by 2.5 percent in 200506 against the
normalavailability.Relativelyspeaking,Rabiseasonfacedshortageofwaterduring200910.
Duringthecurrentfiscalyear(200910),theavailabilityofwaterasanimportantinputforKharif2009
(forthecropssuchasrice,sugarcaneandcotton)hasbeen0.3percentmorethanthenormalsupplies
and0.6percentmorethanlastyearsKharif(seeTable2.4).ThewateravailabilityduringRabiseason
(formajorcropsuchaswheat),is,however,estimatedat26.0MAF,whichis28.6percentlessthanthe
normalavailability,and4.4percentmorethanlastyearsRabi.
14
Agriculture
Table2.4:ActualSurfaceWaterAvailability
Period
Averagesystemusage
200304
200405
200506
200607
200708
200809
200910
Kharif
Rabi
Total
67.1
65.9
59.1
70.8
63.1
70.8
66.9
67.3
36.4
31.5
23.1
30.1
31.2
27.9
24.9
26.0
103.5
97.4
82.2
100.9
94.3
98.7
91.8
93.3
(MillionAcreFeet)
%ageincr/decr.
OvertheAvg.
5.9
20.6
2.5
8.9
4.6
11.3
9.9
Source:IRSA
Efficientirrigationsystemisaprerequisiteforhigheragriculturalproductionsinceithelpsincreasethe
crop intensity. Despite the existence of a good irrigation canal network in the Pakistan, it still suffers
fromwastageofalargeamountofwaterintheirrigationprocess.Positionofrainfallduringmonsoon
andwinterseasonisdetailedgiveninTable2.5:
Table2.5:Rainfall*RecordedDuring200910
Normal
Actual
Shortage()/excess(+)
%Shortage()/excess(+)
*:Areaweighted
(InMillimeter)
MonsoonRainfall
WinterRainfall
(JulSep)2009
(JanMar)2010
137.5
70.5
101.8
49.2
35.7
21.3
26.0
30.2
Source:PakistanMeteorologicalDepartment
During the monsoon season (JulySeptember, 2009) the normal rainfall is 137.5 mm while the actual
rainfallreceivedstoodat101.8mm,indicatingadecreaseof26.0percent.Likewise,duringthewinter
(JanuarytoMarch2010),theactualrainfallreceivedwas49.2mmwhilethenormalrainfallduringthis
periodhasbeen70.5mm,indicatingadecreaseof30.2percentoverthenormalrainfall.
I.CropSituation
There are two principal crop seasons in Pakistan, namely the "Kharif", the sowing season of which
beginsinAprilJuneandharvestingduringOctoberDecember;andthe"Rabi",whichbeginsinOctober
December and ends in AprilMay. Rice, sugarcane, cotton, maize, mong, mash, bajra and jowar are
Kharif" crops while wheat, gram, lentil (masoor), tobacco, rapeseed, barley and mustard are "Rabi"
crops. Major crops, such as, wheat, rice, cotton and sugarcane account for 82.0 percent of the value
addedinthemajorcrops.Thevalueaddedinmajorcropsaccountsfor32.8percentofthevalueadded
in overall agriculture. Thus, the four major crops (wheat, rice, cotton, and sugarcane), on average,
contribute 33.1 percent to the value added in overall agriculture and 7.1 percent to GDP. The minor
crops account for 11.1 percent of the value added in overall agriculture. Livestock contributes 53.2
percenttoagriculturalvalueaddedmuchmorethanthecombinedcontributionofmajorandminor
crops(43.9%).SeeTable2.6
15
Table2.6:ProductionofMajorCrops
Cotton
Year
Sugarcane
(000bales)
14265
47244
200405
(42.0)
(11.6)
13019
44666
200506
(8.7)
(5.5)
12856
54742
200607
(1.2)
(22.6)
11655
63920
200708
(9.3)
(16.8)
11819
50045
200809
(1.4)
(21.7)
12698
49373
200910(P)
(7.4)
(1.3)
P:Provisional(JulyMarch)
*:Figuresinparenthesesaregrowthrates
(000Tons)
Rice
Maize
Wheat
5025
(3.6)
5547
(10.4)
5438
(2.0)
5563
(2.3)
6952
(25.0)
6883
(1.0)
2797
(47.4)
3110
(11.2)
3088
(0.7)
3605
(16.7)
3593
(0.3)
3487
(3.0)
21612
(10.8)
21277
(1.6)
23295
(9.5)
20959
(10.0)
24033
(14.7)
23864
(0.7)
Source:MinistryofFoodandAgriculture
a)MajorCrops:
i)Cotton:
Cotton being a nonfood cash crop contributes significantly in foreign exchange earning. Cotton
accountsfor8.6percentofthevalueaddedinagricultureandabout1.8percenttoGDP.Thecropwas
sown on the area of 3106 thousand hectares, 10.1 percent more than last year (2820 thousand
hectares).Theproductionisestimatedat12.7millionbalesfor200910,higherby7.4percentoverthe
lastyearsproductionof11.8millionbales.However,thecottonproductionwas5.0percentlessthan
thetargetof13.36millionbalesmainlyduetotheshortageofirrigationwater,hightemperaturesinthe
month of August resulting in excessive fruit shedding, flare up of sucking pest complexes and wide
spreadofCottonLeafCurlVirus(CLCV).Area,productionandyieldofcottonforthelastfiveyearsare
giveninTable2.7andFig.2.1.
Fig2.1:CottonProduction(000bales)
0910(P)
0809
0708
0607
0506
0405
0304
0203
0102
0001
9900
9899
9798
15000
14000
13000
12000
11000
10000
9000
8000
Source:M/oFoodandAgriculture,FBS
16
Agriculture
Table2.7:Area,ProductionandYieldofCotton
Area
Production
Yield
Year
(000Hectare)
%Change
(000Bales)
%Change
(Kgs/Hec)
%Change
200506
3103
2.8
13019
8.7
714
6.0
200607
3075
0.9
12856
1.2
711
0.4
200708
3054
0.7
11655
9.3
649
8.7
200809
2820
7.7
11819
1.4
713
9.9
200910(P)
3106
10.1
12698
7.4
695
2.5
Source:MinistryofFoodandAgriculture,FederalBureauofStatistics.
During this 200910 Kharif, an important development was the increasing usage of Bt: Cotton by
farmers. In Sindh, it was observed almost 80% of cotton growing area has become under Bt. cotton
(Australian Bt) with high incidence (60100%) of Cotton Leaf Curl Virus (CLCV) infection. In Punjab, Bt
cotton is grown on almost 80% areas with different names, i.e. Bt121and Bt131 with a range of
segregation(1020%)inthefieldsofBtcotton.MinFAhasfinalizedandgotapprovedfromECCanLOI
andMoUwithactionplantointroduceBtcottonvarietyandBtHybridinPakistanincollaborationwith
M/sMonsanto.
Bt.Cotton:
x BtcottonisdevelopedbyGeneticEngineeringtechniques(Biotechnology).BtcottoncontainsGenes
fromBacillusthuringiensis(Bt.)
x EightcountriescommerciallygrewBtcotton(USA,Australia,China,Indiaetc.).Proteinofthisgeneis
deadlyfortheChewingPestsi.e.American,Army,PinkandSpottedwormbutnotforsuckingpest
likeMealybugetc.
x There may be 30% increase in cotton yield due to resistance against chewing pest and hence
additionalincometopoorfarmersinPakistan.
x The Bt. cotton varieties including Bt hybrids currently grown in Pakistan are from exotic sources
whicharegiventofarmersforcultivationwithoutvalidatingitsperformanceandwithoutproviding
productiontechnologiesbasedonresearchconductedaccordingtolocalenvironment.
x None of these planting materials have been imported legally and have not been tested so far
accordingtorulesandregulationssetbyGovernmentagenciesatFederalandProvinciallevels.
x As a rule and principle chalked out by Federal and Provincial Governments all the Bt cotton
varieties/Hybrids,ithastopassthroughtheproceduresdesignedfortestingandevaluationofthese
materialsbyPakistanCentralCottonCommittee(PCCC),FederalSeedCertificationandRegistration
Department(FSC&RD),NationalBiosafetyCommittee(NBC),DepartmentofPlantProtection(DPP)
andprovincialSeedCouncils.
x PrivateseedcompanyM/sAuregaLahorehassoldBthybridseedforanareaofalmost10thousand
acreswiththenameasWhiteGoldwithoutfollowingprescribedrule.
x Another private seed company M/s Alseeme Multan has sold non Bt cotton hybrid for almost an
areaof10thousandacreswithoutfollowingprescribedrules.
x AlltheBt.cottonvarietiesgrownaresusceptibletoCottonLeafCurlVirus(CLCV)andsuckingpest
i.e.mealybug,JassidandWhiteflywhichareamajorthreattocottoncropinPakistan.
x MostoftheBtcottonvarietiesweremarketedwithwrongnotationofresistancetoallpest.Insome
instancesBt.cottonseedwasmixedwithnonBtcottonseedandaffectedtheyield.
17
x ItisworthmentioningthatSitara,ARS802,ARS703,CEMB1,CEMB2,Neelum121,FH113,MG6
andHybridBtGN2085andGN31aretheonlyBtcottonvarieties/hybridwhichisbeingintroduced
in Pakistan during next crop season following the rules and regulations designed by Federal and
Provincialgovernments.
x ItisimportanttomentionthatduringcurrentyearPakistanAgriculturalresearchCouncil(PARC)has
imported almost 950 kg of five different Bt cotton seed from China under special permission for
conducting trials directly on farmer fields without following the rules and regulations designed by
NBC,PCCC,FSC&RD.
ii)Sugarcane:
Sugarcane is one of the major crops of Pakistan, grown in Kharif season. It provides raw material to
sugarandsugarrelatedproducts.Itgeneratesincomeandemploymentforthefarmingcommunityof
thecountry.Ithelpsinvalueadditiontoessentialitemforindustrieslikesugar,chipboardandpaper.Its
shareinvalueaddedofagricultureandGDPare3.6percentand0.8percent,respectively.For200910,
sugarcanehasbeensownintheareaof943thousandhectares,8.4percentlowerthanlastyear(1029
thousandhectares).Sugarcaneproductionfortheyear200910isestimatedat49.4milliontons,against
50.0milliontonslastyear.Thisindicatesadeclineof1.3percentovertheproductionoflastyear.Main
factors contributing for lesser production are maximum area under wheat crop during 200809
restricted the sugarcane acreage, shortage of canal water, load shedding of electricity, realization of
lowerpricesintheprecedingseasonandhighrateofinputsalsodiscouragedthefarmerstogrowmore
sugarcanecrop.Thearea,productionandyieldperhectareforthelastfiveyearsaregiveninTable2.8
(seealsoFig.2.2)
Fig:2.2:SugarcaneProduction(000Tons)
69000
64000
59000
54000
49000
44000
39000
9899 9900
0001 0102 0203 0304 0405 0506 0607 0708 0809 0910
(P)
Table2.8:Area,ProductionandYieldofSugarcane
Area
Production
Yield
Year
(000Hectare)
%Change
(000Tons)
%Change
(Kgs/Hec.)
%Change
200506
907
6.1
44666
5.5
49246
0.7
200607
1029
13.5
54742
22.6
53199
8.0
200708
1241
20.6
63920
16.8
51507
3.2
200809
1029
17.1
50045
21.7
48635
5.6
200910(P)
943
8.4
49373
1.3
52357
7.7
18
Agriculture
iii)Rice:
Rice is an essential cash crop and one of the main export items of the country. It accounts for 6.4
percentofvalueaddedinagricultureand1.4percentinGDP.Pakistangrowshighqualityricetomeet
bothdomesticdemandandforexports.Areasownforriceisestimatedat2883thousandhectares,2.7
percentlessthanlastyear.Thesizeofthecropisestimatedat6883thousandtons1.0percentlessthan
lastyear.InPunjabsugarcaneareawasalsoshiftedtoricecrop,asthegrowerswerediscourageddueto
nonpaymentoftheirduesintimebythesugarmills.Thearea,productionandyieldofriceforthelast
fiveyearsaregiveninTable2.9andFig2.3.
Fig2.3:RiceProduction(000Tons)
7500
7000
6500
6000
5500
5000
4500
4000
3500
9899
9900
0001
0102
0203
0304
0405
0506
0607
0708 0809 0910

(P)
Table2.9:Area,ProductionandYieldofRice
Area
Production
Yield
Year
(000Hectare)
%Change
(000Tons)
%Change
(Kgs/Hec.)
%Change
200506
2621
4.0
5547
10.4
2116
6.1
200607
2581
1.5
5438
2.0
2107
0.4
200708
2515
2.6
5563
2.3
2212
5.0
200809
2963
17.8
6952
25.0
2346
6.1
200910(P)
2883
2.7
6883
1.0
2387
1.7
iv)Wheat:
Wheat is the leading food grain of Pakistan and being staple diet of the people, it occupies a central
position in formulation of agricultural policies. It contributes 14.4 percent to the value added in
agricultureand3.1percenttoGDP.Areaandproductiontargetofwheatfortheyear200910hadbeen
set at 9045 thousand hectares and 25 million tons, respectively. Wheat was cultivated on an area of
9042 thousand hectares, showing a decrease of 0.04 percent over last years area of 9046 thousand
hectares.Theimpactofwatershortages(availabilityatfarmgate)andlowerrainfallduringthesowing
period has been the main reason for lesser acreage under wheat crop. The size of wheat crop is
provisionally estimated at 23864 million tons, 0.7 percent less than last year crop. The prospects for
wheat harvest improved somewhat with healthy fertilizer off take and reasonable rainfall in pre
harvestingperiod.However,theimpactofloweracreageandwatershortagesislikelytakeitstolland
wheat harvest is estimated to be lower than the 20092010 targets of 25.0 million tons. The Area,
ProductionandYieldperhectareofwheatforthelastfiveyearsaregiveninFig2.4andTable2.10.
19
Fig2.4:WheatProduction(000Tons)
25000
23000
21000
19000
17000
9798 9899 9900 0001 0102 0203 0304 0405 0506 0607 0708 0809 0910P
Table2.10:Area,ProductionandYieldofWheat
Area
Production
Yield
Year
(000hectares)
%Change
(000tons)
%Change
(Kgs/Hec.)
%Changes
200506
8448
1.1
21277
1.6
2519
1.9
200607
8578
1.5
23295
9.5
2716
7.8
200708
8550
0.3
20959
10.0
2451
9.8
200809
9046
5.8
24033
14.7
2657
8.4
200910(P)
9042
0.04
23864
0.7
2639
2.1
Source:MinistryofFoodandAgriculture,FederalBureauofStatistics
Fig2.5:FoodGroupImport
4,000
3,500
MillionUS$
3,000
2,500
2,000
1,500
1,000
500
FY05
FY06
FY07
FY08
FY09
FY10
Source:StateBankofPakistan
v)OtherMajorCrops
During 200910, the production of only rapeseed and mustard increased by 7.4 percent. Gram, the
largestRabipulsescropinPakistan,stoodat5.7milliontonsagainst7.4milliontonsoflastyearshowing
a significant decrease of 23.0 percent during 200910 due to reduction in area cultivated and
unfavourableclimaticchange.Theproductionofjawar,barley,maize,bajraandtobaccodecreasedby
6.7,4.9,3.0,1.0and1.0percentrespectivelyduring200910.Theareaandproductionofmajorcrops
aregiveninTable2.11.
20
Agriculture
Table2.11:AreaandProductionofOtherMajorKharifandRabiCrops
200809
200910(P)
%ChangeIn
Crops
Area
Production
Area
Production
production
(000hectares)
(000tons)
(000hectares)
(000tons)
KHARIF
Maize
1052
3593
950
3487
3.0
Bajra
470
296
476
293
1.0
Jawar
263
165
248
154
6.7
RABI
Gram
1081
741
1050
571
23.0
Barley
86
82
80
78
4.9
Rapeseed &
233
188
185
202
7.4
Mustard
Tobacco
50
105
49
104
1.0
b)MinorCrops
i)Oilseeds
The major oilseed crops include cottonseed, rapeseed/mustard, sunflower and canola etc. The total
availabilityofedibleoilin200809was2.821milliontons.Localproductionofedibleoilstoodat684
thousand tons during 200809, which is 24 percent of the total availability in the country. While the
remaining 76 percent was made available through imports. During 200910 (JulyMarch) 1.246 million
tons edible oil which amounted to Rs. 77.78 billions has been imported. The local production during
200910(JulyMarch)isestimatedat0.680milliontons.Totalavailabilityfromallsourcesisprovisionally
estimatedat1.749milliontonsduring200910(JulyMarch).Theareaandproductionofoilseedcrops
during200809and200910isgiveninTable2.12.
Table2.12:AreaandProductionofMajorOilseedCrops
200809
Area
Production
Crops
Seed
Oil
(000Acres)
(000Tons)
(000Tons)
Cottonseed
6,969
3,015
362
Rapeseed/
577
188
62
Mustard
Sunflower
929
598
227
Canola
172
88
33
Total
8,647
3,889
684
Area
(000Acres)
7,591
486
200910(P)
Production
Seed
Oil
(000Tons)
(000Tons)
3,240
389
160
51
872
554
211
142
76
29
9,091
4,030
680
Source: PakistanOilseedDevelopmentBoard
ii)OtherMinorCrops:
The production of masoor, onion and potato increased by 1.4%, 9.0% and 15.9% respectively. Timely
rainsupplementedtosomeextentforincreasingproductionofmasoor,onionandpotato.However,the
productionofmung,mashandchilliesdecreasedby24.6%,20.6%and0.5%respectively.Thedecreased
inthesecropsismainlyduetoreductionofareaundersuchcropsastheareaofmung,mashandchillies
decreasedby16.6%,12.7%and22.2%respectively.Theareaandproductionofminorcropsaregiven
inTable2.13.
21
Table2.13:AreaandProductionofMinorCrops
200809
Area
Production
Crops
(000hectares)
(000tons)
Masoor
30.9
14.4
Mung
219.7
157.4
Mash
27.6
13.6
Potato
145.0
2941.3
Onion
129.6
1704.1
Chillies
73.8
187.7
200910 (P)
%ChangeIn
Area
Production
Production
(000hectares)
(000tons)
35.5
14.6
1.4
183.3
118.7
24.6
24.1
10.8
20.6
149.0
3411.6
15.9
141.9
1858.0
9.0
57.44
186.7
0.5
Source:MinistryofFoodandAgriculture.
FederalBureauofStatistics
II.FarmInputs
i)Fertilizer:
The Government has taken several significant steps to boost agricultural production over the last five
years. The domestic production of fertilizer during the first nine months (JulyMarch, 200910) of the
currentfiscalyearwasupby4.5percent.Theimportoffertilizerincreasedby133percent;hence,the
total availability of fertilizer also increased by 25.3 percent. Total off take of fertilizer surged by 23.8
percent(Table2.14)duetoasubsidyofRs.500perbagofSulphateofPotash(SOP)/MuriateofPotash
(MOP) has been announced. Nitrogen offtake increased by 15.4 percent while that of phosphate by
66.2percent.MainreasonsforincreasedofftakeoffertilizerswereaffordablepriceofDAPandhigher
support price of wheat. Average retail sale prices of nitrogenous fertilizers increased while that of
phosphatedecreasedconsiderably.
Table2.14:ProductionandOfftakeofFertilizer
Domestic
%
Year
Production Change
200405
2718
7.1
200506
2832
4.2
200607
2747
3.0
200708
2822
2.7
200809
2907
3.0
200809(JulMar)
2141
200910(JulMar)P
2237
4.5
P:Provisional
Import
785
1268
796
876
568
416
968
(000N/tons)
%
%
%
Total
Offtake
Change
Change
Change
2.7
3503
6.1
3694
14.6
61.5
4100
17.0
3804
3.0
37.2
3543
13.6
3672
3.5
10.1
3698
4.4
3581
2.5
35.2
3475
6.0
3711
3.6
2557
2767
132.7
3205
25.3
3426
23.8
Source:NationalFertilizerDevelopmentCentre
ii)ImprovedSeed:
Improved highquality seed or planting material is the most desirable input for improving crop yield.
Seedisanimportantcomponentinagricultureproductivitysystem.Seedhasthebasicpositionamong
variousagriculturalinputsbecausetheeffectivenessofallotherinputsmainlydependsonthepotential
ofseeds.Seedisahightechnologyproductandisaninnovationmostreadilyadapted.Improvingaccess
to good quality seed is a critical requirement for sustainable agricultural growth and food security.
Effectiveuseofimprovedseedcanresultinhigheragriculturalproductionandincreasenetincomesof
farming families, which has a positive impact on rural poverty. Hence, availability of quality seed of
improvedvarietiesisessentialtoachievetheproductiontarget.
22
Agriculture
During 200910 (JulyMarch), about 305.82 thousand tons of improved seed of various
Kharif/Rabi/Spring/Winterseasoncropswasdistributed.Theprocurementanddistributionofseedsof
variousKharifcrops(cotton,paddy,maize,mungbeanetc)isunderprogress.
The Federal Seed Certification and Registration Department (FSC&RD) is engaged in providing seed
certificationcoveragetopublicandprivatesectorseedcompaniesofPakistanalongwithseedquality
controlservicesthroughits28seedtestinglaboratoriesandmonitoringofseedqualityinthemarketas
well.Theactivities/achievementsofthedepartmentduring200910arebrieflygivenasunder:
x During the year 200910, nineteen new seed companies were registered raising the total
number of registered seed companies to 611 in the country including four public sector seed
companiesandfivemultinationals.
x Fifteen crop varieties were approved (wheat4, cotton4, oilseed4, pulses3, fodder1, and
vegetable1)andthirtysevencropvarietieswereevaluatedforregistration.
x Duringtheperiodunderreport,atotalof523.14thousandacresofdifferentcropsofferedby
thevariousseedagencieswereinspectedforcertificationpurposes.
x A total quantity of 305.82 thousand MT seeds of various crops were sampled and tested for
purity,germinationandseedhealthpurposes.
x PreandPostControlTrialsofallprebasic,basicseedlotsand20%ofcertifiedseedlotswere
carriedoutinthefieldtodeterminethequalityofseeddistributedbyvariousseedagencies.
x Undertheprovisionofseedactenforcement,33caseswerefiledinthedifferentCourtsofLaw
againsttheseeddealersfoundsellingsubstandardseeds.
x Importedseedofvariouscrops/hybridsatthetuneof17.55thousandMTwithatotalvalueof
Rs. 3140.85 million was tested under Labeling Seed (TruthinLabeling) Rules, 1991 during the
yearsofarattheportofentriesi.e.LahoreandKarachi.
x Almost 1004 seed samples of various crops/vegetables and fruits were tested at the Central
Seed Health Laboratory, Islamabad for detection of fungal and viral diseases using latest
diagnosistechniquesandprotocols.
x Federal Seed Certification & Registration Department (FSC&RD) with the collaboration of
Ministry Food&AgricultureandallstakeholderspreparedtheStandardOperatingProcedures
(SOPs)forevaluation,releaseandregistrationofcandidatebiotechcropvarietiesinPakistan.
x VariousSeedDevelopmentProjectsarebeingrunduring200910whilethreeprojectsnamely,
EstablishmentofNationalVarietyDataBank,UpgradationofSeedTestingLaboratoriesto
MeetWTORequirementsandEstablishmentofSeedTestingLaboratoriesandRehabilitation
ofExistingLaboratorieshavebeensuccessfullycompleted.
iii)Mechanization:
A demographic change towards urbanization reduces the size of rural workforce, agriculture will also
need to adopt new forms of mechanization and shift to land use intensification, with all of its
connotations.Highagriculturalproductionassuresfoodsecurityandagriculturesurplusesforexportat
competitive prices require efficient development and utilization of agricultural resources. Cost
effectiveness in the production of various crops brings builtin competitive edge to low productivity
attributedfarmers.Farmoperationsbeingtimespecific,demandprecisiontooptimizetheefficienciesof
23
agricultural input for higher productivity. The future changes of free market economy and faster
globalization have further necessitated modernization of agricultural machinery through transfer of
latest, efficient and cost effective technologies to the farming community. Efficient use of scarce
agriculture resources and accelerated agricultural mechanization are, therefore, vital to meet the
challengesoffuturescenariothatneedacomprehensivestrategicloaningforfuture.
Further,topromoteuseofefficientandqualitymachinery&equipmentetc,theFederalGovernment
hasallowedimportofagriculturalmachinerynotbeingmanufacturedlocally,atzerotariffs.Other
interventionslikeuseoflaserlandleveler,ridgeandbroadbedframingsystemarebeingencouragedin
thecountryatconcessionalratestothefarmers.Tobringmorelandundercultivationaprojecttitled
LandandWaterResourcesDevelopmentProjectforPovertyReductioninPakistanenvisaging
providing300bulldozers(200bulldozersBalochistanand100unitstoKhyberPakhtunkhwa)isunder
implementation.
iv)PlantProtection
Plant protection is an important agriculture input as it effectively contributes in achieving higher
productionbysavingitfromravagesofinsectanddiseasepests.Inthisregard,theDepartmentofPlant
Protection(DPP)providesfacilitiessuchasLocustSurveyandControl,PlantQuarantineService,Aerial
PestControl,PesticideRegistration,TestingandManagement.
1. DPPhasconductedDesertLocustSurveyofSindhandPunjabdesertsw.e.f.1stJune2009to30th
September 2009. During this period 6 border meetings with Indian counterparts were
conductedonmonthlybasisatKhokhroparMonabaoborderforexchangeoflocustinformation.
TheSurveyofLocustpotentialareasinBalochistanisinprogresssince1stFebruary,2010which
remaincontinueupto31stMay,2010andjointPakIranCostalareasurveybyacombinedlocust
surveyteamofbothcountriesundertheauspicesofFAOisalsoinprogresswitheffectfrom1st
April2010foronemonth.
2. The department remained in regular coordination with all the Provincial Agriculture Extension
Departmentstomeetanyemergentdemandofaerialspray.
3. EffortsareunderwaybythedepartmentinordertogetthenewPesticides Actpassedbythe
parliament.Thisactwillhelpinimprovingqualitycontrolinspectionandmonitoringinthefield
with the help of the provincial governments. Environmental safeguards will also be improved
with thecollaborationof MinistryofEnvironmentatmanufacturingandformulationstagesof
pesticides.
4. A project of Establishment of Pesticide Quality Control and Research Laboratory Quetta has
been completed in last five years by the Department of Plant Protection with a cost of Rs.
19.262millionandhandedovertoAgricultureExtensionDepartmentofBalochistanon212010
forimprovingqualitycontrolinspectionandmonitoringofpesticidesinBalochistanprovince.
v)Irrigation
ThecanalheadwithdrawalsinKharif2009(AprilSeptember)haveincreasedby1.0percentandstood
at67.3MillionAcreFeet(MAF),ascomparedto66.93MAFduringthesameperiodlastyear.Duringthe
Rabiseason200910(OctoberMarch),thecanalheadwithdrawalsshowsaslightchange,asitremained
at25.02MAFcomparedto24.9MAFduringthesameperiodlastyear.Provincewisedetailsaregiven
inTable2.15.
24
Agriculture
Table2.15:CanalHeadWithdrawals(BelowRimStation)
Provinces
Punjab
Sindh
Baluchistan
Khyber
Pakhtunkhwa
Total
MillionAcreFeet(MAF)
Kharif
(AprSep)
2008
Kharif
(AprSep)
2009
%Changein
Kharif2009
over2008
Rabi
(OctMar)
200809
Rabi
(OctMar)
200910
%Changein
Rabi200910
Over200809
34.23
29.51
2.13
34.57
29.58
2.11
1
0
1
13.28
10.30
0.61
13.36
10.25
0.79
1
1
31
1.06
1.04
0.74
0.62
16
66.93
67.30
1.0
24.94
25.02
0
Source:IndusRiverSystemAuthority.
The Government of Pakistans Vision for the welfare, poverty alleviation and well being of people is
being come true through GDP enhancement. Water is a key source for GDP growth and poverty
alleviation;therefore,thewatersectorgainedmajorfocusthroughoutthelastdecade.Percapitawater
availabilityisdiminishingasPakistanspopulationisincreasing.Inthiscontext,thechallengewillbethe
formulationandeffectiveimplementationofacomprehensivesetofmeasuresforthedevelopmentand
managementofwaterresources.
Themainareasofinvestmentsinwatersectorwere:
a. Augmentationofwaterresources
b. Conservationmeasures
c. Protectionofinfrastructurefromonslaughtoffloods
d. Significantlyenhancedpublicsectorinvestment
e. Construction ofsmall&medium dams,liningofirrigationchannels,rehabilitationofirrigation
system,surfaceandsubsurfacedrainage,liningofwatercourses.
ThestrategyisinlinewiththeMediumTermDevelopmentFramework(MTDF)Program20052010and
also provides a benchmark for moving forward in the next five years. Water being a critical input to
agriculture in arid and semi arid climate zone has been provided financial resources amounting to Rs.
59.92billionincludingwatermanagementprogramme(during200910),despiteeconomicandfinancial
recessionandtransitioneconomyinPakistan.
WATERSECTORFISCALPROGRAMMESDURING(200910)
x WorksonGomalZamDamProjectisTribal/KhyberPakhtunkhwaareacontinuesdespiteoflaw
&ordersituation.
x AsumofRs.5.71billionwasspentforliningofirrigationchannelsinPunjab,SindhandKhyber
Pakhtunkhwa.
x AnamountofRs.16.067billionwasspentfortheimprovement/remodelingofexistingirrigating
system.
MajorwatersectorprojectsunderimplementationaregiveninTable2.16.
25
Table2.16:MajorWaterSectorProjectsunderImplementation
Total
LiveStorage
Projects
Location
App.cost
(MAF)
(Rs.Inmillion)
Khyber
GomalZamDam
12,829
1.14
Pakhtunkhwa
GreaterThalCanal*
Punjab
30,467
AreaUnder
Irrigation
(Acres)
Completion
Date
163,086
Oct,2010
1,534,000
PhaseI,
completed
June,2010,
PhaseI
June,2011
,PhaseI
RaineeCanal*
Sindh
18,862
412,000
KachhiCanal*
Balochistan
31,204
713,000
Raisingof
Allover
AJ&K
62,553
2.90
June,2010
ManglaDam(30ft)
Pakistan
SatparaDam
Skardu
4,397
0.05
15,536
June,2010
Multipurpose
RIGHTBANKOUTFALL
DRAIN
Sindh
14,707
Dec,2011
RBODI
Sindh
29,014
June,2011
RBODII
Balochistan
6,535
June,2011
RBODIII
*DateofcompletionforallthreecanalsisforPhaseI,whereascostisreflectedfortotalproject
Source:WaterResourcesSection,Planning&DevelopmentDivision
v)AgriculturalCredit:
In order to cope with the increasing demand for agricultural credit, institutional credit to farmers is
being provided through Zarai Taraqiati Bank Limited, Punjab Provincial Cooperative Bank Limited, five
big Commercial Banks, and Domestic Private Banks. Adequate availability and access to institutional
credit is essential for accelerating the pace of agricultural development and ensuring Food Security in
thecountry.TheAgriculturalCreditAdvisoryCommittee(ACAC)hasallocatedRs.260billionfortheyear
200910ascomparedto Rs.250billionfixedforlastyearwhichindicatesanincreaseof 11.6percent
overthedisbursementofRs.233billionduringtheyear200809.SeeTable2.17.
Table2.17:SupplyofAgriculturalCreditbyInstitutions
Commercial
Year
ZTBL
PPCBL
Banks
200506
47,594.14
67,967.40
5,889.49
200607
56473.05
80,393.19
7,988.06
200708
66,938.99
94,749.29
5,931.45
200809
75,138.55
110,666.00
5,579.43
200809*
45,399.87
74,364.60
3,538.89
200910*
48,986.53
85,177.16
3,530.02
*:(JulyMarch)
DomesticPrivate
Banks
16,023.38
23,976.16
43,940.92
41,626.33
28,557.24
28,641.15
(Rs.inmillion)
Total
Rs.Million
%Change
137,474.40
26.4
168,830.46
22.8
211,560.66
25.3
233,101.31
10.1
151,860.60
9.6
166,344.86
9.5
Source:StateBankofPakistan.
ZariTaraqiatiBankLimited(ZTBL)
Zari Taraqiati Bank Limited (ZTBL) is the countrys premier financial institution providing financial
services to agriculture sector. It is a key specialized Bank of Pakistan Providing affordable agriculture
financial service to rural sector, comprising 62 percent of the total population. The Bank operates
26
Agriculture
throughacountrywidenetworkof26ZonalOfficesand347branchesandateamof1392MobileCredit
Officersinthefield.ZTBLaloneservesabouthalfamillionfarmersannuallyandhasashareofaround
28.6percentofthetotalinstitutionalagriculturalcredit.SinceinceptionuptoMarch31,2010,theBank
hasdisbursedloanamountingtoRs.648.313billion.Thebanksofarhasfinanced532,254tractorsand
148,486 tubewells besides being the major source of financing for farm inputs including seeds,
fertilizer, pesticides and insecticides. Priority was also accorded to the provision of more credit for
livestock,dairyfarming,poultryfarming,aquacultureandfinancingofoilseedcrops.
NEWPRODUCTSINTRODUCEDBYZTBL
1. BenazirTractorScheme
x Inordertobridgethegapbetweendemandandsupplypositionoftractorsinthecountry,the
Federal Government has decided to launch Accelerated Agricultural Mechanization for
ProductivityEnhancement,BenazirTractorSchemethroughZTBL.
x The scheme envisages supply of 10,000 tractors during 200910 to the farmers to be selected
throughcomputerizedballotingforgrantofsubsidyupto50%ofthecostofthetractorsubject
tomaximumofRs.200,000perbeneficiary/tractor.
2. AwamiZaraiScheme
x AllnewborrowersofcropproductionloanswillhavetoavailrevolvinglimitunderAwamiZarai
SchemetogetinputsthroughM/SKSSLunderkindsystem.Thisschemeisoptionalforexisting
borrowerstotheBank.
3. RuralDevelopmentScheme
x ThisProjectisinitiatedtoprovidecreditassistancefordairy,poultry,sheep&goatfarmingin
theruralareasofAJ&KstateespeciallyinEarthquakeaffectedareas.
III.Forestry
Forests are crucial for the well being of humanity. They provide foundations of life on earth through
ecologicalfunctions,byregulatingtheclimateandwaterresourcesandbyservingashabitatsforplants
and animals. Forests also furnish a wide range of essential goods such as wood, food fodder and
medicinesinadditiontoopportunitiesforrecreation,andotherservices.Forestsareunderpressurefor
expanding human and livestock populations with frequently leads to conversion or degradations of
forestsintounsustainableformsoflanduse.Whenforestsarelostorseverelydegraded,theircapacity
tofunctionasregulatorsoftheenvironmentisalsolost,increasingfloodsanderosionhazards,reducing
soilfertilityandcontributingtothelossofplantandanimallife.UnderMillenniumDevelopmentGoals
of Forestry sector, Pakistan is committed to increase forest cover from existing 5.2 percent to 5.7
percent by the year 2011 and 6 percent by the year 2015. An increase of 1 percent implies that an
additional1.051millionhectaresareahastobebroughtunderforestcoverby2015.
Measurestoenhanceforestcover
x MassAfforestationandTreePlantingCampaigns:Inordertoenhancetreecoverinthecountry,
tree planting campaigns are held each year. During the tree planting campaigns all the
Government Departments, Private organizations, Defence organizations and NGOs were
involvedinplantingactivities.
27
x By2030,Pakistanwillbemanagingalltypesofforestsonecosystemapproach,enablingthemto
perform potential functions of conserving biodiversity, providing sustainable livelihood to
dependent communities, meeting national demands for wood and contributing positively to
mitigateglobalenvironmentalproblems.
x Pakistan has set a new Guinness World Record in maximum tree planting during 24 hours on
July15,2009,threehundredplantersformthelocalcommunitiesplanted541,176propagules
of mangrove tree on 796 acres on an island at Keti Bundar in the Indus Delta. This event was
organized by the Forestry Wing of Ministry of Environment in collaboration with the Sindh
ForestDepartmentandNationalBankofPakistan.
x Prime Minister of Pakistan declared 18th August as National Tree Planting Day (NTPD).
Underlying objective of celebration of NTPD is to address deforestation and associated
environmental problems being faced by the nation through motivation and involvement of all
segments of the society in tree plantation campaign. This was to be achieved by inducing a
cultureandsenseofownershipamongthepublicforforestconservationandtreescultivation
through an extensive but systematic and organized awareness campaign involving print and
electronic media. On 18 August 2009 massive plantation was carried out throughout Pakistan
withthehelpofProvincialForestDepartmentsandFederallineMinistries/agencies.
x MangrovesfortheFuture(MFF)initiativefocusonthecountriesworstaffectedbythetsunami.
However, MFF will also include other countries of the Region that face similar issues, with an
overall aim to promote an integrated ocean wide approach to coastal zone management.
Pakistan joined MFF as dialogue country in 2008. Subsequently, in October 2009 Pakistans
NationalCoordinatingBodyfortheMFFwasdecidedthatPakistanwillprepareitsdraftNational
Strategy & Action Plan (NSAP) as per requirements of Regional Steering Committee of MFF
hostedbyIUCNandUNDPtobecomeregularmemberofthisregionalprogramme.
Duringtheyear200910forestshavecontributed93thousandcubicmetersoftimberand263thousand
cubic meters of firewood as compared to 89 thousand cubic meters timber and 258 thousand cubic
metersfirewoodin200809.Inordertoenhancetreecoverinthecountry,treeplantingcampaignsare
heldeachyear.
IV.LivestockandPoultry
A.Livestock
The overall thrust of Government livestock policy is to foster private sectorled development with
public sector providing enabling environment through policy interventions and play capacity building
role for improved livestock husbandry practices. The emphasis will be on improving per unit animal
productivityandmovingfromsubsistencetomarketorientedandthencommerciallivestockfarmingin
thecountrytomeetthedomesticdemandandsurplusforexport.Thelivestockdevelopmentstrategy
revolvesaroundthefollowing:
1.
2.
3.
4.
5.
6.
PublicPrivatePartnershipleddevelopment.
NationalEconomicgrowth.
PovertyAlleviation.
FoodSecurity.
ImproveLivestockservicedelivery.
Expandopportunitiesforlivelihoodneedsoffarmers.
28
Agriculture
7. EnhanceForeignExchangeEarnings.
Livestock plays an important role in the economy of the country. Livestock sector contributed
approximately 53.2 percent of the agriculture value added and 11.4 percent to national GDP during
200910.Whileotherdevelopmentsectorexperiencedsaturationanddeclinetherehasbeenanincrease
inlivestocksectorin200910.Grossvalueadditionoflivestockatcurrentfactorcosthasincreasedfrom
Rs. 1304.6 billion (200809) to Rs. 1537.5 billion (200910) showing an increase of 17.8 percent as
comparedtopreviousyear.
The population growth, increase in per capita income and export revenue is fueling the demand of
livestockandlivestockproducts.Inordertospeedupthepaceofdevelopmentinlivestocksector,The
Ministry of Livestock & Dairy Development was created as a part of Reform Agenda and political
commitment of present Government to improve service delivery, reduce poverty, achieve sustainable
economic growth and expand opportunities to address the needs of livestock rural farmers and to
protectthelivelihoodconcernsofruralcommunity.Themajorproductsoflivestockaremilkandmeat,
theproductionofwhichforlastthreeyearsisgiveninTable2.18:
Table2.18:MilkandMeatProduction
Species
Milk(GrossProduction)
Cow
Buffalo
Sheep2
Goat
Camel2
Milk(HumanConsumption)3
Cow
Buffalo
Sheep
Goat
Camel
Meat4
Beef
Mutton
Poultrymeat
Units
000Tons
000Tons
000Tons
2007081
2008091
2009101
42,191
43,562
44,978
14,437
14,982
15,546
26,231
27,028
27,848
35
36
36
700
719
739
787
798
808
34,064
35,160
36,299
11,550
11,985
12,437
20,991
21,622
22,279
35
36
36
700
719
739
787
798
808
2,728
2,843
2,965
1,549
1,601
1,655
578
590
603
601
652
707
Source:MinistryofLivestockandDairyDevelopment
Note:
1. Thefiguresformilkandmeatproductionfortheyears200708,200809and200910arecalculatedby
applyingmilkproductionparameterstotheprojectedpopulationof200708,200809and200910basedon
theintercensusgrowthrateoflivestockcensus19962006.
2. ThefiguresfortheMilkproductionfortheyear200708,200809and200910arecalculatedafteraddingthe
productionofmilkfromcamelandsheeptothefiguresreportedinthelivestockcensus2006.
3. Milkforhumanconsumptionisderivedbysubtracting20%(15%wastageintransportationand5%incalving)
ofthegrossmilkproductionofcowsandBuffalo.
4. Thefiguresformeatproductionareofredmeatanddonotincludetheedibleoffals.
B.Poultry
Poultry sector is one of the organized and vibrant segments of agriculture industry of Pakistan. This
29
sector generates employment (direct/indirect) and income for about 1.5 million people. Poultry meat
contributes23.8percentofthetotalmeatproductioninthecountry.PoultryDevelopmentPolicyvisions
sustainable supply of wholesome poultry meat; eggs and value added products to the local and
international markets at competitive prices and aimed at facilitating and support private sectorled
development for sustainable poultry production. The strategy revolves around Improving regulatory
framework;diseasecontrolandgeneticimprovementinruralpoultry;hitechpoultryproductionunder
environmentallycontrolledhousing;processingandvalueaddition;Improvingbiosecurity;needbased
researchanddevelopmentandfarmerstraining&education.Itenvisagespoultrysectorsgrowthof15
20percentperannum.
C.MegaDevelopmentProjects
The Government has substantially increased public sector investment and has initiated mega
development project for strengthening Livestock services for improved disease diagnosis and control,
milkandmeatproduction,breedimprovement,animalhusbandryandmanagementproceduresinthe
country. The Ministry of Livestock & Dairy Development is presently executing seven (07) projects in
LivestocksectoratanestimatedcostofRs.8.8billion.Theseprojectswereapprovedduringthelast3to
4years.Theprogressisanunder:
StrengtheningofLivestockServicesProject(SLSP)
ProjectisofSevenyearsduration(20032010)withtotalcostofRs.1992.66million.Theprojectisaimed
attoeradicaterinderpestdiseasefromthecountry,toenhanceefficiencyandeffectivenessofdelivery
of livestock services, improvement of disease diagnosis, monitoring and reporting system, Vaccine
production particularly against newly emerging and transboundary Animal Disease and capacity
buildingofveterinarystaff.Themajorachievementsoftheprojectare:
x Field studies on 05 models of service delivery are in progress: Community Animal Health
Extension Worker (CAHEW), Women Livestock Extension Worker (WLEW),Dairy Farmers
CooperativeModel(DFCM),WoolProducersAssociation,RuralPoultrySupportModel(RPSM)
x IntroducedPestDesPetitesRuminants(PPR)vaccineproductioninthecountry,and
x EstablishedNationalEpidemiologyNetworkforLivestockDiseaseSurveillanceandReporting.
LivestockProduction&DevelopmentofMeatProduction
This project is of five years duration (20052010) and has total allocation of Rs. 1520 million. It is
assisting in the establishment of 2590 fattening farms (1040 beef and 1550 mutton), 08 Slaughter
houses and 20 butcheries in Private Sector. Under this project more than 9000 feedlot fattening
operations have been completed in which more than 8,000 tons of quality beef and more than 2,000
tonsofmuttonhavebeenproduced.
MilkCollectionProcessingandDairyProduction&DevelopmentProgramme
Thisprojectisoffiveyearsduration(20052010)andhastotalallocationofRs.1588million.Morethan
10,000ruralsubsistencedairyfarmersarelikelytoenterintothemilkmarketingchainduetoproject
interventions. 15,000 to 20,000 additional breeding animals of better genetic potential for milk
productionwillbecomeavailableintheprojectarea.Themajorachievementsoftheprojectincludes:
x Formed207MilkProducerGroups(MPG)inallthefourprovinces,AzadJammu&Kashmirand
30
Agriculture
NorthernArea,
x Installed150milkcoolingtanks,
x Provided 63.3 tons of fodder seeds and 663 tons of animal ration/feed on cost basis to the
membersofMPGs,
x Registered 1004 Sindhi, Sahiwal and NiliRavi livestock breeders for production of quality
breedinganimals.
PrimeMinistersSpecialInitiativeforLivestock(PMSIL)
Thisprojectisof05yearsduration(20052010)havingtotalallocationofRs.1992million.Itisaimedat
enhancing the livestock productivity through the provision of livestock production and extension
servicesatfarmersdoorsteps,targeting13millionruralpoorin1963unioncouncilin80districtsofthe
country.Itsactivitieswillassistintheproductionofadditionalmilkandmeattothetuneof12million
liters and 0.2 million tons per annum respectively, after the completion of the project. The major
achievementsachievedunderthisprojectare:
x 290veterinaryclinicshavebeenestablishedprovidingveterinaryservicesat70percentreduced
costtoruralfarmerattheirdoorstepsi.e.100percentachievement
x Quality medicines/vaccines are available to rural farmer at 30 percent reduced cost as
comparedmarketprices
x 3000numberofruralcommunitypersonshavebeentrainedbyimpartingonemonthtrainingin
basicveterinaryservicesthroughlivestockGovernmentinstitutes
x 44265rurallivestockfemalefarmershavebeentrainedinbetteranimalhusbandrypracticesto
enhancetheirincomethroughenhancedmilkproductivity.
NationalProgrammeforthecontrolandpreventionofAvianInfluenza
Thisprojectisofthreeyearsduration(20072010)havingtotalallocationofRs.1180.142million.The
project is aimed at Development Avian Influenza (Al) Surveillance & Reporting System & Handling Al
outbreaks strengthening diagnostic capabilities & Al vaccine quality control in country. The major
achievementsofthisprojectare:
x Established40Surveillanceunit,66RapidResponseUnits(RRUs),
x Processed0.4millionsamplesofblood,tissues&swabsforscreeningagainstAvianInfluenza,
x EstablishmentofBiosecurityLab.3isunderprocess,
x The project collected and analyzed 190,000 swab samples and more than 200,000 blood
samples.
x DisbursedRs.23.5millionascompensationtoAvianInfluenzaaffectedfarmers,
x PakistanismaintainingAvianInfluenza(birdflu)freestatussinceJune2008.
ImprovingReproductiveEfficiencyofCattleandBuffaloesinsmallholdersproductionsystem
This project is of five years duration (20072010) and has total allocation of Rs. 495.15 million. The
project aimed at establishment of Embryo Transfer Technology Center, Semen Production and
Processing Center, Strengthening of Provincial Semen Production Units and Support of semen
Productioninprivatesector.Thecenterwillproduce5000embryoperyearforfarmuseandsupplyto
31
others:
x CivilworkofEmbryoTransferTechnologyCentreatOkarahascompleted,
x EmbryoTransferTechnologyCentrehasproduced75,498semendosesand640embryosfrom
eliteexoticanimalsforcrossbreedingpurposes,
x Carriedout10,834ArtificialInseminationandtransferredembryosin79animals,and
x ProvidedtrainingtoArtificialInseminationTechnicians.
UpgradationandEstablishmentofAnimalQuarantineStationsinPakistan
Thisprojectisoffiveyearsofduration(20062011)havingtotalallocationofRs.336million.Theproject
isaimedatimprovingquarantinefacilitiesand establishingnew entry/exit points tofacilitate tradeof
animalandanimalproducts:
x 05AnimalQuarantineStations(AQS)havebeenupgradedinordertofacilitateimport/exportof
livestockanditsproducts,
x 02newAQSarebeingestablishedatKhunjrabandKhokhrapar.
D.NewInitiative
MinistryofLivestock&DairyDevelopmenthasconceivedandinitiatednewprojectsworthofRs.5500
millionduring200910.PCII(Feasibilitystudies)ofthefollowingprojectsisunderway:
A feasibility study project on Establishment of Halal Food Certification system in Pakistan was
proposedatatotalcostofRs.1000millionagainstwhichatokenamountofRs.10.0millionisallocated
fortheyear200910.TheobjectiveofthefeasibilitystudyistodevelopPCIregardingestablishmentof
HalalFoodCertificationSysteminPakistan.
AfeasibilitystudyEstablishmentofNationalResearch&ExtensionNetworkisunderimplementation
atacostofRs.20.0million.TheprojectwillassistindevelopingPCIwithatotalcostofRs.1500million
regardingestablishingNationalCamelResearch&ExtensionNetworkinthecountry.
AfeasibilitystudytitledProgressiveControlofFootandMouthDisease(FMD)inPakistanisunder
implementation. It is aimed at undertaking studies on Foot and Mouth Disease prevalence; study its
various strain, prepare control strategy and establish modern Foot and Mouth Disease vaccine
production facility in the country. The allocation for the year 200910 is Rs. 9.390 million. A national
programworthofRs.3.0billionwillbeinitiatedonconclusionoffeasibilitystudyin200910.
PovertyReductionthroughSmallholderLivestockDevelopmentatatotalcostofRs.3539.132million
during the year 200910. The project envisages establishing 400 smallholders livestock farms in the
countryspecificallydesignedtocatertheneedsofpoorfarmersandlandlesslivestocksmallholders.The
farms will be managed by the Members of the community farm on commercial basis in specifically
designed animal sheds with facilities of fodder and water management as well as recycling of organic
wastestoproducebiogas/compost/electricity.
During 200809, the Animal Quarantine Department (AQD) provided quarantine services and issued
18729HealthCertificatesfortheimportofliveanimals,muttonbeef,eggsandotherlivestockproducts
32
Agriculture
havingavalueofmorethan201.7millionUS$.TheAQDgeneratednontaxrevenueofRs.54.38million
whichexceededthetargetofRs.40.00millionfixedfor200809,showinganincreaseof26.44percent.
Theexportofmeat(beef,mutton&camelmeat)during200607wasUS$47.64millionascomparedto
US$74.4millionin200809showinganincreaseof56percent.Themeatexport(beef,mutton&camel
meat)fromJulytoJanuary200910istothetuneofUS$60.2millionwhileliveanimalsexportwasUS$
13.95 million. With the current pace, it is expected that export of meat during the year 200910 may
exceed well beyond 200809 figures. Malaysian Government has shown interest to import 60,000 M.
tonsmeatfromPakistanannually.
V.Fisheries
FisheryplaysanimportantroleinPakistanseconomyandisconsideredtobeasourceoflivelihoodfor
thecoastalinhabitants.Apartfrommarinefisheries,inlandfisheries(basedinriver,lakes,ponds,dams
etc.)isalsoveryimportantactivitythroughoutthecountry.FisheriesshareinGDPalthoughverylittle
but it adds substantially to the national income through export earnings. During the year 200809, a
total of 134,000 m. tons of fish and fishery products were exported earning US$ 236 million.
Government of Pakistan is taking a number of fruitful steps to improve fisheries sector which include
inter alia strengthening of extension services, introduction of new fishing methodologies, increased
production through aquaculture, development of value added products, enhancement of per capita
consumptionoffish,upgradationofsocioeconomicconditionsofthefishermenscommunity.
MarineFisheriesDepartmentisexecutingtwodevelopmentprojectsi.e.theprojectStockassessment
survey programme in EEZ of Pakistan through chartering Research vessel and capacity building of
Marine Fisheries Department, is aimed to charter a suitable vessel of conducting stock assessment
resourcesurveysinthecoastalandoffshorewatersofPakistan,includingExclusiveEconomicZone.The
project is also aimed to strengthen Marine Fisheries Department by capacity building to conduct
resourcesurveyandstockassessmentonregularbasisandtodevelopmanagementstrategyforthefish
exploitation and utilization. For this purposes Iranian research vessel was chartered and first trip of
stockassessmentsurveywasundertakenduring30thOctoberto7thNovember2009.Thedatacollected
duringthesurveyhavebeenanalyzedandcruisereporthasbeenpreparedandsubmittedtoconcerned
agencies.
Twootherprojectsi.e.AccreditationsofqualitycontrollaboratoriesofMarineFisheriesDepartment
and Establishment of Integrated National Animal and Plant Health Inspection Service (NAPHIS) (MFD
component), are also being implemented to provide improved quality control services to the seafood
export industry. These two projects are aimed to get the laboratories of the Marine Fisheries
DepartmentaccreditedwithinternationalbodiesandmeettherequirementsofISO17025.Italsoaimed
toimprovethehumanresourcescapabilitiesofthedepartmentbyinductingtrainedmanpowerandalso
to provide training to existing staff and officers. Microbiological and Chemical Laboratories were
Accredited by the Norwegian Accreditation Agency under ISO/IEC17025 will now be got accredited
fromP.N.A.C
AhatcherycomplexwasestablishedundertheauspicesofadevelopmentprojectentitledEstablished
ofhatcherycomplexforproductionofseedsoffishandshrimpsin2001isbeingrenovatedfromfunds
providedbyFisheriesDevelopmentBoard.TherenovationworkwillbecompletedbyDecember2010.
During the period JulyMarch 200910 the total marine and inland fish production was estimated
33
952,735M.tonsoutwhich667,762M.tonswasmarineproductionandtheremainingcatchcomefrom
inlandwaters.WhereastheProductionfortheJulyMarch200809wasestimatedtobe914,141M.tons
in which 660,141 M. tons was for marine and the remaining was produced by inland fishery sector.
Thereisanincreaseof1.3percentinthequantitycomparedtothelastyear.
SpecialSection:WaterAvailability,Conservation&ManagementinPakistan
Waterisessentialforsustenanceoflifeinallformsandfreshwaterisafiniteresource,progressivelybecoming
scarcerdue to persistent increases in its competing demands. Pakistan possesses the worlds largest contiguous
irrigation system commonly called as Indus Basin Irrigation system. It commands an area of about 14.3 million
hectares(35millionacres)andencompassestheIndusRiveranditsmajortributaries.Thesystemincludesthree
largereservoirs(Tarbela,ManglaandChashma),23barrages/headworks/siphons,12interriverlinksand45canal
commands extending for about 60,800 km to serve over 140,000 farmer operated watercourses. Irrigated
agricultureisthebackboneofthenationaleconomy.Thelevelofagriculturalproductionisdirectlyrelatedtothe
availability and effective use of water as a major input. The demand for water is increasing rapidly while the
opportunities for further development of water resources or maintaining their use to existing levels are
diminishing.TheshortageofwaterparticularlyinRabi
season has further aggravated the ongoing water
Agriculture
crisis.
Fig1:UsesofWater
Industry
Domesticuses
ConsumptionPatternofWater
The consumption pattern of water in domestic,
industrial and agriculture sector is shown in Table.1
andFig1aspercentageoftotaluse.
Table1:UsesofWater
Sectors
Percentage
Agriculture
69%
Industry
23%
Domesticuses
8%
Source:MinistryofEnvironment
8%
23%
69%
Source:M/OEnvironment
EmergingIssues
WaterShortage:Pakistanisoneoftheworld'smostaridcountries,withanaveragerainfallofunder240mm
ayear.Accordingtothebenchmarkwaterscarcityindicator(theFaulkenmarkIndicator),Pakistansestimated
currentpercapitawateravailabilityofaround1,066M3(Table2)placesitinthehighwaterstresscategory
(Table3).
Table2:PerCapitaWaterAvailability
The water shortage scenario in Pakistan is
Population
PerCapitaWater
further aggravated with high variability of
Year
(Million)
Availability(M3)
rainfall.Theonsetofclimatechangeandglobal
1951
34
5260
warming is likely to severely affect the
1961
46
3888
availability of water. To aggravate the
1971
65
2751
situation,afterthelossof3majorrivers,Ravi,
1981
84
2129
Sutlej and Beas, to India under the Indus
1991
115
1565
Waters Treaty 1960, Indias construction of
2002
139.5
1282
water storage infrastructure at Baghlihar and
2010
167.7
1066
Kishanganga, is threatening to disrupt the
2020
195.5
915
uninterrupted flow of water downstream into
2025
208.4
858
Pakistan.
Source:PlanningCommission
34
Agriculture
Compoundingloweravailabilityistheissueofinadequatewaterstorage.Pakistanstoresaround40%ofthe
worldsaverageintermsofstorage.Incomparison,thestoragecapacityofColoradois497%,Nile347%,India
33%,whilePakistanhasjust9%storagecapacity.Aspopulationsizeincreases,resourcesbecomescarcein
termsofpercapitathesameisincasewithWaterResourcesthatarestatisticinnaturewemayconserveand
managethemonly.Thecurrentpercapitawateravailabilityat1066m3/personislow,withPakistaninthe
categoryofahighwaterstresscountry(Table2),thatrequirestoconcentrateonwaterresource
development,urbanandruralwatersupplyandsanitation,industrialwatersupply,irrigationanddrainage,
hydropowerandenvironmentprotection.
PerCapitaavailability
PerCapitaAvailability(M)3
Fig2WaterAvailabilityVsPopulationGrowth
PopulationGrowth
6000
5000
230
180
4000
130
3000
2000
80
1000
30
0
1951
1961
1971
1981
1991
2002
2010
2020
Population(Million)
2025
Table3:WaterScarcityIndicators(FaulkenmarkIndicator)
>1700M3/Capita
WaterScarcityRare
<1700M3/Capita
Countryfacesseasonalorregularwaterstressedconditions
<1000M3/Capita
Watershortageshamperthehealthandwellbeingofthehumanbeings
Economicactivitiesareaffected
<500M3/Capita
Shortagesaresevereconstraintstohumanlife
Source:IRSA
LowWaterProductivity:Whateverwaterisavailableisutilizedinaninefficientmanner.Waterproductionin
Pakistanislessthan0.1kg/m3ascomparedto0.39kg/m3inIndia.
AgingandOutdatedInfrastructure:Pakistanisblessedwithoneofthelargestcontiguousirrigation
infrastructure.However,itwasdesignedforwaterrequirementsofthe20thcenturyandnotforthe21st
century.Thedesignofsystemwasfor60%croppingintensityandnowthecroppingintensityhascrossedover
120%.Furtherthecroppingpatternonwhichwaterdemandsandwithdrawalswereworkedoutwasnot
supposedtocatertocropslikesugarcaneandricewhichrequirehighwateruse.Thesystemmaintenancealso
requiresalotmoreattentionduetodeferredmaintenanceoverthelast100years.
InnovativeKnowledgeBasedManagement:Challengesofthe21stcenturyrequirethefrontiersofknowledge
andinnovativeapproachesratherthanhistoricpractices.Theinstitutionsneedredefiningoftheirrolesandto
developtheircapacitiesaccordingtonewresponsibilities.
Ownership,ReformsandJointManagement:Theirrigationinfrastructureoperationandonfarmpractices
needownershipofthestakeholderssuchasfarmers,professionalsandrevenuecollectors.Ajoint
managementmodeneedstobedevisedasareawaterboardsandfarmersorganizations.
Equity:Waterprovidesprosperityandjobs,andactsasaforcemultiplierinthenationaleconomy.
However,seriousconcernsexistwithrespecttospendingcommonpoolmoneytothebenefitofselected
groupsintheabsenceofpolicyonequity.Thedisadvantagedgroupsare:
i.
Usersattailendofcanalcommands
ii.
FarmersoutsideIndusBasin
35
iii.
Farmersusinggroundwaterwithoptionsofcostlydiesel/electricity
WaterResourcesofPakistanconsistsmainlyofrainfall,rivers,glacier,groundwateretc.Therearetwomajor
sourcesofrainfallinPakistan.TheMonsoonandWesterndisturbances.FlowofIndusbasindependsheavilyupon
theglaciersofWesternHimalayas.VarioussourcesofriverflowsareshowninTable4.
Table4:ContributionofSnow,Rain&GlaciersinUpperIndusBasinFlows
Location
Snow(%)
Rain(%)
RiverIndusaboveTarbela
3035
510
RiverJhelumaboveMangla
65
35
RiverKabulaboveNowshera
2030
2030
Glaciers(%)
6080
3035
Source:WAPDA
In1960,theIndusWatersTreatywassignedbyIndiaandPakistan.Accordingtothistreaty,Pakistangotfullrights
onitsWesternriversi.e.Indus,Kabul,JhelumandChenab.Theaverageannualrunoffoftheseriversis140MAF,
withminimumrecordedsofaraslowas97MAFandmaximum172MAF.Correspondingtothis,annualdiversion
atthebarragesforirrigationpurposesisabout104MAF.
TherearethreeprimarystoragereservoirsatTarbela,ManglaandChashmawithanoriginaltotalstoragecapacity
totaling18.37MAF.Thereservoirsregulatethenaturalflowsforirrigationpurposesandhydropowergeneration
andhelpinutilizingthestoredwaterduringthelowflowseason.From15.75MAFoflivestorageofreservoir4.18
MAFabout27percenthaslostduetosedimentation.Duetolossstorage,agricultureofPakistanisfacingshortage
duringlowflowseason.AccordingtoIndusRiverSystemAuthority(IRSA)theshortagehasgoneupto30percent.
Consequently it is becoming difficult for IRSA to fulfill the demand of provinces during Rabi. Loss of storage of
reservoirsisgivenbelowinTable5.
ThesurfacewateroftheIndussystemisutilizedthrough19barrages,12linkscanals,43canalcommandsand
100,000tertiaryirrigationcommands(Chaks).IrrigationreleasesfromthereservoirsareplannedbytheIndus
RiverSystemAuthority(IRSA).
Table5:LossofStorageofReservoirs
Reservoir
Original
Gross Live
Dead
Tarbela
11.62 9.69
1.92
Mangla
5.88
5.34
Chashma
0.87
Total
18.37
Gross
7.95
Present
Live
6.77
Dead
1.18
0.54
4.67
4.54
0.13
0.72
0.15
0.32
0.26
0.06
15.75
2.62
12.95
11.58
1.37
Gross
3.67
32%
1.21
21%
0.55
63%
5.42
30%
(MAF)
Loss
Live
Dead
2.92
0.74
30%
39%
0.80
0.41
15%
76%
0.45
0.10
63%
62%
4.18
1.25
27%
48%
Source:WAPDA
EscapagetoSea
Despiteacutewatershortageinthesystem,datashowsthatasubstantialamountofwaterescapesbelowKotrito
theArabianSea.ThedatashowsthatpostconstructionofTarbela(19762008)averageannualescapagesbelow
Kotriare31.48MAF,withamaximumof91.83MAFin199495andminimumof0.79MAFin200001.Mostofthe
flowtotheseaoccursduringKharifseasonandverylittleduringRabiseason.
36
Agriculture
Groundwater
GroundwaterundertheIndusIrrigationSystemisplentifulandisderivedfrominfiltrationofsurfacewateraswell
aslocalrainfall.However,dependinguponthequality,theuseablegroundwaterisconfinedtoanareaof10
millionhectares.Thedevelopmentofthisresourceisthroughprivatetubewellsandaccountforagrossabstraction
ofabout40MAFperannum.Thesurfacewaterandgroundwaterandallcanalcommandsarebeingusedin
conjunctiveenvironment.Inmanycanalcommands,pumpageisgreaterthanrecharge,thuscausingsubsidence.
Thereisnoregularandpropermonitoringofprivatetubewellscapacity,theirpumpinghoursandutilization.
WaterAvailabilityandRequirementGap
AccordingtotheWaterAccord1991,117MAFwaterisrequiredforirrigationbytheprovinces.Thewater
resourcesavailableforfuturedevelopmentare36MAFofriverflow6.4MAFofgroundwatercontributionand3
MAFofrainfallharvesting.Besides,agriculturerequirements,theestimatedadditionalwaterneedstomeetthe
municipalwatersupply,ruralpotableandsanitationindustryandenvironmentareestimatedat8MAF(asper
NationalWaterPolicy,2003).
FutureStrategicAreastoCombatWaterSecurityRisk
Thefollowingcoreareasrequireimmediateattentionwhileformulatingcontingencyactionplanand
management/policyplans:
a)
b)
c)
d)
Waterdemandmanagement
ClimatechangeimpactsinPakistan
Potentialuseofsalinewater
Assetprotectionofirrigationinfrastructure
a.Waterdemandmanagement
Wateravailabilityisdiminishingwithagrowingpopulationandincreasingurbanization.Theneedforbetterwater
demandmanagementiswellestablished.Thefollowingrepresentsomeareasofimmediateattention:
Promotingefficientuse
Pricingwaterbetter
Optimizingcroppingpattern
Integrateduseandrecyclingofwater
b.ClimateChangeImpact
PakistanhasbeencitedasamongstthemostvulnerablegroupduetoExtremeweather,changeintemperature
+rainfall.
PotentialImpacts
Glaciersmelting.
Droughts.
FloodEvent.
ChangeinRainfallPattern.
Theclimatechangerequiresthefollowingactionse.g.Potentialoffsets
Needforcarryoverdams
Efficientirrigation(waterconservation&demandmanagement)
Controllingpopulationgrowthrate
Changedcroppingpattern
37
c.Salinewaterpotential
Pakistansgroundwateraquiferconsistsofjoinlayersoffreshandsalinewatersandtheproportionalpercentage
of these layers varies from place to place. Todays groundwater pumpage is around 50 MAF which can be
increasedbyharnessingadditional25MAFpumpageofsalinewaterandutilizationofsalinedrainagesurplusof3
5 MAF. The biosaline technology is tobepromoted. The investmentwill be required in future adoption ofbio
salineagriculturaltechnology.
d.AssetProtectionofIrrigationInfrastructure
Pakistanhasthelargestcontiguousirrigationsystemintheworldwhichcommandsanareaof42millionacres.The
IndusRiveranditswesterntributariesonanaveragebringabout142millionacrefeet(MAF)ofwaterannuallyand
theaverageannualcanalwithdrawalis104MAF.TheSystemhasthreemajorreservoirs,19barrages,12inter
riverlinkcanals,45independentirrigationcanalsystemsandmorethan110,000watercourses.Thetotallengthof
thecanalsystemisabout64000Km,thesystemalsoutilizesanestimated42MAFofgroundwaterpumped
throughmorethan921,229tubewells(mostlyprivate)tosupplementthecanalsupplies.
Pakistanneedsmorewater,howeverthereislesslikelihoodthatnewwaterstorageprojectscouldbecompleted
innext34years.Pakistanisextraordinarydependentonitswaterinfrastructure,andithasinvestedinit
massively.ThenaturalstateofheavilysiltladenriverIndusistomeander.Thisisbecauseassiltbuildsupintheir
beds,theriversseeklowerlandsandchangetheircourses.Thiscreateshavocwithhumansettlementsandso,
throughouttheworld,suchrivershavebeentrainedandconfinedbyembankmentswithinrelativelynarrowbeds.
Overtime,thelikelihoodofembankmentbreachingincreasesfromfloods.
TheIndusBasinisasingle,massive,highlycomplexinterconnectedecosystem,uponwhichmanhasleftahuge
footprint.Whenadamorbarrageisconstructedthewaterandsedimentcyclesarechangeddramatically.When
waterisdivertedontodeserts,thewaterandsaltbalancesseeknewequilibriums.TheInvestmentinbuilding
knowledgebaseandtheaccompanyinginstitutionalandhumansystemsisKeyforefficientoperationofthe
massiveirrigationworks.
Conclusion:
Itisimportanttoensurewatersecurityforthepeoplethroughanationalwaterpolicylayingdowntheoutlinesof
anintegratedwatermanagementstrategythataimsatmaximizingthesustainableeconomic,socialand
environmentalreturnsonthewaterresourcedevelopment,allocationamongitscompetingdemands,itsuseby
consumersandsafedisposalofpostuseeffluents.
38
TABLE 2.1 (A)

INDEX OF AGRICULTURAL PRODUCTION
Fiscal
All major
Year
crops
1991-92
143.7
1992-93
141.0
1993-94
155.0
1994-95
165.4
1995-96
163.3
1996-97
155.3
1997-98
186.2
1998-99
189.8
1999-00
178.4
2000-01
165.9
2001-02
172.1
2002-03
185.4
2003-04
190.7
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10 P
P : Provisional, Jul-Mar
1980-81 Base
Food
Fibre
crops
crops
122.5
305.9
124.0
216.0
123.6
191.8
133.1
207.5
137.0
252.8
136.5
223.6
150.2
219.1
147.6
209.7
167.7
268.2
152.8
256.0
142.9
253.2
153.9
243.6
159.6
239.7
-
Other
crops
120.5
118.0
137.5
146.0
140.1
130.3
164.5
170.9
143.7
135.1
148.7
160.9
165.1
-
All major
crops
100
93
97
104
107
104
101
117
126
114
112
1999-2000 Base
Food
Fibre
Other
crops
crops
crops
100
100
100
91
95
94
85
94
104
92
91
112
95
89
115
106
127
102
107
116
96
115
114
118
108
104
138
124
105
108
122
113
106
TABLE 2.1 (B)

BASIC DATA ON AGRICULTURE
Fiscal
Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10 P
.. : not available
P : Provisional, Jul-Mar
* : At farm gate
Cropped Area
(million
hectares)
21.82
21.72
22.44
21.87
22.14
22.59
22.73
23.04
22.86
22.74
22.04
22.12
21.85
22.94
22.78
23.13
23.56
23.85
23.80
23.80
Improved
seed distribution
(000 Tonnes)
83.27
65.93
63.93
63.27
76.87
145.10
137.67
130.50
167.38
194.30
193.80
191.57
172.02
178.77
218.12
226.07
218.60
264.67
314.63
305.82
Water*
Availability
(MAF)
119.62
122.05
125.12
128.01
129.65
130.85
132.05
122.15
133.78
133.28
134.77
134.63
134.48
134.78
135.68
137.78
137.80
142.44
142.86
142.00
Fertilizer
off-take
(000 N/T)
1892.90
1,884.00
2,147.61
2,146.80
2,183.10
2,515.05
2,413.01
2,646.00
2,583.00
2,832.00
2,964.00
2,929.00
3,020.00
3,222.00
3,694.04
3,804.00
3,672.00
3,581.00
3,711.00
3,426.00
Credit
disbursed
(Rs million)
14,915
14,479
16,198
15,674
22,373
19,187
19,548
33,392
42,852
39,688
44,790
52,314
58,915
73,446
108,733
137,474
168,830
211,561
233,010
166,335
(Contd.)
TABLE 2.1 (B)

BASIC DATA ON AGRICULTURE
Number of
Fiscal
Tube wells
Year
(a)
1990-91
339,840
1991-92
355,840
1992-93
374,099
1993-94
444,179
1994-95
463,463
1995-96
485,050
1996-97
506,824
1997-98
531,259
1998-99
563,226
1999-00
609,775
2000-01
659,278
2001-02
707,273
2002-03
768,962
2003-04
950,144
2004-05
984,294
2005-06
999,569
2006-07
931,306
2007-08
921,121
2008-09
921,229
2009-10 P
921,229
.. : not available
P : Provisional (July-March)
* : Revised
Production of
Production
Tractors
of meat
(Nos)
(000 Tonnes)
13,841
1,581
10,077
1,685
16,628
1,872
15,129
2,000
17,063
2,114
16,218
1,841
10,121
1,908
14,242
1,841
26,885
1,906
35,038
1,957
32,553
2,015
24,311
2,072
27,101
2,132
36,059
2,188
44,095
2,271
49,642
2,515
54,431
2,618
53,598
2,728
60,561
2,843
69,245
2,965
(a) : Public and private tube wells.
E : Estimated
Milk
(000 Tonnes)
15,481
16,280
17,120
18,006
18,966
22,970
23,580
24,215
24,876
25,566
26,284
27,031
27,811
28,624
29,438
31,970
32,986
34,064
35,160
36,299
Fish
Total
Production
Forest Production
(000 Tonnes)
(000 cu.mtr.)
483.0
1,072
553.1
491
621.7
691
558.1
703
541.9
684
555.5
720
589.7
343
597.0
386
654.5
436
614.8
364
629.6
472 *
637.8
487 *
566.2
266 *
573.5
313 *
580.6
282 *
604.9
265 *
640.0
373 *
885.0
363
914.1
347
925.7
356
Source: 1. Federal Bureau of Statistics.
2. Ministry of Food and Agriculture
TABLE 2.2
LAND UTILIZATION
Fiscal
Year
Total
Area
Reported Forest
Area
Area
Not Available for Culturable

Cultivation
Waste
(Million hectares)
Cultivated Area
Total
Current
Net Area Total Area
Area Sown
Cropped
Fallow
Sown
Cultivated
more than
Area
(7+8)
once
(8+10)
7
8
9
10
11
4.85
16.11
20.96
5.71
21.82
4.87
16.19
21.06
5.53
21.72
4.95
16.45
21.40
5.99
22.44
5.29
16.22
21.51
5.65
21.87
5.42
16.13
21.55
6.01
22.14
5.19
16.49
21.68
6.10
22.59
5.48
16.50
21.98
6.23
22.73
5.48
16.48
21.96
6.56
23.04
5.35
16.58
21.93
6.28
22.86
5.67
16.29
21.96
6.45
22.74
6.73
15.40
22.13
6.64
22.04
6.60
15.67
22.27
6.45
22.12
6.61
15.60
22.21
6.25
21.85
6.23
15.89
22.12
7.05
22.94
6.86
15.27
22.13
7.51
22.78
6.72
15.39
22.65
7.74
23.13
5.72
16.16
21.88
7.40
23.56
4.93
16.34
21.27
7.51
23.85
4.93
16.28
21.18
7.52
23.80
4.93
16.28
21.21
7.52
23.80
Source: Ministry of Food and Agriculture
1
2
3
4
5
6
1990-91
79.61
57.61
3.46
24.34
8.85
1991-92
79.61
57.87
3.47
24.48
8.86
1992-93
79.61
58.06
3.48
24.35
8.83
1993-94
79.61
58.13
3.45
24.43
8.74
1994-95
79.61
58.50
3.60
24.44
8.91
1995-96
79.61
58.51
3.61
24.35
8.87
1996-97
79.61
59.23
3.58
24.61
9.06
1997-98
79.61
59.32
3.60
24.61
9.15
1998-99
79.61
59.28
3.60
24.52
9.23
1999-00
79.61
59.28
3.78
24.45
9.09
2000-01
79.61
59.44
3.77
24.37
9.17
2001-02
79.61
59.33
3.80
24.31
8.95
2002-03
79.61
59.45
4.04
24.25
8.95
2003-04
79.61
59.46
4.01
24.23
9.10
2004-05
79.61
59.48
4.02
24.39
8.94
2005-06
79.61
57.22
4.03
22.87
8.21
2006-07
79.61
57.05
4.18
22.70
8.30
2007-08
79.61
57.08
4.21
23.41
8.19
2008-09
79.61
57.08
4.21
23.45
8.20
2009-10 P
79.61
57.08
4.21
23.45
8.20
P : Provisional
Note:
TOTAL AREA REPORTED is the total physical area of the villages/deh, tehsils or districts etc.
FOREST AREA is the area of any land administered as forest under any legal enactment dealing with forests. Any
cultivated area which may exist within such forest is shown under heading "cultivated area".
AREA NOT AVAILABLE FOR CULTIVATION is that uncultivated area of the farm which is under farm home steads, farm roads and
other connected purposes and not available for cultivation.
CULTURABLE WASTE is that uncultivated farm area which is fit for cultivation but was not cropped during the year under
reference nor in the year before that.
CURRENT FALLOW (ploughed but uncropped) is that area which is vacant during the year under reference but was sown at least once
during the previous year
CULTIVATED AREA is that area which was sown at least during the year under reference or during the previous year.
Cultivated Area = Net Area sown + Current Fallow.
NET AREA SOWN is that area which is sown at least once during (Kharif & Rabi) the year under reference.
AREA SOWN MORE THAN ONCE is the difference between the total cropped area and the net area sown.
TOTAL CROPPED AREA means the aggregate area of crops raised in a farm during the year under reference including the area
under fruit trees.
TABLE 2.3
AREA UNDER IMPORTANT CROPS
Fiscal
Year
Wheat
Rice
1990-91
7,911
2,113
1991-92
7,878
2,097
1992-93
8,300
1,973
1993-94
8,034
2,187
1994-95
8,170
2,125
1995-96
8,376
2,162
1996-97
8,109
2,251
1997-98
8,355
2,317
1998-99
8,230
2,424
1999-00
8,463
2,515
2000-01
8,181
2,377
2001-02
8,058
2,114
2002-03
8,034
2,225
2003-04
8,216
2,461
2004-05
8,358
2,520
2005-06
8,448
2,621
2006-07
8,578
2,581
2007-08
8,550
2,515
2008-09
9,046
2,963
2009-10 P
9,042
2,883
Note : 1 ha = 2.47 acres
P : Provisional (Jul-Mar)
Bajra
491
313
487
303
509
407
303
460
463
313
390
417
349
539
343
441
504
531
470
476
Jowar
417
383
403
365
438
418
370
390
383
357
354
358
338
392
308
254
292
281
263
248
Maize
845
848
868
879
890
939
928
933
962
962
944
942
935
947
982
1,042
1,017
1,052
1,052
950
Barley
157
149
160
151
165
171
152
163
137
124
113
111
108
102
93
90
94
91
86
80
Total
Food
Grains
11,934
11,667
12,191
11,919
12,297
12,473
12,113
12,618
12,599
12,734
12,359
12,000
11,989
12,657
12,603
12,896
13,066
13,020
13,880
13,679
(000 hectares)
Rapeseed
Sugarand
SesaGram
cane Mustard mum
Cotton Tobacco
1,092
884
304
53
2,662
44
997
896
287
70
2,836
54
1,008
885
285
82
2,836
58
1,045
963
269
73
2,805
57
1,065
1,009
301
80
2,653
47
1,119
963
320
90
2,997
46
1,100
965
354
100
3,149
49
1,102
1,056
340
96
2,960
53
1,077
1,155
327
71
2,923
57
972
1,010
321
72
2,983
56
905
961
273
101
2,927
46
934
1,000
269
136
3,116
49
963
1,100
256
88
2,794
47
982
1,074
259
60
2,989
46
1,094
966
243
66
3,193
50
1,029
907
217
82
3,103
56
1,052
1,029
256
71
3,075
51
1,107
1,241
224
76
3,054
51
1,081
1,029
233
91
2,820
50
1,050
943
185
80
3,106
49
Source: 1. Ministry of Food and Agriculture
2. Federal Bureau of Statistics
TABLE 2.4
PRODUCTION OF IMPORTANT CROPS
Fiscal
Year
Wheat
Rice
1990-91
14,565 3,261
1991-92
15,684 3,243
1992-93
16,157 3,116
1993-94
15,213 3,995
1994-95
17,002 3,447
1995-96
16,907 3,966
1996-97
16,651 4,305
1997-98
18,694 4,333
1998-99
17,858 4,674
1999-00
21,079 5,156
2000-01
19,024 4,803
2001-02
18,226 3,882
2002-03
19,183 4,478
2003-04
19,500 4,848
2004-05
21,612 5,025
2005-06
21,277 5,547
2006-07
23,295 5,438
2007-08
20,959 5,563
2008-09
24,033 6,952
2009-10 P 23,864 6,883
Total
Food
Bajra Jowar Maize Barley Grains
196 239 1,185
142
19,588
139 225 1,203
140
20,634
203 238 1,184
158
21,056
138 212 1,213
146
20,917
228 263 1,318
164
22,422
162 255 1,504
174
22,968
146 219 1,491
150
22,962
211 231 1,517
174
25,160
213 228 1,665
137
24,773
156 220 1,652
118
28,380
199 218 1,643
99
25,987
216 222 1,664
100
24,311
189 203 1,737
100
25,889
274 238 1,897
98
26,855
193 186 2,797
92
29,905
221 153 3,110
88
30,396
238 180 3,088
93
32,337
305 170 3,605
87
31,198
296 165 3,593
82
35,121
293 154 3,487
78
34,759
Gram
531
513
347
411
559
680
594
767
698
565
397
362
675
611
868
480
838
475
741
571
Sugarcane
35,989
38,865
38,059
44,427
47,168
45,230
41,998
53,104
55,191
46,333
43,606
48,042
52,056
53,419
47,244
44,666
54,742
63,920
50,045
49,373
(000 tonnes)
Rapeseed
and
SesaCotton
TobMustard mum (000 tonnes) (000 Bales) acco
228
21.4
1,637
9,628
75
220
28.7
2,181
12,822
97
207
34.0
1,540
9,054
102
197
32.3
1,368
8,041
100
229
36.2
1,479
8,697
81
255
39.5
1,802
10,595
80
286
44.9
1,594
9,374
92
292
42.5
1,562
9,184
99
279
32.1
1,495
8,790
109
297
35.4
1,912
11,240
108
230
50.7
1,826
10,732
85
221
69.6
1,805
10,613
94
215
19.3
1,737
10,211
88
221
25.0
1,709
10,048
86
203
30.0
2,426
14,265
101
172
35.0
2,215
13,019
113
212
30.0
2,187
12,856
103
176
32.8
1,982
11,655
108
188
41.0
2,010
11,819
105
202
33.4
2,160
12,698
104
Source: 1. Ministry of Food and Agriculture
2. Federal Bureau of Statistics
TABLE 2.5
YIELD PER HECTARE OF MAJOR AGRICULTURAL CROPS
(Kg/Hectare)
Fiscal Year
Wheat
Rice
Sugarcane
Maize
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10 P
P : Provisional
1,841
1,990
1,946
1,893
2,081
2,018
2,053
2,238
2,170
2,491
2,325
2,262
2,388
2,375
2,568
2,519
2,716
2,451
2,657
2,639
1,543
1,546
1,579
1,826
1,622
1,835
1,912
1,870
1,928
2,050
2,021
1,836
2,013
1,970
1,995
2,116
2,107
2,212
2,346
2,387
40,720
43,371
43,024
46,144
46,747
46,968
43,521
50,288
47,784
45,874
45,376
48,042
47,324
49,738
48,906
49,246
53,199
51,507
48,635
52,357
1,401
1,419
1,364
1,380
1,481
1,602
1,607
1,626
1,731
1,717
1,741
1,766
1,858
2,003
2,848
2,985
3,036
3,427
3,415
3,670
Gram
Cotton
486
615
514
769
344
543
393
488
524
557
607
601
540
506
696
528
648
511
581
641
439
624
388
579
701
622
622
572
793
760
467
714
797
711
429
649
685
713
543
695
Federal Bureau of Statistics.
TABLE 2.6
PRODUCTION AND EXPORT OF FRUIT
Fiscal
Citrus
Year
1990-91
1,609
1991-92
1,630
1992-93
1,665
1993-94
1,849
1994-95
1,933
1995-96
1,960
1996-97
2,003
1997-98
2,037
1998-99
1,862
1999-00
1,943
2000-01
1,898
2001-02
1,830
2002-03
1,702
2003-04
1,760
2004-05
1,944
2005-06
2,458
2006-07
1,472
2007-08
2,294
2008-09
2,132
2009-10 P
2,203
Mango
776
787
794
839
884
908
915
917
916
938
990
1,037
1,035
1,056
1,671
1,754
1,719
1,754
1,728
1,847
Production of Important Fruit (000 tonnes)

Apple
Banana
Apricot Almonds
243
295
339
442
533
554
569
573
589
377
439
367
315
334
352
351
348
442
441
426
202
44
52
53
80
82
83
94
95
125
139
150
143
154
158
164
150
156
157
155
81
109
122
153
178
191
188
189
191
121
126
125
130
211
205
197
177
240
238
235
32
38
40
45
49
49
49
49
50
32
33
26
24
24
23
23
23
27
27
26
Export
(000
Value
tonnes)
(Mln. Rs)
33
355
112
935
36
373
125
966
38
384
121
1,179
40
402
127
1,324
43
420
139
1,256
72
442
135
1,487
74
448
219
2,776
74
455
202
2,793
76
468
181
2,773
40
494
240
4,130
51
526
260
4,586
53
539
290
5,097
52
532
263
4,861
51
550
354
5,912
49
572
281
5,408
49
552
455
7,508
47
555
343
6,894
75
539
411
9,085
76
512
466
12,314
77
516
533
16,554
Federal Bureau of Statistics
Grapes
Guava
TABLE 2.7
CROP WISE COMPOSITION OF VALUE OF MAJOR AGRICULTURAL CROPS
(AT CONSTANT FACTOR COST 1999-2000)
Fiscal Year/
Crops
All Major Crops
Food Crops
Wheat
Rice
Bajra
Jowar
Maize
Gram
Barley
Fibre Crops
Cotton
Cash Crops
Sugarcane
Other Crops
Sesamum
Rape Seed & mustard
Tobacco
R : Revised
P : Provisional
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
100.00
62.32
40.39
15.62
0.45
0.44
3.10
2.11
0.20
24.89
24.89
11.27
11.27
1.52
0.34
0.70
0.84
100.00
60.34
39.48
14.54
0.50
0.46
3.21
1.95
0.21
25.26
25.26
12.63
12.63
1.77
0.47
0.75
0.55
100.00
62.66
39.26
15.85
0.41
0.39
3.13
3.41
0.19
22.98
22.98
12.95
12.95
1.41
0.12
0.81
0.48
100.00
63.52
38.98
16.94
0.59
0.46
3.32
3.05
0.19
22.06
22.06
13.00
13.00
1.43
0.15
0.81
0.46
100.00
61.55
37.58
15.28
0.36
0.31
4.14
3.73
0.15
27.21
27.21
9.95
9.95
1.28
0.16
0.65
0.47
100.00
63.37
38.23
17.45
0.42
0.27
4.70
2.14
0.15
25.58
25.58
9.75
9.75
1.31
0.20
0.57
0.54
(%age share)
2008-09 2009-10
R
P
100.00
100.00
100.00
100.00
63.85
62.24
66.69
65.30
39.27
37.12
40.43
39.61
15.78
16.63
17.20
17.66
0.43
0.58
0.53
0.52
0.29
0.29
0.26
0.24
4.42
5.37
5.08
4.82
3.51
2.10
3.06
2.33
0.15
0.15
0.13
0.12
23.65
22.67
21.85
23.50
23.65
22.67
21.85
23.50
11.20
13.82
10.20
9.96
11.20
13.82
10.20
9.96
1.29
1.27
1.26
1.24
0.16
0.18
0.21
0.17
0.67
0.58
0.58
0.62
0.46
0.51
0.47
0.46
2006-07
2007-08
TABLE 2.8
CREDIT DISBURSED BY AGENCIES
(Rs million)
Fiscal
ZTBL
Taccavi
Domestic
PPCBL
Commercial
Total
Year
a
Private Banks
b
Banks
1990-91
8,324
56
..
3,017
3,518
14,915
1991-92
6,996
57
..
3,247
4,180
14,479
1992-93
8,643
51
..
2,978
4,526
16,198
1993-94
8,989
..
..
2,621
4,063
15,674
1994-95
14,576
..
..
3,757
4,041
22,373
1995-96
10,339
..
..
3,803
5,045
19,187
1996-97
11,687
..
..
3,431
4,429
19,548
1997-98
22,354
..
..
4,929
6,110
33,392
1998-99
30,176
..
..
5,440
7,236
42,852
1999-00
24,424
..
..
5,951
9,313
39,688
2000-01
27,610
..
..
5,124
12,056
44,790
2001-02
29,108
..
593
5,128
17,486
52,314
2002-03
29,270
..
1,421
5,485
22,739
58,915
2003-04
29,933
..
2,702
7,564
33,247
73,446
2004-05
37,409
..
12,407
7,607
51,310
108,733
2005-06
47,594
..
16,023
5,889
67,967
137,474
2006-07
56,473
..
23,976
7,988
80,393
168,830
2007-08
66,939
..
43,941
5,931
94,749
211,561
2008-09
75,139
..
41,626
5,579
110,666
233,010
2009-10 P
48,987
..
28,641
3,530
85,177
166,335
.. : not Available
Source : i) State Bank of Pakistan
b : Punjab Provincial Corporative Bank Ltd.
ii) Ministry of Food, Agriculture & Livestock
a : Zarai Taraqiate Bank Limited, formerly Agriculture Development Bank of Pakistan
TABLE 2.9
FERTILIZER OFFTAKE AND IMPORTS OF FERTILIZERS & PESTICIDES
Fiscal
N
Year
1990-91
1,472
1991-92
1,463
1992-93
1,635
1993-94
1,659
1994-95
1,738
1995-96
1,991
1996-97
1,985
1997-98
2,075
1998-99
2,097
1999-00
2,218
2000-01
2,264
2001-02
2,285
2002-03
2,349
2003-04
2,527
2004-05
2,796
2005-06
2,927
2006-07
2,650
2007-08
2,925
2008-09
3,035
2009-10 P
2,618
P : Provisional, (Jul-Mar)
Fertilizer off-take (000 N/Tonnes)

P
K
389
398
488
464
428
494
420
551
465
597
677
625
650
673
865
851
979
630
651
791
33
23
24
23
17
30
8
20
21
19
23
19
20
22
33
27
43
27
25
17
Total
1,893
1,884
2,148
2,147
2,183
2,515
2,413
2,646
2,583
2,834
2,966
2,929
3,020
3,222
3,694
3,804
3,672
3,581
3,711
3,426
Import of Insecticides
Import of
fertilizers
Quantity
Value
000 N/T
(Tonnes)
(Mln Rs)
685
13,030
1,489
632
15,258
1,946
759
14,435
1,731
903
12,100
1,706
261
21,776
2,978
581
30,479
5,081
878
30,856
5,272
714
29,225
4,801
885
31,893
5,515
663
26,124
4,692
580
21,255
3,477
626
31,783
5,320
766
22,242
3,441
764
41,406
7,157
785
41,561
8,281
1,268
33,954
6,804
796
29,089
5,848
876
27,814
6,330
568
28,839
8,981
968
27,995
8,741
Source: 1. Federal Bureau of Statistics.
2. National Fertilizer Development Centre.
TABLE 2.10
AVERAGE RETAIL SALE PRICE OF FERTILIZERS
Fiscal Year
Urea
(46% N)
195.0
195.0
205.0
210.1
235.0
267.0
340.0
341.0
346.0
327.0
363.0
394.0
411.0
420.0
468.0
509.0
527.0
581.0
751.0
782.0
AN/CAN
(26% N)
90.0
95.0
109.0
..
150.0
172.0
209.0
223.6
231.0
231.0
233.0
268.0
282.0
208.0
353.0
395.0
396.0
471.0
704.0
698.0
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10 P
.. : Not available
AN/CAN : Ammonium nitrate/calcium ammonium nitrate
ASN : Ammonium super nitrate
AS : Ammonium sulphate
NP : Nitrophosphate
AS
(21% N)
85.0
90.0
96.0
125.3
164.0
172.0
197.0
232.5
275.0
286.0
300.0
308.0
344.0
373.0
405.0
744.0
779.0
867.0
1,330.0
1,289.0
NP
(23:23)
173.0
173.0
196.0
202.6
250.0
320.0
384.0
396.6
457.0
464.0
468.0
519.0
539.0
622.0
704.0
710.0
670.0
1,267.0
1,700.0
1,358.0
(Rs per bag of 50 Kgs/110lbs)

SSP(G)
DAP
SOP
NPK
(18%)
(18:46)
(50% K)
(10:20:20)
93.0
249.0
150.0
176.0
93.0
272.0
150.0
176.0
93.0
264.0
195.0
247.0
95.8
269.0
195.0
247.0
150.0
379.0
195.0
247.0
183.0
479.0
331.0
..
211.0
553.0
532.0
..
200.0
564.6
540.0
..
234.0
665.0
541.0
..
298.0
649.0
543.0
..
253.0
670.0
682.0
..
280.0
710.0
765.0
..
287.0
765.0
780.0
..
329.0
913.0
809.0
..
373.0
1,001.0
996.0
..
407.0
1,079.0
1,170.0
..
334.0
993.0
985.0
..
572.0
1,934.0
1,497.0
..
874.0
2,578.0
2,091.0
..
720.0
2,144.0
2,297.0
..
National Fertilizer Dev. Centre
SSP: single super phosphate
DAP: Diammonium phosphate
SOP: Sulphate of potash
NPK: Nitrogen phosphate and potash
TABLE 2.11
AREA IRRIGATED BY DIFFERENT SOURCES
Fiscal Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10 P
P : Provisional
Canals
7.89
7.85
7.91
7.73
7.51
7.60
7.81
7.79
7.67
7.56
6.98
6.81
7.06
7.22
7.00
7.06
6.68
6.91
6.86
6.86
Wells
0.13
0.16
0.18
0.14
0.17
0.18
0.18
0.16
0.17
0.18
0.16
0.20
0.21
0.22
0.25
0.28
0.67
0.31
0.33
0.33
Canal
Wells
0.08
0.11
0.10
0.09
0.10
0.11
0.11
0.13
0.09
0.09
0.10
0.16
0.17
0.15
0.19
0.20
0.22
0.17
0.20
0.20
Tube wells
2.56
2.59
2.67
2.78
2.83
2.89
2.90
3.00
2.98
3.11
3.19
3.45
3.37
3.48
3.46
3.58
3.89
3.83
3.88
3.88
(Million hectares)
Canal
Tube wells
Others
Total
5.87
0.22
16.75
5.93
0.21
16.85
6.23
0.24
17.33
6.22
0.17
17.13
6.41
0.18
17.20
6.58
0.22
17.58
6.61
0.22
17.85
6.74
0.18
18.00
6.88
0.16
17.95
6.99
0.18
18.11
7.22
0.17
17.82
7.24
0.18
18.04
7.21
0.20
18.22
7.50
0.21
18.78
7.70
0.24
18.84
7.78
0.22
19.12
7.78
0.25
19.59
7.79
0.28
19.29
7.94
0.21
19.49
7.94
0.21
19.49
TABLE 2.12(A)
PROCUREMENT/SUPPORT PRICES OF AGRICULTURAL COMMODITIES
(Rs per 40 kg)
Fiscal
Year
Rice
Wheat
Basmati
385
283.00
308.00
340.00
360.00
389.00
419.80
461.78
..
..
..
..
..
..
..
..
..
..
..
..
..
Paddy
Basmati
Irri-6
385
(F.A.Q)
143.50
73.00
155.00
78.00
175.00
85.00
185.00
90.00
210.90
102.60
222.00
112.00
255.30
128.80
310.00
153.00
330.00
175.00
350.00
185.00
385.00
205.00
385.00
205.00
385.00
205.00
400.00
215.00
415.00
230.00
460.00
300.00
..
306.00
..
..
1250.00 @ 700.00
1000.00
600.00
Irri-6
(F.A.Q)
1990-91
112
127.00
1991-92
124
140.00
1992-93
130
150.00
1993-94
160
157.00
1994-95
160
170.00
1995-96
173
183.00
1996-97
240
210.45
1997-98
240
..
1998-99
240
..
1999-00
300
..
2000-01
300
..
2001-02
300
..
2002-03
300
..
2003-04
350
..
2004-05
400
..
2005-06
415
..
2006-07
425
..
2007-08
625
..
2008-09
950
..
2009-10 P
950
..
FAQ : Fair Average Quality
.. : Not applicable
@ : Price of Basmati Super (Paddy) Rs. 1500/40kg
* : Sugarcane prices has been fixed by the respective Provincial Government.
Khyber
Pakhtunkhwa
15.25
16.75
17.50
18.00
20.50
21.50
24.00
35.00
35.00
35.00
35.00
42.00
42.00
42.00
42.00
48.00
65.00
65.00*
80.00
100.00
Sugarcane
Punjab
Sindh
15.25
16.75
17.50
18.00
20.50
21.50
24.00
35.00
35.00
35.00
35.00
42.00*
42.00
42.00
42.00
45.00
60.00
60.00*
80.00
100.00
15.75
17.00
17.75
18.25
20.75
21.75
24.50
36.00
36.00
36.00
36.00
43.00
43.00
43.00
43.00
60.00
67.00
63.00
81.00
103.00
Baluchistan
..
17.00
17.50
18.25
20.75
21.75
24.50
36.00
36.00
36.00
36.00
43.00
43.00
43.00
43.00
..
..
..
..
..
(Contd.)
TABLE 2.12(B)
PROCUREMENT/SUPPORT PRICES OF AGRICULTURAL COMMODITIES
(Rs per 40 Kg)
Cotton Lint
Fiscal
Year
Desi
1990-91
550
1991-92
662
1992-93
695
1993-94
726
1994-95
795
1995-96
795
1996-97
..
1997-98
..
1998-99
..
1999-00
..
2000-01
..
2001-02
..
2002-03
..
2003-04
..
2004-05
..
2005-06
..
2006-07
..
2007-08
..
2008-09
..
2009-10 P
..
P : Provisional
.. : Not applicable
* : Niab-78, CIM
AC-134,
NT
615
685
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
B-557
149-F
645
715
770
801
986
986
..
..
..
..
..
..
..
..
..
..
..
..
..
..
Seed Cotton (Phutti)
*
*
*
*
Sarmast
Sarmast
QallanQallandri DeltaB-557
dri Deltapine MSAC-134,
F-149
pine MS39-40
Desi
NT
Niab-78
39-40
Potato Onion
690
220
235
245
260
55
52
745
255
270
280
290
65
60
800
275
..
300 *
310
67
65
831
290
..
315 *
325
77
78
1055
340
..
400 *
423
84
78
1055
340
..
400 *
423
84
85
..
440
..
500 *
540
115
100
..
440
..
500 *
620
145
112
..
..
..
825 *
..
145
140
..
..
..
725 *
..
145
..
..
..
..
725 *
..
145
..
..
..
..
780
..
..
..
..
..
..
800
..
..
..
..
..
..
850
..
..
..
..
..
..
925
..
..
..
..
..
..
975
..
..
..
..
..
..
1025
..
..
..
..
..
..
..
..
..
..
..
..
..
1465
..
..
..
..
..
..
..
..
..
..
Source: Ministry of Food and Agriculture, Agriculture Policy Institute (API)
TABLE 2.13
PROCUREMENT, RELEASES AND STOCKS OF WHEAT AND RICE
Wheat (May-April)
Releases
Fiscal
ProcureYear
ment
1990-91
3,159.0
5,608.0
1991-92
3,249.0
5,431.0
1992-93
4,120.0
5,143.0
1993-94
3,644.0
5,982.0
1994-95
3,740.0
5,999.0
1995-96
3,448.0
5,139.0
1996-97
2,725.0
5,987.0
1997-98
3,984.0
5,794.0
1998-99
4,070.0
6,165.0
1999-00
8,582.0
6,131.0
2000-01
4,081.0
5,537.0
2001-02
4,045.0
3,376.0
2002-03
3,514.0
5,130.0
2003-04
3,456.0
4,104.0
2004-05
3,939.0
4,500.0
2005-06
4,514.0
2,088.0
2006-07
4,422.0
5,985.4
2007-08
3,917.0
6,357.9
2008-09
9,231.0
5,784.4
2009-10 P
4,788.1 @
5,984.7
.. : not available
P : Provisional
* : as on 1st May, 2010
@ : upto 10th May 2010 (2009-10 Crop)
Rice Procured
Basmati
Others
Stocks
1,508.0
1,000.0
505.0
1,007.0
776.0
385.0
456.0
902.0
981.0
702.0
3,552.0
3,683.0
992.0
161.0
350.0
2,107.0
499.1
136.9
821.9
4,223.0
142.7
121.6
500.5
144.9
284.0
50.8
..
..
..
..
..
..
..
..
..
..
..
..
..
..
(000 tonnes)
Stocks Balance (on 1st July)
Basmati
Others
673.8
719.3
117.5
370.3
486.8
314.7
454.0
285.2
540.5
681.4
224.8
541.2
..
236.4
848.5
154.6
494.3
117.7
..
159.4
187.9
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
TABLE 2.14
LIVESTOCK POPULATION
(million numbers)
Fiscal Year
Buffaloes
Cattle
Goats
Sheep
Poultry
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06 *
2006-07 @
2007-08
2008-09
2009-10
17.8
18.3
18.7
19.2
19.7
20.3
20.8
21.4
22.0
22.7
23.3
24.0
24.8
25.5
26.3
27.3
28.2
29.0
29.9
30.8
17.7
17.7
17.8
17.8
17.8
20.4
20.8
21.2
21.6
22.0
22.4
22.8
23.3
23.8
24.2
29.6
30.7
31.8
33.0
34.3
37.0
38.7
40.2
42.0
43.8
41.2
42.6
44.2
45.8
47.4
49.1
50.9
52.8
54.7
56.7
53.8
55.2
56.7
58.3
59.9
26.3
27.4
27.7
28.3
29.1
23.5
23.7
23.8
23.9
24.1
24.2
24.4
24.6
24.7
24.9
26.5
26.8
27.1
27.4
27.8
146.9
156.2
182.6
250.0
318.8
350.0
382.0
276.0
278.0
282.0
292.4
330.0
346.1
352.6
372.0
433.8
477.0
518.0
562.0
610.0
Camels
Asses
Horses
Mules
1.1
3.5
0.4
0.1
1.1
3.8
0.5
0.1
1.1
3.8
0.4
0.1
1.1
3.9
0.4
0.1
1.1
4.0
0.4
0.1
0.8
3.6
0.3
0.1
0.8
3.6
0.3
0.1
0.8
3.2
0.3
0.1
0.8
3.8
0.3
0.1
0.8
3.8
0.3
0.2
0.8
3.9
0.3
0.2
0.8
3.9
0.3
0.2
0.8
4.1
0.3
0.2
0.7
4.1
0.3
0.2
0.7
4.2
0.3
0.3
0.9
4.3
0.3
0.2
0.9
4.3
0.3
0.2
1.0
4.4
0.3
0.2
1.0
4.5
0.4
0.2
1.0
4.6
0.4
0.2
Source: Ministry of Livestock & Dairy Development.
* : Population figures are actual figures of Livestock Census 2006

@ : From 2006-07 onward figures estimates are based on Inter census growth rate of livestock census 1996 & 2006
TABLE 2.15
LIVESTOCK PRODUCTS
Fiscal
Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06 *
2006-07 @
2007-08
2008-09
2009-10
Milk #
Beef
15481
16280
17120
18006
18986
22970
23580
24215
24876
25566
26284
27031
27811
28624
29438
31970
32996
34064
35160
36299
765
803
844
887
931
898
919
940
963
986
1010
1034
1060
1087
1115
1449
1498
1549
1601
1655
Mutton Poultry
Meat
665
151
713
169
763
265
817
296
875
308
587
355
602
387
617
284
633
310
649
322
666
339
683
355
702
370
720
378
739
384
554
512
566
554
578
601
590
652
603
707
Wool
Hair
Bones
48.1
49.3
50.5
51.7
53.1
38.1
38.3
38.5
38.7
38.9
39.2
39.4
39.7
39.9
40.0
40.1
40.6
41.0
41.5
42.0
7.9
8.3
8.1
9.0
9.4
15.6
16.2
16.7
17.3
17.9
18.6
19.3
19.9
20.7
20.7
20.3
20.8
21.4
22.0
22.6
259.0
265.0
271.0
277.0
283.0
295.7
302.3
309.2
316.3
324.0
331.4
339.4
347.6
356.2
365.1
633.5
652.5
672.2
692.4
713.4
Fat
Blood
Eggs
(000 tonnes)
Hides
Skins
(Mln.Nos.)
(Mln.Nos.) (Mln.Nos.)
101.8
40.1
4490
5.9
32.7
104.5
42.5
4914
6.0
33.9
107.2
45.1
5164
6.1
36.0
110.0
47.3
5740
6.2
37.8
113.0
50.7
5927
6.3
39.3
110.1
32.0
5757
7.0
32.7
112.6
32.8
6015
7.1
34.5
115.2
33.6
5737
7.3
35.3
117.8
34.4
8261
7.5
36.3
120.6
40.9
7321
7.6
37.2
123.5
41.8
7505
7.8
38.2
126.5
42.9
7679
7.9
39.2
129.7
44.0
7860
8.2
40.3
132.9
45.2
8102
8.4
42.4
136.3
45.2
8529
8.4
42.6
203.3
51.4
9712
11.4
43.3
209.2
52.7
10197
11.8
44.3
215.3
54.1
10711
12.2
45.3
221.6
55.4
11258
12.6
46.3
228.1
56.8
11839
13.0
47.4
Source: Ministry of Livestock & Dairy Development.
* : Population figures are actual figures of Livestock Census 2006

# : Human Consumption
@ : From 2006-07 onward figures estimates are based on Inter census growth rate of livestock census 1996 & 2006
Manufacturing
Manufacturingisthethirdlargestsectoroftheeconomy,accountingfor18.5percentofGrossDomestic
Product(GDP),and13percentoftotalemployment(seeTable3.1).LargeScaleManufacturing(LSM),at
12.2percentofGDP,dominatestheoverallsector,accountingfor66%ofthesectoralshare,followedby
Small Scale Manufacturing, which accounts for 4.9 percent of total GDP. The third component of the
sectorisSlaughtering,whichwasseparatelyincludedasasubcategoryfrom200304,andaccountsfor
1.4percentofoverallGDP.
Table3.1:ShareofManufacturing
Manufacturingas%of:
GDP
Employment
FixedInvestment
2000
14.7
11.5
23.0
2005
18.3
13.6
22.0
2010
18.5
13.0
16.2
WhatisevidentfromTable3.1isthat,whileManufacturingsshareofoverallGDPhasincreasedsince
2000,itsshareintheeconomy hasdeclinedsince 2005intermsofallthreeindicators used:shareof
GDP, employment, and new fixed investment. This contrasts with the experience of most better
performing countries in the region, such as Bangladesh, Sri Lanka, Vietnam and Cambodia, where the
manufacturingsectorhas expandedfairlyrapidly, despite thepresenceofotherfastgrowing dynamic
sectorsintheeconomy(Table3.2).
Table3.2:Manufacturingsectorinregionalcountries
As%ofGDP
Thailand
China
Malaysia
Indonesia
Vietnam
Cambodia
Pakistan
Bangladesh
India
1995
30
34
26
24
15
10
16
15
18
2007
35
32
28
27
21
19
19
18
16
Source:WorldBank
As a consequence, the absorption of employment in Manufacturing has also remained fairly stable at
around 13% during this period. More worrying for the future prospects of the sector, the share of
Manufacturing in new fixed investment has declined sharply, from 22% to 16.2%. This worrying
development,whichappearstobeasecular(i.e.longterm)trend,needstobeexaminedcarefullyand
itsunderlyingfactorsaddressed.Alargepartoftheproblemwithregardstothelossofdynamisminthis
oncevibrantsectorrelatestotheincentivesframeworkinplace,whichhasbeenexploredinthechapter
onGrowthandInvestment.
Pervasivemisdeclarationandunderinvoicingofimports,whichaccordingtosomeestimatescoststhe
39
economyanywherebetweenRs100billiontoRs300billioninlostrevenuealone,inconjunctionwith
the rampant misuse of the Afghan Transit Trade (ATT) facility, has undermined the viability and
competitivenessoftheManufacturingsector.Recentdevelopmentsonthisfront,withthewindingup
ofthePakistanAutomatedCustomsClearanceSystem(PACCs)byFBR,doesnotbodewellforreducing
leakagesonaccountofweakadministrationofCustoms.
Someoftheotherareaswherethedomesticmanufacturingsectorhasbeenseriouslydisadvantagedin
comparison to imports include reliance on an overvalued exchange rate as an instrument of policy,
especially between 2004 and 2007. This led to a rapid increase in cheap imports, including finished
goods,whichundercutthedomesticmanufacturingsector.TheFreeTradeAgreement(FTA)withChina
since 2007 is unlikely to have helped the domestic manufacturing sector, given Chinas global
dominance of manufactured products, especially in the low value added segment. Not surprisingly,
Pakistans formal imports from China shot up from US$ 2,011 million in 2006, to US$ 3,030 million in
2008.
As has already been discussed in the chapter on Growth and Investment, weaknesses in the taxation
system,especiallyintermsofpolicydesign,havesetperverseincentivesforformalityandhence,scale.
Other costadvantagestobeingarelativelysmaller,informalplayerintheeconomyarenotcaptured.
Theseincludesavingsaccruingviatheeliminationoftheregulatoryburden(audits,inspections,filings,
registration costs etc), as well as making lower payments in gaining utility connections through
informalchannels.
The loss of scale induced by the taxation and regulatory system has seriously eroded the
competitivenessoftheLargeScaleManufacturing(LSM)sector,inparticular.Anunstableanduncertain
domestic environment has proved to be an added factor in burdening the manufacturing sector. A
deterioratinginternalsecuritysituation,cripplingenergyshortages,andonoffpoliticaluncertaintysince
2007havecombinedwithaperiodofnecessaryadjustmentintheeconomysince2008whichhasseena
sharpincreaseinadministeredprices,especiallyforenergy.
Recentperformance
Setinthisdifficultmediumtermcontext,theManufacturingsectorhasperformedwellintheoutgoingyear,
withoverallvalue additionrising 5.2% in the first nine months ofthe fiscal year. Production in LargeScale
Manufacturing (LSM) rose by 4.4 percent during July to March, against the full year target of 1.8%, and
comparedtoacontractionof7.7percentinthesameperiodoflastyear(Table3.3andFig3.2).
Fig3.1:MonthlyGrowthRateofLSM
15
GrowthRate
10
5
0
5
10
15
20
25
40
Manufacturing
OutputgrowthinLSMcontracted8.2%forthewholeof200809.Acombinationofadeterioratinglaw
andordersituation,massivepowershortages,alargedepreciationinthevalueoftheRupeeagainstthe
USdollarwhichincreasedrawmaterialcosts,andtheimpactonexternaldemandforPakistansexports
caused by one of the deepest contractions in global output and trade in the past 70 years, all
contributedtotheslowdowninmanufacturing.
However,afterrecordingthirteenmonthsofcontractiononayearonyearbasis,outputgrowthinthe
LSM sector finally turned positive from August 2009 onwards. The turnaround has been led by the
consumer discretionary sector, with production growth of high double digits in autos and allied
products, and in electronic goods. Pharmaceuticals, leather goods, and fertilizer also contributed to
overallLSMgrowth.
DespitestrongerexportorderbooksforsomesegmentsofthetextileindustryfromaroundNovember
lastyear,especiallyforcottonyarn,reportedoutputgrowthforTextilesasawholeremainedmarginally
negative at 1.8% for July to March. However, there is a trend of improvement in this sector, and if
externaldemandforexportsremainsstronginthemonthsahead,theoverallLSMsectormaybenefit
further.
3.1GroupwiseperformanceofLargeScaleManufacturing
MorethanhalfofthesubgroupswithinLargeScaleManufacturing(LSM)depictedimprovementfrom
the previous year, with industries producing consumer and intermediate goods being the main
beneficiaries. The main contributors to LSM growth were: Automobiles, followed by Tyres & Tubes,
Leather Products, Electronics, Fertilizers, NonMetallic Minerals Products, Pharmaceuticals, and
EngineeringProducts.
Production of automobiles increased by 31.6 %. Within the group, a major increase was seen in the
production of motorcycles (58.2%), jeeps & cars (37%), tractors (27%), buses and trucks (16.2%). The
increaseof29.5%inrubberproductswasduetoincreaseinproductionofmotortyresandtubesat23%
and 50% respectively. The production of electronic items increased by 23%. Major items showing
increaseinoutputunderthisheadincludedairconditioners(59%),deepfreezers(36%)andrefrigerators
(17 %). Engineering products witnessed an increase in output of 6%. Major items showing increase in
productionincludesugarcanemachines,wheatthreshersandproductionofdieselengines.
However,afewimportantgroupsoflargescalemanufacturinghavedepictedanegativegrowthratefor
July to March. This group includes steel products (26.9%), petroleum products (5.9%), followed by
sugar(3.5%),paper&paperboard(2.9%),textiles(0.5%)andchemicals(0.2%).
CategorizationofGroupsinmanufacturingsector
by point contribution indicates highest increase
of 1.3 percentage points by the Automobile
group to the overall increase in manufacturing
sector, followed by Electronics group (0.6
percent), and Leather products group (0.5
percentagepoint).Thehighestnegativetrendin
termofpointcontributionhasbeenseeninfood
group 0.5 percent point, textile group 0.4
percentpointandpetroleumgroup0.3percent
point.
Among the major factors behind the negative
growthrateinironandsteelproductswere,the
Fig3.2:LSMgrowthrate(Annualbasis)
20
18.8
15
9.2
10
8.8
4.4
4.1
5
0
8.2
5
10
200405
200506
200607
200708
200809
Source:FBS
200910
(JulMar)
41
impactofthefinancialcrunchinPakistanSteelMills(PSM)asaresultofhugelossesitincurredlastyear.
Asaresult,PSMhasnotbeenabletoarrangeimportofbasicrawmaterials,ironoresandcoal,asperits
requirement.TheFood,BeverageandTobaccogroupwasseverelyhitbylowproductionofbeverages,a
smaller sugarcane harvest in the country, which led to lower production of sugar. Production of
cigarettesalsodeclinedsubstantiallyduringthecurrentfinancialyear.
The production activity of petroleum was negatively effected by the circular debt issue. Strained
cashflowconstrainedthefulloperationofrefineries,withadeclineinthevolumeofimportofcrudeoil.
Asaresult,refinedpetroleumproductswereimportedtofulfilldomesticrequirements.
Table3.3:GroupwisegrowthandpointcontributionrateofLSMforthemonthof
JulMar200910vsJulyMar200809
(% Change)
%PointContribution
S.No. Groups
Weights
JulyMarch
JulyMarch
200809
200910 200809
200910
1
Textile&Apparel
26.408
0.7
1.78
0.18
0.47
2
Food,Beverage&Tobacco
14.352
10.5
3.54
1.51
0.51
3
PetroleumGroup
5.232
9.2
5.90
0.48
0.31
4
Pharmaceutical
5.030
0.9
7.39
0.05
0.37
5
NonMetallicMineralsProducts
4.192
4.8
10.91
0.20
0.46
6
Automobile
3.955
39.0
31.58
1.54
1.25
7
Fertilizers
3.383
21.5
10.88
0.73
0.37
8
Chemicals
2.884
3.8
0.21
0.11
0.01
9
Electronic
2.485
31.3
23.16
0.78
0.58
10
LeatherProducts
2.272
2.9
23.60
0.07
0.54
11
Paper&PaperBoard
0.600
0.8
2.89
0.00
0.02
12
EngineeringProducts
0.446
0.8
6.01
0.00
0.03
13
Tyres&Tubes
0.303
1.8
29.54
0.01
0.09
AllGroups
75.075
7.7
4.36
5.78
3.27
Item wise review of production of selected items of large scale manufacturing during the current
financialyearof200910(JulyMarch)overthesameperiodoflastyearisshowninTable3.4.
Table3.4:ProductionofselecteditemsofLargeScale Manufacturing
(JulyMarch)
S.No.
1
2
3
4
5
6
7
8
9
10
11
42
Items
DeepFreezers
Jeep&Cars
Refrigerators
UpperLeather
Cement
Liquids/Syrups
Phosphaticfertilizer
Tablets
Cookingoil
Cotton(Ginned)
Nitrogenousfertilizer
Unit
(000tonnes)
(Nos.)
(000tonnes)
(000sq.m.)
(000tones)
(MilionLiters)
(000Ntonnes)
(MilionNos)
(000tonnes)
(000tonnes)
(000Ntonnes)
Weight 200809
0.399
93.394
2.534
63.984
0.589
605.347
1.117
14.698
4.141
20.469
1.525
52.111
1.885
322.46
2.575
14169.17
1.319
196.497
3.368
1508
1.498
1810.237
200910
126.635
87.419
707.884
17.238
22.763
57.401
367.164
15491.38
210.577
1595
1869.178
%Change
%Point
(JulMar)
Contribution
200910 (JulMar)200910
35.59
0.14
36.63
0.93
16.94
0.10
17.28
0.19
11.21
0.46
10.15
0.15
13.86
0.26
9.33
0.24
7.17
0.09
5.77
0.19
3.26
0.05
Manufacturing
Table3.4:ProductionofselecteditemsofLargeScale Manufacturing
%Change
%Point
(JulMar)
Contribution
200910 200910 (JulMar)200910
761.95
0.14
0.01
778.493
2.49
0.11
2159.17
1.76
0.23
3077.866
3.47
0.14
48.628
3.01
0.01
8784.245
5.9
0.31
49.51
10.99
0.34
263.361
20.13
0.29
388.668
39.36
0.63
(JulyMarch)
S.No.
12
13
14
15
16
17
18
19
20
Items
CottonCloth
VegetableGhee
CottonYarn
Sugar
TeaBlended
Petroleumproducts
Cigarettes
Coke
Pigiron
Unit
(Millionsq.m.
(000tonnes)
(MilionKg.)
(000tonnes)
(000tonnes)
(MilionLiters)
(BillionNos.)
(000tonnes)
(000tonnes)
Weight 200809
7.549
760.888
4.242
798.339
13.066 2197.876
4.15
3188.561
0.319
50.135
5.323
9335.367
3.055
55.625
1.441
329.726
1.613
640.893
The major contribution to overall LSM growth for the year has come from the automobile sector (0.9
percentage point), cement (0.5 percentage point) with fertilizer, cotton and leather each contributing
0.2percentagepointtotheoverallincreaseinmanufacturing.Thecontributionofthefollowingitems
was significantly negative: pig iron, cotton yarn, cigarettes, sugar, vegetable ghee, tea and petroleum
productsduringthecourseofyear.
3.2TextileIndustry
Pakistanistheworlds4thlargestproducerand3rdlargestconsumerofcotton.TheTextileandClothing
Industry has been the main driver of the economy for the last 50 years in terms of foreign currency
earningsandjobscreation.TheTextileandClothingIndustrywillcontinuetobeanimportantenginefor
futuregrowthoftheeconomy;thereisnoalternativeindustryorservicesectorthathasthepotentialto
benefit the economy with foreign currency earnings and new job creation, especially if synergy is
developed amongst different subsectors and efforts are made to aggressively grow the ReadyMade
ClothingSector.PakistansTextileIndustryhadproveditsstrengthinglobalmarketduringthelastfour
decades.Ithasproveditsstrengtheveninpostquotaerabynotonlysustainingitspositionbut,also
showinggrowthduring2005to2007,butdeclinedto$11.1billionin2008duetofinancialandeconomic
meltdown globally. The Garment Sector & especially the Knit Garment Sector need special focus in
futurepolicies.
Table3.5:ExportofTextileandClothing(Us$millions)
1990
2000
2004
WorldTextile
104,354
157,295
195,541
WorldClothing
108,129
197,722
260,569
Total
212,483
355,017
456,110
PakistanTextile
2,663
4,532
6,125
PakistanClothing
1,014
2,144
3,026
Total
3,677
6,676
9,151
%AgeofWorldTrade
1.73%
1.88%
2.01%
2005
202,657
276,802
479,479
7,087
3,604
10,691
2.23%
2006
220,367
309,142
529,509
7,469
3,907
11,376
2.15%
2007
2008
240,364
250,198
345,830
361,888
586,194
613,086
7,371
7,186
3,806
3,906
11,177
11,092
1.91%
1.81%
Source:MinistryofTextile
43
Globaldevelopments:
TheTextile&Clothingtradehasincreased,fromUS$212Billionin1990toUS$612.1Billionin2008.
Theclothingtradeisgrowingatafasterrate.Pakistanexportedtextilesworth$7.19Billionandclothing
worth$3.9Billionin2008.Theyear2009wasdismalperiod.Theindustrywasconfrontedwithproblems
of multiple natures. The global economic crisis in Oct. 2007 had impacted the trade badly. Weaker
demandinthedevelopedeconomieslimitedtheexpansionofglobaltrade.The12%dropinthevolume
of world trade in 2009 was larger than most economists had predicted. World trade and output are
currentlyinarecoveryphase.TheWTOSecretariatestimatesthatinyear2010worldexportsinvolume
terms will grow by 9.5%, developed economies exports will expand 7.5% and the rest of the world
(developingeconomiesplustheCommonwealthofIndependentStates)willadvance11%.Thedeclinein
exportsofallmanufacturedgoodsincludingTextile&Clothingisvisibleinthequarterlydata.
Table3.6:Quarterlygrowthinworldtradeinmanufacturesbyproduct,2008 Q1 2009Q3
(YoYpercentagechangeincurrentUSdollars)
2008Q1
2008 Q2
2008 Q3
2008 Q4
2009 Q1
2009Q2
2009 Q3
Manufactures(All)
15.7
18.6
13.2
10.4
27.6
29.8
21.5
Textiles
10.3
8.9
3.4
12.8
26.9
26.8
17.3
Clothing
10.3
11.4
7.9
2.5
10.4
15.5
12.1
Source:WorldTradeOrganization
USimportsoftextilesandclothingfellforthesecondyearinsuccessionin2009,by7.5%to46.6billion
squaremetersequivalent(sme),followinga5.2%dropin2008whichwasthefirstdeclinesince2001.
Within the 2009 total, fabric imports fell by 5.4%, imports of apparel by 6.1%, imports of madeup
textilesby8.5%andyarnimportsby18.4%.Ofthesefourcategories,apparelcontinuedtoaccountfor
thehighestshareoftotalimports.TheaveragepriceofUStextileandclothingimportsfellforthefirst
timeinthreeyearsin2009,toanewlowofUS$1.74persme.
TheperiodofheavyinvestmentboominmostTextileIndustrysegmentsbetween2003and2007came
to an abrupt end in 2008. This investment boom until 2007 was due to the phase out of traditional
quota regime under WTO Agreement on Textile and clothing and Chinas integration into WTO
structures. Global yarn and fabric productions were continuously falling since the second quarter of
2008.Whileonewasexpectingstablalizationinproductionandhopingforaslightincrease,thestrong
reboundinyarnandfabricproductioninalmostalltheregionscameasarealsurprise.Thereasonsfor
this strong rebound are higher production in Asia and South America, driven by a large demand from
EuropeandChinaandBrazil.TodaythebigquestioniswhethertherecentrecoveryinTextileIndustry
will continue? One can be pragmatic to identify the positive moves in Textile Trade. Firstly the
productionofyarnandfabricareconstantlyonriseinAsia(China,PakistanandIndia)aswellasinSouth
America. This positive trend is supported by global exports of clothing. After having fallen from more
than$30billionpermonthtoonlyaround$20billioninMay2009,anupswingofglobalclothingexport
ofapproximately20percenttoalmost$25billionwasrecordedinJune2009.Despitechallenges,there
arefundamentalaspectsthatpromiseabrightfutureforthetextileindustryingeneral.
DomesticOverview:
Internallytheincreaseincostofutilities,(Power,Gas,Transport,andPetrol)hasimpactedviability.The
power&gasoutageshavefurtherdeterioratedcapacityutilization.TheshortageofcottoncropinChina
increasedthepricesofcotton.Theincreaseddemandofyarnexportcreatedproblemofyarnavailability
in the local market. The increase of cotton yarn and cotton yarn prices for exporters of Garments,
44
Manufacturing
Knitwear,HomeTextileandmadeupsectorstounviablelevelaggravatedtheproductionandexportof
yarnproducts.Tostayinthemarketindustryismakingdistressefforts.Closure,lowcapacityutilization,
lossesareheatedtopicsoftheday.ResultantlytheproductionandexportperformanceofTextilesector
hadshownamixedtrend.
Becauseofaglobalshortageinavailabilityofcotton,largelyduetoashortfallinChinesecrop,whichis
the biggest producer and consumer of cotton in the world, the foreign demand for Pakistans cotton
yarnhasrisenexceptionally.Chinese,inparticular,haveprocuredhugequantitiesofyarnfromPakistan,
eventhoughtheyarethefiercestcompetitorofPakistanintheworldmarket.Inthefirstsixmonthsof
the currentfiscalyearJulDec.2009,theexportofcottonyarnrecordedanincreaseof50%.Spinning
industrymakesthebasicrawmaterialforthedownstreamindustry.Theexistingcapacityinthespinning
sectorismorethanlocaldemand,andhencemoderatequantitiesofyarnareexportedeachyear.With
excessive exports during the year, the downstream industry started facing severe shortages of yarn.
Consequently,thedownstreamindustrybegantoclosedown.InJanuary,2010Governmentimposeda
quotaof50millionkgpermonthforexportofyarn.DuringJanuary2010,56millionkgwasexportedas
appropriatemeasurestogiveeffecttoquotawerenotputinplaceintime.Theavailabilityofyarninthe
localmarketremainedscantandpriceskeptrising.Theanxietyandpainsufferedbythelocalindustry
intensified,asexportsofvalueaddedtextilesweredecliningatalarmingrates(Decreasein:Cloth16%,
knitwear 8% and garments 8%). Accordingly, the quota was reduced to 35 million kg per month with
effect from 1st March, 2010.Since the reduction in quota, local availability has improved. Textiles are
exported in the form of Yarn, Fabric, Readymade Garments, and Bed Wear & Made Ups. Export
performancefortheperiod200809(JulMar)to200910(JulMar)iscomparedintable3.7
Table3.7:ExportperformanceofTextileIndustry
Quantity(JulyMar)
S.# Items
1
2
3
4
5
6
7
8
9
10
11
12
13
RawCotton
Cottonyarn
CottonCloth
CottonCardedor
Combed
YarnotherCotton
yarn
Knitwear
BedWear
Towels
Tents,Canvas&
Tarulin
Readymade
Garments
Art,Silk&
Synth.Textile
MadeupArticles
OtherTextile
Materials
Unit
Value(JulyMar)
%Change
Value
200809
200910
MT
MT
TH.SQM
72,636
379,597
1,496,972
157,962
500,130
1,256,944
117.47
31.75
16.03
MT
14,374
8,628
MT
7,140
TH.DOZ
MT
MT
%Change
200809
200910
$Million
$Million
$Million
79.903
830.677
1,509.645
19.3037
1,071.243
1,307.083
141.59
28.96
13.42
39.97
$Million
16.062
9.017
43.86
13,203
84.92
$Million
18.342
37.129
102.43
81,224
238,526
124,539
74,711
243,099
155,663
8.02
1.92
24.99
$Million
$Million
$Million
1,315.843
1,275.821
473.114
1,290.315
1,257.363
491.097
1.94
1.45
3.80
MT
16,984
17,088
0.61
$Million
47.571
48.940
2.88
TH.DOZ
22,129
20,336
8.10
$Million
914.583
953.114
4.21
TH.SQM
222,546
336,337
51.13
$Million
190.024
333.814
75.67
$Million
358.703
393.868.0
9.80
$Million
160.258
211.225
31.80
Source:FederalBureauStatistics
As depicted in table 3.5, the import of textile machinery has been showing decreasing trend in a row
since200405.Duringtheperiodunderreview,theimportoftextilemachinerywitnessedagrowthrate
of14.2percentagainstthesameperiodoflastyear.
45
Table3.8:ImportofTextileMachinery
Year
200405
200506
200607
200708
200809
928.6
817.24
502.89
438.27
212.0
($million)
JulyMarch
%Change
200809
200910
171.2
195.4
14.2
3.21AncillaryTextileIndustry:
This topic includes cotton spinning, cotton cloth, cotton yarn, cotton fabric, fabric processing, home
textiles,towels,hosieryandknitwearandreadymadegarments.Thesecomponentsarebeingproduced
bothinthelargescaleorganizedsectoraswellasinunorganizedcottage/small&mediumunits.The
performanceofthesevariousancillarytextileindustriesisevaluatedbelow.
i)CottonSpinningSector.
The Spinning Sector is the most important segment in the hierarchy of textile production. At
present, it is comprised of 521 textile units (50 composite units and 471 spinning units) with
10.1 Million spindles and 114 thousand rotors in operation with capacity utilization of 89
percentand60percentrespectively,duringJulyMarch,200809.
ii)ClothSector
ThepatternofClothProductionisdifferentthanspinningsector.Therearethreedifferentsub
sectorsinweavingviz,Integrated,IndependentWeavingUnits,andPowerLoomUnits.Thereis
Investment in the shuttleless looms both in integrated and independent weaving sector. This
trend is likely to intensify in the country. The Power Loom Sector have modernized and
registeredaphenomenalgrowthoverthelasttwodecades.Thegrowthofpowerloomsectoris
due to favorable Government Policies as well as Market forces. This sector is producing
comparatively low value added Grey Cloth of mostly inferior quality. Problems of the power
loom sector revolve mainly around the poor technology, scarcity of quality yarn and lack of
institutional financing for its development from unorganized sector to an organized one. The
productionofclothsectorhasshowninfollowingtable.
Table3.9:SectorwiseProduction
Production(M.Sq.Mtrs.)
(JulyMar) 20082009
MillSector
763.383
NonMillSector
5895.454
Total
6658.837
(JulyMar) 20092010
%AgeChange
762.420
0.13
5886.393
0.15
6648.813
0.15
iii)TextileMadeUpSector
This is the most dynamic segment of Textile Industry. The major product groups are Towels,
Tents & Canvas, Cotton Bags, BedWear, and Hosiery & Knitwear & Readymade Garments
includingFashionApparels.Table3.4 comparesexportperformanceofmadeupsectorduring
theperiodJulymarch20082009and20092010.
a)HosieryIndustry
There are about 12,000 Knitting Machines spread all over the country. The Capacity utilization is
approx 70%. There is greater reliance on the development of this industry as there is substantial
46
Manufacturing
value addition in the form of knitwear. Besides locally manufactured machinery, liberal import of
machinery under different modes is also being made and the capacity based on exports is being
developed.
b)ReadymadeGarmentIndustry
TheGarmentIndustryprovideshighestvalueadditioninTextileSector.TheIndustryisdistributedin
small, medium and large scale units most of them having 50 machines and below, large units are
nowcomingupintheorganizedsectoroftheindustry.Theindustryenjoysthefacilitiesofdutyfree
import of machinery and Income Tax exemption. This sector has tremendous potential. Exports
remainedunderpressure.TheexportperformanceofReadymadeGarmentshasbeencomparedin
table3.4.
c)TowelIndustry
Thereareabout7500TowelLoomsinthecountryinbothorganizedandunorganizedsector.This
Industryisdominantlyexportbasedanditsgrowthhasallthetimedependedonexportoutlets.The
existing towels manufacturing factories are required to be geared up to produce higher value
towels.
d)Canvas
Thisisthehighestrawcottonconsumingsector.Theproductioncapacityismorethan100million
Sq.Meters.Thisvalueaddedsectorhasalsogreatpotentialforexport.The60%ofitsproductionis
exported while 40% is consumed locally by Armed Forces, Food Department. Pakistan is the
cheapestsourceofsupplyofTentsandCanvas.TheExportperformanceofTent&CanvasIndustry
hasbeendepictedintable3.4.
iv)SyntheticFiberManufacturingSector
ThissectorhasmadeprogressinlinewithdemandoftheTextileIndustry.Presentlythereare
Five(5)PolyesterFiberUnitswithproductionCapacityof640000Tonsperannum;oneacrylic
fiberunit(M/s.DewanSalman)hasstarteditscommercialproductioninDecember1999,with
ratedcapacityof25,000Tonsperannum.BesidesimportofM.M.yarn,Fibersispermissibleto
supplementthelocalproduction.
v)FilamentYarnManufacturingIndustry
TheSyntheticfilamentyarnmanufacturingindustrypickedupmomentumduring5thFiveYear
Plan when demand raised and hence imports increased and private sector was permitted to
make feasible investment in the rising market conditions. Today following three kinds of
filamentyarnaremanufacturedlocally:
Table3.10:CapacityofSyntheticFilamentYarn
S.#
TypeofYarn
1.
AcetateRayonYarn
2.
PolyesterFilamentYarn
3
NylonFilamentYarn
NoofUnits
1
21
3
Total
ProductionCapacity
3000(M.Tonnes)
105376(M.Tonnes)
2000(MTonnes)
10,000(M.Tonnes)
47
Thepolyesterfilamentyarnmanufacturingactivityhassloweddownandcurrentlyalargescale
importsfromChinahascompelledlocalindustrytoclosedownandonly6unitswithoperational
capacityof55851M.Tonssupplypolyesterfilamentyarn.Thelocalproductionfilamentfabrics
isnotpickingupastheirexportssalesarenotfeasibleandlocalmarketisheavilyfloodedwith
smuggledgoods.TheProductionofPolyesterFilamentYarnisapprox.60,337Tonsperannum
andimportsduringtheperiodJulyMarch2010is116,964M.Tonsasagainst89,362M.Tons
duringJulyMarch2009.Governmentinthelastyearreducedindutyonfilamentyarn.Whileit
washelpfultotheSyntheticWeavingUnits,itsimpactontheFilamentindustryisevidentinthe
formofclosureof15units.RecentlyHosierysectorhasstarted consumingsyntheticyarnsfor
exportofKnittedGarmentswhicharebothvalueaddedaswellasdiversificationinproduct.
vi)ArtSilkandSyntheticWeavingIndustry
ArtSilkandSyntheticWeavingIndustryhasdevelopedoverthetimeoncottagebasedPower
LoomsUnitscomprisingof0810loomsspreadalloverthecountry.Thereareapproximately
90,000 looms in operation of which 30,000 looms are working on blended yarn and 60,000
loomsonfilamentyarn.Besides,therearesomemobileloomswhichbecomeoperationalon
marketdemand.ThemajorconcentrationisinKarachiFaisalabad,Gujranwala,JalalpurJattan
aswellasintheunsettledarea(BaraSawatKhyberAgencyandWazirstan).
vii)WoolenIndustry
The main products manufactured by the Woolen Industry are Woolen Yarn of 6.864 M.kgs,
Acrylic yarn 6.960 M.kgs, Fabrics 3,445 (M.sq.meter), Shawls 13.353 Million, Blanket 657,235,
and Carpet 3.5 (M.Sq.meter) and exports of carpet during the period July to Feb 08 is as
under::
viii)JuteIndustry
Themainproductsmanufacturedbyjuteindustriesarejutesakesandhessiancloth,whichare
usedforpackingandhandlingofwheat,riceandfoodgrains.Theproductionofjutegoodsfor
theperiodofJulMar,200809andJulMar,200910was92,666metrictonesand98,753metric
tonesrespectively,depictinganincreaseof6.6percent.
3.3OtherIndustries
Although, Pakistan is a large exporter of cotton and textile related products in the world market.
However,thisisnotonlypartofmanufacturinginthecountrywhichisgrowing.Duringthelastcouple
of years Pakistan has made huge strides in other industries as well. Some of these are documented
below:
3.31EngineeringDevelopmentBoard
EngineeringDevelopmentBoard(EDB)overtheyearshasworkedasabridgebetweentheGovernment
and Engineering Sector of the country through consultative process which involves interaction with
severalprivatesectorstakeholders/organizationthroughformulationofcommitteesheadedbyprivate
sectorrepresentatives.Duringthecurrentfinancialyear,EngineeringDevelopmentBoardhasinitiated
thefollowingpolicymeasures.
x To narrow the widening demand/supply gap in steel sector, utilization of indigenous raw
materialsiron ore & coal, Up gradation of steel sector technology & Quality, enhance energy
48
Manufacturing
conservation techniques and to enhance per capita steel consumption, EDB has drafted
submittedtotheMOI&PaSteelPolicyandwasforconsideration.
x EDB has prepared an Electronic Policy and submitted to the MOI&P with the objectives that
Electronics Industry of Pakistan shall supply key products with own brands in consumer
electronics and industrial automation capturing major share of the home market which will
providethebaseforenteringexports
x ChemicalIndustryvisionwasinitiatedtohaveowntechnologicalandengineeringcapabilityin
order to make self reliant by progressively reducing dependence on foreign engineering
corporationsatpresentinvolvedinthecommercializationofchemicalandindustrialprojects.
x AstrategyforElectricCapitalGoodshasbeenworkedoutwithWAPDAtopreparelocalindustry
to meet their demand for electric capital goods like Small hydel turbines, Transformers,
Switchgears, towers etc. for the next 5 years. In the first phase, demand of electrical capital
goodsinthefiveyearsperiod20102014hasalreadybeenworkedout.
x InordertoenhancecorecompetenceoftheengineeringindustryofPakistan,EDBasaBusiness
Support Organization (BSO) is providing Senior Volunteer Experts from various international
organizations
3.32AutomotiveIndustries
After recording massive downturn last year the industry has put to some recovery in all the sectors
exceptlightcommercialvehicles(LCVs),whereafallpersists,comingto14.4%forJulyMarchperiodof
the current year. Even so, the extent of recovery in other than LCV, sectors has been modest in
comparisonwiththefallthathasrippedthroughtheindustrylastyear.Aswouldappearfromthetable:
3.3 some growth in passenger cars and trucks and buses has taken place but that is not expected to
surpassthehighesteverfigures.Comparingwiththehighesteverfiguresof200708thesaidrecoveryin
effectrepresents30%downturnthisyearcomparedto48%lastyear.Meanwhile,theindustrylivenup
with the projections stated in the five year Autoindustry Development Program, commenced in
December2007,undertookhugeexpansionprogramsbymakingsubstantialinvestment.Howeverthe
slumpthatovertakenlastyearisnotabatingatthatexpansionwouldcontinuetobeidle.
The persistent fall in LCVs/jeeps is due to their sensitivity to the falling purchasing power, rise in the
priceofdiesel,exchangeratelossesandtheescalatingoperatingcosts.
Table:3.11:ProductionofAutomotiveIndustries
Category
Installed
Capacity
200708
Cars
LCVs/Jeeps
Buses
Trucks
Tractors
Two/ThreeWheelers
275,000
40,000
5,000
28,500
65,000
1,800,000
164,710
22,944
1,146
4,993
53,256
657,188
No.ofUnitsProduced
200809
200910
%Age
200809
(JulMar)
(JulMar)
Change
84,308
63,273
86,613
36.9%
17,092
14,366
12,294
14.4%
662
408
474
16.2%
3,135
2,169
2.521
16.2%
59,968
41,661
52,878
26.9%
511,969
359,335
534,797
48.8%
Source:PakistanAutomotiveManufacturersAssociation
After a moderate fall last year, the two/three wheeler sector of the industry revived with substantial
growthof48.8%duringthecurrentfiscalyear.
49
UnlikeotherautomotivestheFarmTractorshasbeenunyieldingtoprevailingeconomiccrisesandare
registeringpersistentgrowthforthelastthreeyears.Thereissimilaroutlookforthecurrentyearwith
projectedgrowthof16%.FarmTractorisindeedadifferentautomotivebutitsresilienceisessentially
emanatefromhighdegreeoflocalizationandbringingoutaproductinthemarketcompetitiveinterms
ofbothqualityandprice.
There hasnotbeen good enoughrecoveryparticularlyinpassenger cars,jeeps,busesandtracks. The
persistent high inflation has negatively affected the purchasing power, there has been an inevitable
increase in the vehicle costs due to host of reasons the chief being massive currency depreciation. A
generalcostincreasecombinedwithincreasedcostoffinancinghastakenawaytheaffordability,asthe
consumerismoreengagedtomeettheotherdemandinelasticneeds.
Thepotentialdemandforvehiclesintheeconomymaintainsaworthwhilepromisefortheindustryand
theslowdownmaynotbelonglasting.However,therecoveryinautomotiveswouldcorrespondtothe
macroeconomicstabilityandconsequentrecoveryinothersectors.
FertilizerIndustry:
Domestic fertilizer industry witnessed positive trend in production during the year under review. The
production in nutrient terms increased from 2906 thousand tonnes during 200809 to 3024 thousand
tonnes during 200910 showing an increase of 4.1 per cent. Nitrogen production was 2611 thousand
tonnes during 200910 and recorded an increase of 3.2 per cent (86.3 per cent in total nutrient
production),phosphate403thousandtonnes(13.3percentshareintotalnutrientproduction),which
increased by 10.7 per cent. Potash blends production was bout 10 thousand tonnes and was almost
sameasinpreviousyear(0.3percentshareintotalnutrientproduction).
The subsidy on phosphatic and potassic fertilizers was eliminated on 31st December 2008. However,
fromJanuary,2010,theGovernmentofPakistan(GOP)initiatedanewschemeofsubsidyamountingto
Rs.500perbagof50kgforpotassicfertilizersonly.For200910,thesubsidyonpotassicfertilizershas
beenestimatedasRs.0.5billion.Alongwiththis,thesubsidyonimportedUreabypickingthedifference
overitslocalprice(forpricestabilizationpurpose)continuedfor200910.Onflipside,importedUrea
has cost the GoP in 200910 at least Rs. 1400 per bag, while, the total subsidy on imported Urea is
estimatedasaboutRs.14billionfor200910.Inadditiontothis,theGovernmentisalsoprovidingan
indirect subsidy to fertilizer manufacturers by selling feedstock gas (80% of the raw material cost) at
approximately50percentlowerratesascomparedtothepriceforcommercialusers.
Plannedcapacityadditions
x A new fertilizer manufacturing plant at Sadiqabad, Distt. Rahim Yar Khan, with a capacity of
producing400thousandtonnesofurea,450thousandtonnesofCAN,400thousandtonnesof
NPand300thousandtonnesofNPK,isexpectedtostartproductioninthecurrentyear.Itisa
projectofFatimaFertilizerCompany,ownerofPakArabFertiliser.
x EngroChemicalisinstallinganewureaplantwithanannualcapacityof1300thousandtonnes.
Gas has already been allocated for the plant. The plant is expected to be operational by
September2010.Thiswillreducefertilizerimportsintothecountry.
x SurajFertilizerIndustrieshassetupanewplantofSSP(18percent)atHarappa(Sahiwal)with
productioncapacityof150thousandtonnesannually.
x Inaddition,fewcompanieshavestartedproductionofSSP(14percent)atsmallscaleleveland
theirtotalannualproductioncapacityisaround20thousandtonnes.
50
Manufacturing
3.33CementIndustry
Cementindustryplayedavitalroleintheuptrendofmanufacturingsectorduringthecurrentfinancial
yearof200910.Maincontributorstothishighgrowthincementindustryweredomesticdemandanda
strongexportdemandfromtheneighboringcountries.PresentlyPakistanscementisbeingexportedto
Afghanistan,India,Africa,andMiddleEast.ExportofcementisexemptedfromtheSalesTax(16%)and
federalExciseDuty(FED).CementexportofPakistan(Quantity&Value)since200607till200910(Jul
Mar)aregiveninTable3.12.
Table3.12:CementExportofPakistan
Year
200607
200708
200809
200910(JulMar)
Exports
(MillionTonnes)
3.2
7.7
8.9
6.7
Value
US$
185million
450million
534million
356million
Source:MinistryofIndustry&Production
Domestic demand of cement has increased during the period under review due to reduction in local
dementprices,reductioninotherbuildingmaterialpricesandreductionoffederalexciseduty(FED)on
cementinthelastbudgetof200910.
Table3.13:Demand/Supply/ProductionofCement
InstalledCapacity
NoofUnits
LocalDemand(200809)
Productionduring200910(JulMar)
CapacityUtilization(200910)(JulMar)
(Milliontones)
44
29
19.4
22.8
51.8%
Source:MinistryofIndustry&Production
SugarIndustry
Thereare82functionalsugarmillsin the country outofwhich45areinPunjab,32inSindhand5in
KhyberPakhtonkhwa.Thetotalsugarproductioncapacityis6.8milliontonsinaseasonandaboutsix
hundred thousand (600,000) tons per day. Capacity utilized is 6070% depending upon sugarcane
production.
Inthecurrentcrushingseason200910atotalquantityof3.1milliontonsnewsugarhasbeenproduced
inthecountrynearlyachievingthetargetestimatedproductionlevelof3.1milliontons.However,the
annualconsumptionis4.2milliontonsthusthebalanceof1.1milliontonsisbeingimportedtomeet
thegap(Table3.14).
Table3.14Sugarproductionasanticipated
Sugar
Sugarcane
Areacroppedby
SugarProduction
Consumption
Surplus/Shortfall
Production
Year
sugarcane
(millionTones)
(millionTones)
(MillionTones)
(000Hectares)
200708
1241
63
4.7
4.2
+0.5
200809
1029
50
3.2
4.2
1.0
200910
943
49.3
3.1
4.2
1.1
Source:SugarcaneCommissioner,Ministryoffood&Agriculture&MinistryofIndustriesandProduction
51
PakistanSteel
Theunprecedentedeconomicmeltdownwhichstartedintheyear2008,causedcrashofsteelproducts
marketworldoverintermsofbothpricewiseandquantitywiseandconsequentlyproductionofsteel
industryworldoverhassufferedvery badlyduring theyear200809which wascontinuing duringthe
year200910also.Pakistanbeinganimporterofbasicrawmaterials,hasalsosufferedduetothiscrisis.
DuetofinancialcrunchasaresultofhugelossofRs.26.5billionsufferedbyPakistanSteelintheyear
200809,PakistanSteelhasnotbeenabletoarrangeimportofbasicrawmaterials,ironoresandcoal,
as per its requirement. Despite best efforts, Pakistan Steel production during July, 2009 to February,
2010,hasremainedat43percentcapacityutilization.However,financiallossduringtheyear200910is
expectedtobemuchlowerthanthelosssufferedintheyear200809.
FuturePlan:
x The domestic consumption of steel products is presently around 56 mtpy. Expansion in the
productioncapacityofPakistanSteelto3.0mtpyoraboveis,therefore,aviableproposal.
x Pakistan Steel is considering execution of its expansion plan in two stages which will be
completedinnext03to05years.
x Pakistan Steel has started an indigenization program to replace costly imported iron ore by
locallyavailablematerialanditisexpectedthat2,50,000metrictones(MTN)ironore(local)will
bearrangedforitsutilizationatPakistanSteelthisyearwhichwillbeenhancedto500,000MTN
withinnextthreeyears.
3.4MiningandQuarrying
Pakistan has a widely varied geological frame work, ranging from preCambrian to the Present that
includes a number of zones hosting several metallic minerals, industrial minerals, precious and semi
preciousstones.Despiteofthese,theminingandquarryingsectordepictedadismalgrowthofnegative
2.3 percent during the first nine months of on going fiscal year. Most of principal minerals witnessed
negativegrowthrateduringtheperiodunderreview.Thegrowthofcoaldeclinedby(18.5%)followed
bycrudeoil(6.7%),dolomite(69.6%),magnesite(94.7%),rocksalt(1.3%),sulphur(6.6%)andbaryte
(26.1%)respectively.
However, natural gas and chromite posted positive growth rate of (1.3%) and (32.1 %) respectively
duringthecurrentfinancialyear(SeeTable3.15).
Table3.15:ExtractionofPrincipalMinerals
Minerals
Coal
NaturalGas
CrudeOil
Chromite
Dolomite
Gypsum
Limestone
Magnesite
RockSalt
Sulphur
Baryte
UnitofQuantity
MillionsTonnes
Min.Cu.M
Min.Barrels
000Tonnes
000Tonnes
000Tonnes
MillionTonnes
000Tonnes
000Tonnes
000Tonnes
000Tonnes
200708
200809
4.1
42.3
25.6
115
359.9
660
31.8
3.9
1849
29.5
50
3.7
41.4
24.0
89.7
249.9
800
33.1
2.6
1917
25.7
63
JulyMarch
%
200809
200910
2.7
2.2
18.5
31.0
31.4
1.3
19.2
17.91
6.7
80.0
107
32.1
246.4
75.0
69.6
532
539
3.1
25.0
26.0
4.0
1.9
0.10
94.7
1380
1362
1.3
19.7
18.4
6.6
46.0
34.0
26.1
52
Manufacturing
3.5MineralProductioninBalochistan
Balochistan,thelargestprovinceofPakistan,coveringanareaof347,190sq.km,43%ofthetotalarea,
enjoysa uniquestrategic position.Balochistanisresourcerichprovince havingsubstantial depositsof
metallicandnonmetallicminerals.
In Balochistan, the mining activities are primarily carried out by the private sector and mines and
mineraldevelopmentdepartment.
Revenuerecipients
Enhancementofthemineralactivityhasnotonlyprovidedsocioeconomicupliftoftheremoteareasof
the province, creation of job opportunities for the local, as well as increase in the revenue to
Governmentexchequer.(Rent&royalty).ThisDirectoratehascollectedrevenuesonaccountofrent&
royaltysince200405toMarch2010areasgivenbelow:
Table3.16:DetailofRevenueRecipients
S.No.
Period
RevenueReceipts
1.
200405
208.72
2.
200506
252.76
3.
200607
380.928
4.
200708
537.69
5.
200809
524.57
6.
July2009toMarch2010
435.166
Source:Mines&MineraldevelopmentdepartmentGovt.ofBalochistan
FuturePlans
1. Allocation/provisionofmorefundsforinfrastructuredevelopment.
2. AcceleratedExplorationactivitiesofMineralsResourcesoftheProvince.
3. EstablishmentofMineralbasedindustrywithinprovincelike:
i) CementFactories.
ii) ValueadditionPlants/FerroChromePlants.
iii) MiniSteelMillatChagaiandDilbandIronoredeposits.
iv) EstablishmentofCoalbasedPowerPlants.
4. ImplementationofMineralsSectorDevelopmentProgrammewiththeassistanceofWorld
Bank.
3.6SmallandMediumEnterpriseDevelopmentAuthority(SMEDA)
SMEs are considered as one of the most important driving forces behind economic development,
employment generation and poverty reduction. SMEs jointly contribute approximately 30% to GDP;
employ80%ofthenonagriculturallabourforce,25%tototalexportsand35%tomanufacturingvalue
addition.
In 200910, SMEDA worked on a series of demonstration projects/CFCs in major SME clusters for
productivityandcompetitivenessenhancementofSMEsector.Asmanyas20projectsamountingtoRs.
2,215 million have been approved by the Government for implementation by SMEDA. These include
projects in sports, agro based industry, leather, foundry, glass products and light engineering sectors
53
besides business and display facilities for SMEs such as Gujranwala Business Centre, Sports Industry
DevelopmentCenterandWomenBusinessIncubationCenters.Someoftheseprojectswereenvisaged
in the SME Policy 2007 implementation plan, such as the SME Subcontracting Exchange and Policy &
Project Implementation, Monitoring & Evaluation Unit (PPIMEU). PPIMEU has been established in
SMEDA head office to oversee the implementation of demonstration projects and Common Facility
Centres (CFC) being implemented by SMEDA through the Public Sector Development Programme
(PSDP).
Tofacilitatewomenentrepreneurs,WomenBusinessIncubationCentre(WBIC),Lahorewasestablished
in2007.AfterthesuccessofWBICLahore,similarprojectshavealsobeenapprovedforimplementation
inPeshawar,QuettaandKarachi.TheseCenterswillproviderentalspaceforoffices,exhibition/display
facilitiesandbusinessdevelopmentservicesincludingtrainingtowomenentrepreneurs,allunderone
roof.
AccesstofinancehasbeenalongstandingproblemfacedbySMEsinPakistan.TofacilitateSMEsinthis
regard,SMEPolicy2007envisagedcreationofaventurecapitalfundandcreditguaranteeschemeinits
implementationplan.Acreditguaranteeschemeandventurecapitalfundwerelaterannouncedbythe
Government in Federal Budget 200910. State bank of Pakistan is steering the process of establishing
thesetwoinitiatives.
54
TABLE 3.1
RESERVES AND EXTRACTION OF PRINCIPAL MINERALS
Antimony
(tonnes)
Reserves/
Years
1990-91
128
1991-92
1992-93
5
1993-94
3
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
95
2001-02
37
2002-03
2003-04
2004-05
5
2005-06
91
2006-07
119
2007-08
245
2008-09
75
July-March
2008-09
60
2009-10 P
..
- : Nil or Insignificant
P : Provisional
Argonite/
Marble
Very
large
Deposits
281
321
388
460
467
458
459
345
403
579
620
685
1,066
994
1,280
1,835
1,980
1,537
1,144
990
472
China
Clay
4.9
million
tons
44
42
37
48
31
43
66
68
67
63
47
54
40
25
38
53
31
32
17
Celestite
(tonnes)
..
1,773
1,069
1,682
4,398
1,403
762
812
961
642
802
807
382
402
570
1,855
3,160
1,530
1,310
470
23
670
10
..
.. : Not available
Chromite
Coal
185
billion
tonnes
3,054
3,627
3,256
3,534
3,043
3,465
3,496
3,145
3,378
3,164
3,285
3,512
3,609
3,325
3,367
3,854
3,702
4,066
3,674
Dolomite
(tonnes)
Very
large
Deposits
154,591
180,987
220,241
228,090
227,079
185,115
215,556
116,046
198,831
347,583
352,689
312,886
340,864
297,419
199,653
183,952
342,463
359,994
249,918
fairly
large
Deposits
24
28
23
11
13
27
35
35
18
26
22
24
31
29
46
52
104
115
89
81
107
2,960
2,224
246,489
75,000
Fire Clay
Over 100
million
tons
120
139
132
116
152
112
110
94
153
139
164
171
117
193
254
333
347
330
148
Fullers
Earth
fairly
large
Deposits
23
21
23
17
15
18
12
18
16
19
13
16
15
14
17
16
11
11
4
Gypsum
Anhydrite
350
million
tons
468
471
533
666
620
420
522
307
242
355
364
402
424
467
552
601
624
660
800
259
221
8
9
532
539
(000 tonnes)
Lime
Stone
Very
large
Deposits
9,009
8,528
9,015
9,125
9,682
9,740
9,491
11,166
9,467
9,589
10,870
10,820
11,880
13,150
14,857
18,427
25,512
31,789
33,100
24,540
26,000
(Contd.)
TABLE 3.1
RESERVES AND EXTRACTION OF PRINCIPAL MINERALS
Magnesite
(tonnes)
Reserves/
Years
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
July-March
2008-09
2009-10 P
P : Provisional
4,242
6,333
5,047
7,000
5,227
14,981
6,679
3,397
3,455
4,513
4,645
4,637
2,645
6,074
3,029
2,446
3,445
3,940
2,639
1,864
100
Rock
Salt
Silica
Sand
Over 100
Very
million
large
tons
deposits
736
143
833
132
895
158
916
169
890
152
958
184
1,066
154
971
135
1,190
158
1,358
167
1,394
155
1,423
157
1,426
185
1,640
259
1,648
309
1,859
411
1,873
402
1,849
403
1,917
370
1,380
1,362
280
252
Ochre
(tonnes)
Sulphur
(tonnes)
Soap
Stone
Baryte
1,285
1,001
1,000
745
4,623
8,081
2,047
3,147
4,080
4,793
4,691
5,064
6,733
7,861
18,686
34,320
61,665
46,215
56,617
0.8
million
tons
295
215
510
715
510
20
640
22,458
19,103
22,812
17,428
22,580
19,402
23,873
24,158
24,730
27,710
29,485
25,784
0.6
million
tons
32
37
48
44
34
40
45
49
61
48
47
39
66
52
21
21
45
38
14
44,566
37,215
19,907
18,477
26
7
..
Crude
Oil (m.
barrels)
184
million
US barrels
23.49
22.47
21.90
20.68
19.86
21.05
21.27
20.54
19.95
20.40
21.08
23.19
23.46
22.62
24.12
23.94
24.62
25.60
24.03
(000 tonnes)
Natural
Gas (000
m.cu.mtr.)
492
billion
cu. metre
14.66
15.57
16.50
17.65
17.77
18.85
19.76
19.82
20.92
23.17
24.78
26.16
28.11
34.06
38.08
39.65
40.03
41.18
41.36
5
million
tons
26
30
26
18
20
14
30
30
18
26
28
21
41
44
42
52
47
50
63
Bauxite/
Laterite
(tonnes)
Over 74
million
tons
24,644
21,818
18,682
34,984
32,214
19,554
33,583
28,366
41,362
48,237
35,114
37,182
67,536
88,044
78,288
60,370
150,796
174,223
137,485
Iron
Ore
(tonnes)
Over 430
million
tons
318
937
1,922
3,792
8,103
6,046
4,575
5,500
38,151
45,980
24,765
4,942
11,483
84,946
104,278
131,259
125,879
286,255
320,214
46
34
135,745
68,071
240,920
19.26
30.96
228,975
17.91
31.40
Source : Federal Bureau of Statistics.
TABLE 3.2
PRODUCTION INDEX OF MINING AND MANUFACTURING
Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1969-70=100
468
472.1
478
483.4
461.8
504.8
520.1
512.3
509.1
Mining
1975-76=100
410.3
412.8
420.6
427.1
417.6
445.3
456.3
449.5
448.7
1980-81=100
275.2
277.8
278.4
275.2
270.8
296.7
305.6
302.5
283.1
545.6
576.7
611.3
656.7
709.8
..
..
..
..
..
468.8
497.6
532.8
572.4
597.2
..
..
..
..
..
100.0
105.6
112.5
119.6
134.8
148.7
155.4
158.6
162.8
160.3
..
..
..
..
Manufacturing
1980-81=100
202.5
218.5
227.5
237.2
240.8
248.4
243.1
261.6
270.8
1999-2000=100
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
July-March
2008-09
2009-10 P
.. : Not available
P : Provisional
100.0
101.0
114.8
123.1
146.4
173.0
188.8
205.1
213.9
195.9
164.4
194.5
160.6
203.5
TABLE 3.3
COTTON TEXTILES STATISTICS
Year
No. of
Mills
247
271
284
320
334
349
357
353
348
351
353
354
363
357
423
437
427
427
369
..
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10 P
P : Provisional
.. : Not available
Working at the end

Installed Capacity
of the period
No. of
No. of
No. of
No. of
Spindles Looms Spindles Looms
(000)
(000)
(000)
(000)
5,493
15
4,754
8
6,141
15
5,260
8
6,768
14
5,433
6
8,182
14
5,886
6
8,307
14
5,991
5
8,493
13
6,356
5
8,137
10
6,465
5
8,274
10
6,556
4
8,298
10
6,594
5
8,383
10
6,750
4
8,594
10
7,105
4
8,967
10
7,078
5
9,216
10
7,623
5
9,499
10
7,934
4
10,941
9
8,852
5
11,168
9
9,631
4
11,266
8
10,057
4
11,834
8
9,960
4
10,514
9
9,375
4
10,101
..
..
..
Spindle
Hours
Worked
(Million)
39,542
43,606
46,364
47,221
49,734
52,239
53,625
55,005
55,802
57,205
59,219
61,267
64,274
69,652
72,255
74,884
76,892
76,400
75,405
..
Loom
Hours
Worked
(Million)
60.2
58.8
55.5
44.0
41.8
37.1
36.4
37.7
35.2
34.3
34.1
36.3
38.7
32.7
31.2
24.8
21.7
21.5
24.0
..
ConsumpTotal
Surplus
Total Protion of
Yarn ProYarn
duction
Cotton
duced
of Cloth
(mln kg)
(mln.kg)
(mln. kg)
(mln. sq mtr.)
1,197.5
1,041.2
1,001.0
292.9
1,342.8
1,170.7
1,134.7
307.9
1,427.0
1,219.0
1,148.6
325.4
1,483.4
1,309.6
1,272.8
314.9
1,558.9
1,369.7
1,340.6
321.8
1,661.9
1,495.1
1,434.7
327.0
1,670.1
1,520.8
1,473.9
333.5
1,751.0
1,532.3
1,478.9
340.3
1,839.6
1,540.3
1,482.4
384.6
1,961.6
1,669.9
1,604.4
437.2
2,070.1
1,721.0
1,652.7
490.2
2,155.2
1,808.6
1,731.2
568.4
2,371.3
1,934.9
1,855.4
576.6
2,397.8
1,929.1
1,835.9
683.4
2,622.8
2,270.3
2,104.9
924.7
2,932.6
2,556.3
2,457.6
915.3
3,143.5
2,727.6
2,623.2
1,012.9
3,159.2
2,809.4
2,700.3
1,016.4
2,648.2
2,274.4
2,328.2
1,019.2
..
1,922.4
..
762.4
Textile Commissioner Organization
TABLE 3.4
PRODUCTION OF FERTILIZERS, VEGETABLE GHEE, SUGAR AND CEMENT
(000 tonnes)
Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
July-March
2008-09
2009-10 P
- : Nil
P : Provisional
Urea
2,050.3
1,898.0
2,306.1
3,103.8
3,000.2
3,260.1
3,258.7
3,284.2
3,521.7
3,785.0
4,005.1
4,259.6
4,401.9
4,431.6
4,606.4
4,806.4
4,732.5
4,924.9
4,918.4
Super
Phosphate
175.1
194.0
205.0
195.1
147.0
103.7
0.1
0.0
21.6
145.8
159.6
161.0
147.2
167.7
163.1
160.8
148.9
161.8
187.4
Fertilizers
Ammonium
Nitrate
318.8
300.0
302.2
242.7
313.9
383.5
330.2
316.3
338.8
386.5
374.4
329.4
335.3
350.4
329.9
327.9
330.8
343.7
344.3
Ammonium
Sulphate
92.3
92.9
92.9
82.0
79.6
83.7
80.9
-
Nitro
Phosphate
321.0
309.8
297.3
251.4
285.0
336.5
350.3
293.2
285.0
261.3
282.5
305.7
304.9
363.5
338.9
356.6
325.8
329.7
305.7
Vegetable
Ghee
656
639
725
671
711
733
714
719
773
695
835
797
772
888
1,048
1,152
1,180
1,137
1,059
3,652.4
3,783.6
143.2
122.5
245.7
244.3
218.4
210.8
798
778
Sugar
Cement
1,934
2,322
2,384
2,841
2,964
2,426
2,383
3,555
3,542
2,429
2,956
3,247
3,686
4,021
3,116
2,960
3,527
4,733
3,190
7,762
8,321
8,558
8,100
7,913
9,567
9,536
9,364
9,635
9,314
9,674
9,935
10,845
12,862
16,353
18,564
22,739
26,751
28,380
3,189
20,469
3,078
22,763
TABLE 3.5
PRODUCTION OF SELECTED INDUSTRIAL ITEMS
Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
July-March
2008-09
2009-10 P
P : Provisional
Food and Tobacco

Beverages
Cigarettes
(000 doz.
(Million
bottles)
Nos)
67,607
29,887
85,266
29,673
139,823
29,947
113,704
35,895
143,019
32,747
131,114
45,506
115,817
46,101
149,848
48,215
185,014
51,578
194,336
46,976
211,798
58,259
207,646
55,108
190,742
49,365
224,238
55,399
285,326
61,097
384,969
64,137
517,110
65,980
612,606
67,446
630,886
75,609
434,630
355,270
55,625
49,510
Jute
Textiles
(000
tonnes)
96.9
100.9
97.5
76.4
68.5
70.6
68.7
95.4
85.5
85.5
89.4
81.7
93.8
102.0
104.8
104.5
118.1
129.0
137.4
Motor
Tyres
(000 Nos)
952
784
712
783
912
1003
525
767
845
856
884
908
1082
1302
5336
5942
7027
6990
7102
Motor
Tubes
(000 Nos)
646
618
550
706
833
909
643
665
586
490
520
557
616
587
6278
7164
10277
9627
14514
Rubber
Cycle
Tyres
(000 Nos)
3,828
3,751
3,826
3,872
3,523
3,988
4,112
1,415
3,665
3,767
4,051
4,569
5,330
4,894
4,900
5,287
5,182
4,243
3,214
98.8
77.9
5,025
6,198
9,938
14,891
2,164
2,415
Cycle
Tubes
(000 Nos)
5,468
5,757
5,612
6,191
5,146
5,594
5,205
4,978
5,529
5,937
5,891
6,938
8,942
8,004
9,612
10,204
10,420
9,224
6,867
5,068
5,257
(Contd.)
TABLE 3.5
PRODUCTION OF SELECTED ITEMS
Chemicals
Paints &
Varnishes
Polishes &
Creams for
Footwear
Transport, Machinery &

Electrical Appliances
Sewing
Total
Bicycles
Machines
TV Sets
Year
Soda
Ash
Sulphuric
Acid
Caustic
Soda
Chlorine
Gas
(000 tonnes)
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
July-March
2008-09
2009-10 P
P : Provisional
(000 tonnes)
(000 tonnes)
(000 tonnes)
(tonnes)
(mln. grams)
(000 Nos.)
(000 Nos.)
(000 Nos.)
147.2
185.9
196.2
197.0
196.1
221.2
247.0
240.3
239.4
245.7
217.9
215.2
281.5
286.5
297.3
318.7
330.6
364.9
365.3
93.5
97.6
99.8
102.3
80.4
69.2
30.8
28.1
27.0
57.7
57.1
59.4
56.0
64.6
91.3
94.4
96.3
102.8
97.8
78.5
82.0
81.5
89.0
92.7
109.0
118.2
115.7
120.4
141.3
145.5
150.3
164.4
187.5
206.7
219.3
242.2
248.3
244.3
6.7
6.1
5.9
5.8
7.8
9.1
9.4
9.7
11.3
14.2
14.5
15.1
15.9
17.2
19.1
18.3
17.2
18.2
16.5
14,308
18,950
16,626
9,373
6,865
8,030
8,005
5,917
6,500
7,347
10,922
10,341
3,899
5,406
15,023
17,147
23,936
26,308
29,831
651.1
682.5
638.1
602.8
719.5
836.8
861.1
869.7
888.8
897.7
906.7
920.9
935.3
950.1
959.6
969.2
978.8
988.6
998.5
428.8
478.4
588.6
563.7
473.4
545.1
432.4
452.1
504.0
534.1
569.6
553.4
629.7
664.1
587.9
589.6
486.3
535.5
428.3
81.3
85.1
72.3
76.7
68.1
84.1
61.1
36.2
29.7
27.6
26.9
24.0
30.6
35.0
36.1
39.1
52.2
57.3
50.8
181.7
145.5
162.2
112.5
101.1
277.6
185.6
107.4
128.3
121.3
97.4
450.0
764.6
843.1
908.8
935.1
608.6
716.1
402.3
267.7
300.7
74.4
61.7
176.8
137.0
12.5
11.5
22,864
22,159
715.4
722.5
285.3
332.9
38.6
37.6
317.2
261.3
(Contd.)
TABLE 3.5
PRODUCTION OF SELECTED INDUSTRIAL ITEMS
Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
July-March
2008-09
2009-10 P
P : Provisional
Electrical Appliances
Electric
Electric
Bulbs
Tubes
Paper & Board

Paper
Paper
Board
(All Types)
Steel Products
Coke
Pig Iron
Billets
(Mln.Nos)
(000 metres)
(000 tonnes)
(000 tonnes)
(000 tonnes)
(000 tonnes)
(000 tonnes)
49.3
43.2
41.3
42.7
41.6
45.8
56.4
62.5
66.8
63.2
55.2
54.6
58.3
139.4
146.7
143.6
144.8
129.8
91.8
7,728
4,460
4,205
5,307
5,352
5,417
7,598
8,354
7,991
7,137
10,542
10,441
10,844
14,614
19,819
19,992
21,400
19,524
11,101
88.6
111.0
154.8
133.2
106.2
110.0
197.6
166.5
173.6
228.0
246.3
187.6
228.2
247.9
420.6
476.7
464.7
448.2
449.6
64.2
66.0
109.0
129.3
208.4
193.4
149.0
178.3
186.8
206.2
284.8
137.9
148.0
156.8
163.7
167.7
161.7
192.0
252.5
723.6
737.2
716.4
771.6
701.5
685.6
663.0
667.7
588.7
675.5
717.3
694.6
775.2
785.5
772.8
182.3
326.3
290.9
423.7
1,073.9
1,048.1
1,098.2
1,252.7
1,044.7
1,002.2
1,068.6
1,015.8
989.3
1,106.6
1,071.2
1,042.9
1,140.2
1,180.0
1,137.2
767.9
1,008.8
993.4
791.1
330.0
306.7
338.4
403.9
343.5
332.7
378.5
350.1
276.1
345.2
414.7
412.0
408.4
429.2
2,715.0
3,381.0
3,678.0
2,874.0
1,943.0
72.9
57.9
10,198
2,179
340.5
330.7
188.9
185.4
329.7
640.9
1,477.0
263.4
388.7
1,252.0
Ministry of Industries
TABLE 3.6
PERCENT GROWTH OF SELECTED INDUSTRIAL ITEMS
Cotton
Yarn
14.22
12.44
4.13
7.43
4.59
9.16
1.72
0.76
0.52
8.41
3.06
5.09
6.18
0.73
18.22
11.66
11.73
2.44
(0.04)
Cotton
Cloth
(0.65)
5.12
5.68
(3.23)
2.19
1.62
1.99
2.04
13.02
13.73
12.12
20.09
1.66
17.39
35.31
(2.26)
8.18
3.95
0.05
Jute
Goods
1.15
4.13
(3.37)
(21.64)
(10.34)
3.07
(2.69)
38.86
(10.38)
(1.87)
4.56
(8.61)
14.03
8.87
0.80
(0.27)
12.97
9.29
6.50
Veg.Ghee
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
July-March
2008-09
(0.27)
(0.33)
6.57
2009-10
(1.76)
0.14
(21.07)
Note : Figures in parenthesis represent negative growth
Cigarettes
Fertilizers
Cement
Soda Ash
(3.93)
(2.59)
13.46
(7.45)
5.96
3.09
(2.59)
0.70
7.95
(9.65)
19.59
7.24
(6.75)
15.10
18.04
9.86
2.45
(3.63)
(6.89)
(7.41)
(0.72)
(0.92)
19.86
(8.77)
38.96
1.31
4.54
6.98
(8.92)
24.02
(5.05)
(10.42)
12.22
10.29
4.98
2.87
2.22
12.10
(2.66)
(5.52)
14.65
20.96
(1.27)
8.89
(3.53)
(3.15)
6.67
4.62
9.21
(0.38)
12.11
7.80
25.73
5.03
(7.75)
(2.48)
18.89
3.66
7.20
2.84
(5.35)
(2.31)
20.90
(0.32)
(1.80)
2.30
(3.33)
3.87
2.70
12.11
18.60
27.14
13.52
22.49
17.64
6.09
1.53
26.29
5.54
(0.41)
(0.46)
12.80
11.66
(2.71)
(0.37)
2.63
(11.30)
(1.23)
10.09
2.22
3.77
7.19
3.74
10.37
0.11
(8.17)
(2.49)
11.37
(10.99)
21.53
10.88
4.71
11.21
Caustic
Soda
6.01
4.49
(0.61)
9.20
4.16
17.58
8.44
(2.12)
4.06
17.36
2.97
3.85
9.34
14.11
10.21
6.11
10.45
2.50
(1.59)
Sugar
4.15
20.06
2.67
19.17
4.33
(18.15)
(1.77)
49.18
(0.48)
(31.41)
21.70
9.84
13.48
9.09
(22.51)
(5.01)
19.16
34.20
(32.61)
(1.25)
(2.38)
(26.32)
12.31
(22.47)
(3.47)
PublicFinances
Against a backdrop of the most severe global Table4.1:StimulusPackages(est.)

economic and financial crises in the last 70 years, Country
USD(Billions)
fiscal policy has made a strong comeback around China
585.3
the world as an instrument of countercyclical Germany
80.5
policy. A dramatic expansion of government and India
38.4
297.5
central bank balance sheets has taken place in the Japan
29.2
aftermath of the global financial crisis, as UnitedKingdom
UnitedStates
787
governments were forced to recapitalize banks,
Source:UNDP,March2010
takeoveralargepartofthedebtsoffailingfinancial
institutionsandintroducelargestimulusprogramstorevivetheeconomy(Table4.1).
As a result, over the past three years public debt has grown sharply in countries, even where it had
remainedrelativelylowbeforethecrisis(Table4.2),becausemanygovernmentsnotonlyhadtobailout
ailing banks, but also pay for rising unemployment benefits in addition to providing stimulus to the
economy. According to the IMF, public debt in advanced economies is expected to grow further,
because employment and growth are unlikely to return to their precrisis levels. Consequently,
employment and other benefits will need to be paid for several years. Strengthening the negative
feedback loop, a worsening of public debt sustainability could be transmitted back to the banking
system.
In the case of Pakistan, a low, and declining, Taxto
GDPratio,andanelevatedandrisingpublicdebt
stock has imposed a hard constraint on the size of
fiscalstimulusthatcanbeprovidedtotheeconomy.
Countries like China, Germany, UK and US entered
the crisis with greater fiscal space to expand,
including more favourable levels of deficits, public
debt,contingentliabilitiesandinterestrates.
Table4.2:GeneralGovernmentDebt
(Gross,%ofGDP)
2007
Country
2009
(precrisis)
Australia
8.5
13.7
Canada
64.2
75.6
China
20.2
20.9
France
63.8
77.4
Germany
63.6
79.8
India
80.5
83.7
Pakistan
55.5
58.1
Japan
187.7
217.4
UnitedKingdom
44.1
68.6
UnitedStates
63.1
88.8
Source: IMF,WorldEconomicOutlook,April2010
WiththeslowdowninPakistanseconomycomingin
the wake of a macroeconomic crisis in 2008 that
resultedfrompolicyinducedimbalancesofthepast,
the prudent course for policymakers has been to
adoptapathofstabilization.Thiscoursehasproved
tobemoreappropriate,withinflationsubsidingfrom
a historic peak of 25% in October 2008, to around
13%inApril2010.Persistentlyhighinflationoverthisperiodhasalsolimitedtheoptionsforthecentral
bankintheconductofitsmonetarypolicy.
Thenexusbetweenlowtaxrevenuecollection,thefiscaldeficit,thestockofpublicdebt,andthefuture
pathofgrowthintheeconomyneedstobeexaminedfurther.WithPakistanstaxcollectionamounting
55
toaround910%ofGDPatbest,ascomparedto12.9%forIndia,and14.2%forSriLanka,forexample,
the additional expenditure absorbed in the budget on account of any fiscal stimulus measure, would
necessarilyimplyanincreaseinthestockofpublicdebt.Each1%increaseinthesizeofthefiscaldeficit
increasesthepublicdebtstockbyatleast1.08%,atthecurrenteffectiveinterestrateonpublicdebt.In
actual effect, the increase is likely to be larger, after taking into account the impact on the external
imbalance,andtheincrementalborrowingneededtobeundertakenonthatfront.
OntheendMarch2010outstandingstockofpublicdebt,theaboveworkingwouldimplyanincreaseof
atleastRs.88.2billioninpublicdebt,foreveryonepercentagepointincreaseinthefiscaldeficitwith
the impact on growth less than clear. This incremental debt stock would generate an annual debt
servicingliabilityofoverRs.7billion.
Lookingatthestructureofbudgetaryexpenditure,debtservicing(includingrepaymentofforeignloans)
isexpectedtoaccountfor27%oftotalexpenditureforthecurrentfiscalyear.Giventherigidityofsome
of the other large expenditure heads, such as security spending, any increase in debt servicing
requirements will necessarily encroach on other areas of spending, including possibly development
spending, or expenditure on vulnerable segments of the population. Clearly, this would be an
undesirablesituation,asitcouldleadtoreducingPakistanslongertermgrowthprospects,orreducing
supportforthemostvulnerablegroupsinsocietytheexactoppositeoftheintendedresult.
In any case, the notion that growth in the economy Table4.3:SourcesofGrowthandTax
leads to autonomous, and at the very least,
Contributionto(inpercent):
proportionate growth in government revenue, is
GDP*
Growth*
Taxes
misplaced.Thisargumentisneitherborneoutbythe Agriculture
22
10
1
sources of growth and revenue in the economy, nor Industry
25
30
63
byPakistanshistoricalexperienceinthisregard(see Services
53
60
26
Table4.3).Infact,formanyofthepastseveralyears, *For200910
Source:FederalBureauofStatistics,
taxelasticityandbuoyancycombinedhaveyieldeda
FederalBoardofRevenue
close to unitary value, indicating the mismatch
betweenthesourcesofgrowthintheeconomyandthetaxrevenuebase.
A final point to note regards the durability of the growth that can potentially be delivered through a
fiscal stimulus. Historically, Pakistans highgrowth periods have lasted a maximum of around 4 to 5
yearswithorwithoutastimulus.Hence,theabsenceofpolicystimulusdoesnotappeartoexplainthe
shortandincreasinglyinfrequentspellsofhighgrowthinPakistanseconomy.
Toremovestructuralimpedimentstosustainedeconomicgrowthinthelongrun,suchastheabysmally
lowtaxrevenuecollection,Pakistanhasembarkedonameaningfulprogramofeconomicreform.The
lynchpinofthisreform programisenhancingPakistanscapacityto mobilise domesticresources,with
efficiencyaswellasequity.Thiswillbediscussedinasubsequentsection,afterashortreviewofrecent
developmentswithregardstopublicfinances.
4.3RecentDevelopments:200910
4.31FBRTaxRevenues
TheFBRrevenuetargetforFY10wassetatRs.1,380billiontakingintoaccountexpectedgrowthinGDP,
therateofinflation,taxbuoyancyandotherkeyeconomicindicators.Thetargetrequireda20percent
increaseoverlastyearscollectionofRs.1,157billion(seeTable4.4).
Againstthistarget,taxcollectionduringthefirsttenmonthsofthecurrentfiscalyear(JulyApril)stood
at Rs. 1,025.6 billion, net of refunds, which is 14 percent higher than the net collection of Rs. 900.9
56
PublicFinances
billioninthecorrespondingperiodoflastyear.Amongthefourfederaltaxes,thehighestgrowthof16%
hasbeenrecordedinthecaseofsalestaxreceipts,followedbydirecttax(17%),customs(7.2%)and
federalexcise(3.0%).
Table4.4:TaxCollection
Change
A.DIRECTTAXES
Gross
Refund/Rebate
Net
B.INDIRECTTAXES
Gross
Refund/Rebate
Net
B.1SALESTAX
Gross
Refund/Rebate
Net
B.2FEDERALEXCISE
Gross
Refund/Rebate
Net
B.3CUSTOM
Gross
Refund/Rebate
Net
TOTALTAXCOLLECTION
Gross
Refund/Rebate
Net
200809
(Actual)
440.3
716.7
452.3
116.1
148.4
1157
200809
JulyApril
200910
522
367.1
34.2
332.9
427.2
37.6
389.5
16.4
9.9
17.0
874
597.4
29.4
568
660.1
24.1
636.1
10.5
18.0
12.0
547
381.3
22.1
359.2
435.1
19
416
14.1
14.0
15.8
161
91.3
0.04
91.6
94.3
0.025
94.3
3.3
37.5
2.9
166
124.5
7.3
117.2
130.7
5
125.7
5.0
31.5
7.3
1396
964.5
63.6
900.9
200910
(R.E)
%Change
Over200809
1087.3
12.7
61.7
3.0
1025.6
13.8
Source:FederalBoardofRevenue
FBRtaxperformancewithrespecttotheannualtargetshowsthat73.5percentoftheannualtargethas
beenachievedduringJulyApril2010.Apickupineconomicactivity,anearlyresolutionoftheenergy
situation,animprovementininternalsecurity,acontinuationofthetrendofimprovementintheglobal
economy,andtherestructuringoftaxadministrationundertakenshouldallcontributeinincreasingthe
paceoftaxrevenuecollectioninthemonthsahead.Goingforward,thereinstatementofthetaxaudit
regime, which had been unwound in conjunction with the launch of the Universal SelfAssessment
Scheme(USAS)afewyearsago,shouldalsostartyieldingresults.
DirectTax
ForJulyApril2010,directtaxeshavebeenamajorsourceofFBRtaxrevenuecollection,contributing38
percentoftotalreceipts.NetcollectionwasestimatedatRs.389.5billion,whilegrossandnetcollection
hasregisteredagrowthof16and17percentduringJulyApril2010.Theshareofdirecttaxesinfederal
taxreceiptshasincreasedfrom15percentintheearly1990stoaround38percentin200910.
Despitetheimpressiveincrease,however,theactualincometaxbaseislow,sincedirecttaxcollection
hasbeenboostedsincethe1990sbytheintroductionofthewithholdingtax(WT)regime.
57
IndirectTax
Indirecttaxesgrewby12percentduringJulyApril10andaccountedfor68.6percentofthetotalFBR
tax revenue. Within indirect taxes, sales tax increased by 16 percent. The gross and net collection of
Sales tax stood at Rs. 435.1 and Rs. 416 billion respectively showing a growth of 14.1 percent and 16
percent respectively over the corresponding period of previous fiscal year. Of net collection, 53.4
percent is contributed by sales tax on domestic production and sales, while the rest originates from
imports. Within net domestic sales tax collection, major contribution has come from POL products,
telecomservices,naturalgas,sugarandcigarettes.Ontheotherhand,POLproducts,edibleoil,plastic
resins,vehicles,ironandsteelandmachineryandmechanicalapplianceshaveamajorcontributionin
theimportstagecollectionofSalestax.
Custom duty collections have improved marginally, with collection exhibiting a growth of 7.2 percent,
withacollectionofRs.125.7billionascomparedwithRs.117.2billionduringthesameperiodlastyear.
MajorrevenuesourceshavebeenPOL,automobiles,edibleoil,machinery,ironandsteelproductsetc.
Indirect taxes have shown a relatively better performance which is largely owed to the noticeable
collectionfromdomesticsourcesunderbothsalestaxaswellasfederalexciseduty.
ThenetcollectionoffederalexcisestoodatRs.94.3billionduringJulyApril2010againstRs.91.6billion
inthecorrespondingperiodoflastyear,registeringagrowthof3.0percent.Themajorrevenuespinners
arecigarettes,cement,beverages,naturalgas,POLproductsandservices.
Despitetheeconomicslowdown,includingadeclineinbothvolumeofimportsaswellaslandedprices,
andtheimpactoftheenergycrisis,FBRhasbeenabletoexceedthecollectionofthepreviousyearbya
significantmargin.Thisgrowthismainlyattributedtoanincreaseindomesticsalestaxcollectionunder
theheadsofelectricalenergy,sugar,services,beveragesandmotorcars,enhancementofrateofFED
oncigarettes,advertisement,banking,insuranceservicesandservicesprovidedbystockbrokersduring
thebudgetFY10,andincreasedtaxcollectionfromtheonepercentspecialexciseduty.
4.33ReviewofPublicexpenditure
IntheFederalbudgetfor200910,atotalexpenditureofRs.2,877.4billionwasestimatedforthefull
year, comprising of Rs. 2,260.9 billion of current expenditure (79% of total), and Rs. 616.5 billion of
development expenditure, including net lending. Among the major expenditure heads, interest
payments of Rs. 647.1 billion were estimated, while Rs. 342.9 billion was earmarked for Defence
services. Rs. 132 billion was allocated for subsidies, while the allocation for Grants amounted to Rs.
313.7billion.
Intermsofstructureofbudgetedexpenditure,currentexpenditurewasestimatedtoaccountfor79%of
totalspending,withdevelopmentandnetlendingat21%ofthetotal.Debtservicingaccountedfor27%
oftotalexpenditureinthefederalbudget200910,asubstantialdeclineofnearly5percentagepoints
over200809actuals.Shareofdefenceservicesstoodat17.2%,whilesubsidiesandgrantstotalledan
estimated11.8%(seeTable4.5).
58
PublicFinances
Table4.5:StructureofTotalExpenditure(TE)
Years
CurrentExp.
Dev.Exp.
Subsidies&
DebtServicingas
Defenceas%TE
as%TE
as%TE
Grantsas%TE
%TE
200102
84.7
15.3
18.1
3.5
52.5
200203
88.1
14.4
17.8
6.4
31.6
200304
81.1
16.8
19.3
7.1
36.6
200405
77.4
20.4
19.0
6.0
26.2
200506
73.8
26.0
17.2
7.2
24.4
200607
76.4
24.1
13.9
4.2
25.4
200708
81.4
19.9
12.2
18.6
25.4
200809
80.7
19.0
20.5*
14.6*
34.8
200910B
78.6
21.1
17.2*
11.8*
27.1
B:Budgeted
Source:BudgetWing
*ValuesarenotcomparablewithpreviousyearsduetodifferenceindefinitionusedinFY09&FY10
Thefollowingdiscussiononexpenditureisbasedonfirmdataforninemonths(JulytoMarch).
During the first nine months of 200910, substantial outlays on securityrelated spending as a
consequence of the widening as well as intensification of military operations in the northwest of the
country during 200910, combined with higher than budgeted electricity subsidies, have resulted in
somepressureonthebudget.TotalexpenditureduringJulyMarchFY10rosetoRs.2,027.8billion,arise
of19%overthesameperiodin200809(Table4.6).Totalrevenuesgrewby7.7percentandreachedRs.
1402billionduringJulyMarchFY10.
Table4.6:ConsolidatedRevenue&ExpenditureoftheGovernment
Prov.
Budget
Prov.Actual
Actual
Estimate
JulyJune
JulyJune
200910
200708
200809
A.TotalRevenue
1499.5
1850.9
2155.4
a)TaxRevenue
1050.7
1204.7
1593.5
FBRRevenue
1009.9
1158.6
1380
ProvincialTaxRevenue
40.8
46.1
70
b)NonTaxRevenue
448.7
646.2
561.9
B.TotalExpenditure
2276.5
2531.3
2877.4
a)CurrentExpenditure
1853.1
2041.6
2260.9
Interest
522.7
656.3
647.1
Defense
277.3
329.9
343
Others
616
509.7
681
b)DevelopmentExpenditure&
423.4
455.7
616.5
NetLending
C.OverallFiscalDeficit
777.2
680.4
722.1
As%ofGDP
7.6
5.2
4.9
FinancingofFiscalDeficit
777.2
680.4
722.1
i)ExternalSources
151.3
149.7
332
ii)Domestic
625.9
529.5
390.5
Bank
519.9
305.6
144.1
NonBank
104
223.8
246.3
PrivatizationProceeds
1.7
1.3
0.1
GDPatMarketPrices
10284
13095
14824
Prov.
Actual
JulyMar
200910
1402
1029.6
909.6
35.4
372.4
2027.8
1720.9
473.5
269.8
540.2
Prov.
Actual
JulyMar
200809
1,301.40
849.2
815.1
33
452.2
1706.6
1415.5
442.8
224.2
748.5
303
246.3
625.8
4.2
625.9
92.6
533.3
210.9
322.5
0.1
15039
Growth
JulyMar
200910
7.7
21.2
11.6
7.3
17.6
18.8
21.6
6.9
20.3
27.8
23.0
680.4
8.0
5.3
20.8
681.4
8.1
149.7
38.1
529.5
0.7
305.6
31.0
223.8
44.1
1.3
92.3
12,739
18.1
Source:BudgetWing
59
4.34TrendinRealExpenditure
Table4.7:TrendsinRealExpenditure(19992000=100)(% Growth)
Total
Expenditure
Period
1980's
7.7
1990's
2.8
1990I
2.4
1990II
3.1
200004
2.2
200409*
7.0
*Budgetestimatefor200809
Current
Expenditure
Development
Expenditure
10.5
4.5
3.9
5
0.1
5.7
2.7
2.6
1.7
3.5
9.4
13.5
Interest
payment
Defence
NonDefence
NonInterest
Expenditure
18.1
8.9
4.9
8.9
0.4
0.9
4.2
0.7
3
13.7
0.1
1.2
8.3
0.4
10.5
7.6
1.3
8.8
Source:EAWing,FinanceDivision
4.41AllocationofResourcesbetweentheFederalGovernment&Provinces
An important development in public finances is the recent agreement between the federal and
provincial governments on the 7th National Finance Commission (NFC) Award. Only the fourth
successfullyconcludedinPakistansentire63yearhistory,andthefirstinthelastnineteenyears,the
NFC Award lays the basis for resource distribution between the Center and the Provinces (vertical
distribution),andbetweentheProvinces(horizontaldistribution).
The last award was adopted in 1997 for a period of five years. However, after its expiry in 2002,
agreementontheawardwasamendedundertheDistributionofRevenueandGrantinAidAmendment
Order2006.Underthisadhocarrangement,theshareofprovincialgovernmentsinthefederaldivisible
pool was increased starting 200607 annually to 41.5, 42.5, 43.8, 45.0 and 46.4 percent thereafter in
comingyears.
Thedistributionofresourcesandfiscalequalisationtransfersareacontentiousissuearoundtheworld.
InPakistanscase,theNFCawardhashistoricallybeenbasedonthesinglecriteriaofPopulation.The7th
NFC Award marks a watershed since it has adopted by consensus a set of multiple criteria for
determininghorizontaldistributionofresources(seeBox).
Box1:SalientFeaturesof7thNFCaward.
1.
Thedistributionofresourceshasbeenmadeonmultiplecriteriainsteadofsinglecriteriaofpopulation.
2.
Theagreedsharingofthedivisiblepoolwillnowtakeplaceonthebasisofthefollowing:
3.
Population
82.0%
Povertyandbackwardness
10.3%
Revenuecollection/generation
5.0%
Inversepopulationdensity
2.7%
FederalTransferstotheprovincialgovernmentsonthebasisofthepercentagespecifiedagainsteach:
60
PublicFinances
Existing
7thNFCAward
Balochistan
7.17%
9.09%
KhyberPakhtunkhwa
14.88%
14.62%
Punjab
53.01%
51.74%
Sindh
24.94%
24.55%
Total
100.00%
100%
Source:ProvincialFinanceWing,FinanceDivision.
4.
InverticaldistributionFederalgovernmenthasallowedanincreaseintheshareoftheprovinceswith56
percentforfirstyearand57.5percentfortheremainingyears.TheshareoftheFederalGovernmentin
thenetproceedsofdivisiblepoolshallbe44percentduringthefinancialyear201011and42.5percent
fromthefinancialyear201112onwards.
5.
Inaddition,theFederalgovernmentagreedtoareductionofcollectionchargesfrom5%to1%,increasing
thepoolfordistributionby4%.
6.
Baluchistanwillreceive9.1percentinsteadof5.1percentandwillreceivetotalRs.83billionforthefirst
year.AnyshortfallinthisamountshallbemadeupbytheFederalGovernmentfromitsownresources.
7.
OnepercentofthenetproceedsofdivisiblepooltaxesshallbeassignedtogovernmentofKhyber
PakhtunKhwatomeettheexpensesonwaronterror.
8.
Eachprovinceshallbepaidineachfinancialyearasashareinthenetproceedsofthetotalroyaltieson
crudeoilanamountwhichbearstothetotalnetproceedsthesameproportionastheproductionof
crudeoilintheprovinceinthatyearbearstothetotalproductionofcrudeoil.
9.
EachProvinceshallbepaidineachfinancialyearasashareinthenetproceedstobeworkedoutbased
onaveragerateperMMBTUoftherespectiveprovince.
10. ThereshallbechargedupontheFederalConsolidatedFundeachyear,asgrantsinaidoftherevenuesof
theprovinceofSindhanamountequivalentto0.66%oftheprovincialshareinthenetproceedsof
divisiblepoolasacompensationforthelossesonaccountofabolitionofoctroiandzillatax(OZT).
11. IthasalsobeenrecommendedinNFCawardthattheFederalgovernmentandProvincialgovernments
shouldstreamlinetheirtaxcollectionsystemtoincreasetheirrevenuesinordertoachieve15percenttax
toGDPratiobytheterminalyeari.e.201415.
12. SimilarlyFederalGovernmentandProvincialgovernmentswoulddevelopandenforcemechanismfor
maintainingfiscaldisciplineattheFederalandProvinciallevelsthroughlegislativeandadministrative
measures.
Table4.8:TransferstoProvinces(NET)
200405
DivisiblePool
204.8
StraightTransfer
40.5
SpecialGrants/Subventions
35.3
ProjectAid
15.5
AgricultureSectorLoanII
1.4
JapaneseGrant
0.1
TotalTransfertoProvince
297.6
InterestPayment
24.3
LoanRepayment
28.7
TransfertoProvince(Net)
244.6
200506
244.6
56.8
63.5
17.5
2.8
0.1
385.2
21.6
14.7
348.9
200607
320.6
70.3
29.3
16.8
2.6
0.1
439.7
18
40.2
381.5
(Rs.Billion)
200708
200809 200910(B)
391.3
477.4
569.8
65.9
82.4
85.4
33.3
40.6
52.9
19.1
26.3
26.9
1.1
0
0.04
0.02
0.09
510.8
626.8
735.1
19.9
18.5
16.8
25.4
21
20.4
465.6
587.3
697.9
Source:BudgetinBrief:200809
61
An account of transfer to provinces is given in Table 4.8. The transfers to provinces on net basis
registeredadeclineofRs.116billionintherevisedestimates200809mainlyduetolowertaxcollection
byFBRduringtheyear.However,theseareplacedatRs.697.9billionisbudgetestimates200910i.e.
anincreaseof18.8percentovertherevisedestimates200809.
Reformagenda
A low and declining taxtoGDP ratio, is amongst Pakistans biggest structural weaknesses. Several
possiblereasonshavebeenadvancedforthelowtaxtoGDPratioinPakistan,whichinclude:
a) Anarrowtaxbase
b) Agriculture,largenumberofservices,capitalgainsisnotincludedintaxnet
c) Lowtaxcompliance
d) Widespreadexemptions
e) Largeundocumentedinformalsector
f)
Weakauditandenforcement
Anumberofmeasureshavebeenplannedtoredressthisshortcoming.FBRisundergoingamajorstep
intaxadministrationreform,withtheestablishmentoftheInlandRevenueService(IRS).Thiswillserve
asasingleentitywithintheFBRbymergingthetasksofalldomestictaxes,namelythesalestax,income
tax and excise tax. Thus the harmonization of tax administration will improve efficiency and help
increasethetaxtoGDPratiointhemediumterm.
Similarly, to broaden the tax base and to correct the structural shortcomings in Pakistans tax system
and particularly to ensure horizontal equity in the taxation system, a broad based Value Added Tax
(VAT) is sought to be implemented in the country. Considerable work has been completed for the
planned introduction of the VAT by July 1, 2010, subject to approval of national and provincial
assemblies.AfullVATwithminimalexemptions,tobeimplementedbytheFBRwillincludeagreement
withprovincesconcerningthetreatmentofservices.ThemainobjectiveistoincreasethetaxtoGDP
ratiotoabove14percentofGDPby2013/14(seeBox).
Box2:ValueAddedTax(VAT)
ValueAddedTax(VAT)isaspecialtypeofindirecttax,alsoknownasagoodsandservicestax(GST)inIndia,in
which a sum of money is levied at a particular stage in the sale of a product or service. Due to its revenue
generatingcapacity,efficiencyandreadycomprehensibilityinmanydevelopedcountries,thedevelopingnations
alsomotivatedtoadoptVATduringeightiesandnineties.
TheVATdealswithmanyproblemsquiteefficiently,thatareoftenassociatedwithaconventionalsalestaxsystem.
Insalestax,thereisnoprovisionforinputtaxcredit;consequentlytheendconsumerhastopaytaxonaninput
thathasalreadybeentaxedpreviously.Thisisknownascascadingwhichleadstoanincreaseinconsumertaxand
price level, thus increasing the incentive for evasion which can be harmful for economic growth. In VAT system
thereisnoincidenceofcascadingduetothefactthatitisimposedonvalueadditionateverysinglestage.
MediumTermBudgetaryFramework(MTBF)
MTBFisasystemformakingthebudgetprocessmorestrategicandresponsivetotheprioritiesofthe
62
PublicFinances
government, as it will introduce a medium term (3 year) horizon to the budgetary process.1It will
supportandstrengthenthedeliveryofpublicservicesbythefederalgovernment.MTBFisconsistent
withthecountrysoverallmacroeconomicframeworkandlegalobligationunderSection5and6ofthe
FiscalResponsibilityandDebtLimitationAct2005.
ThemainobjectiveofMTBFistostrengthenthefiscaldisciplinealongwiththealignmentofbudgetary
allocation and expenditures with the policies and priorities of the government and to strengthen the
process of budgeting and budget resource management within the ministries , thus to ensure the
efficiencyandcosteffectivenessoftheuseofpublicsectorresources.
To implement the MTBF, the set of innovations have been introduced into the budgeting procedures
followedinthelineministries.Theseareasfollows:
1. To increase the predictability of the budgeting process, the medium term budgets will be
preparedonathreeyearbasisi.e.,fortheyearimmediatelyaheadtobeappropriated,andfor
twoouteryears.
2. Modifications to the formats for budget preparation which required a shift towards a more
plannedapproach.
3. TheMTBFprocessalsosawthedevelopmentofadedicatedsoftwareapplicationtocapturethe
information prepared by ministries during the preparation of the MTBF budget estimates,
includingtheinformationonoutputs.
4. Thepreparationoftheoverallmediumtermbudgetestimatesinadocumentwhichsetoutthe
higherlevelobjectivesoftheministryandthepurposesforwhichfundingisrequired.
Thisnewbudgetingsystemwillhelpplannersandmanagerstothinkthroughlogicoftheirinterventions
and how they relate to the ministrys overall objectives. However, MTBF procedures for budget
preparationrequireafurtherroundofmodificationsinordertoderivethefullbenefitsofthisapproach.
Although,importantmodificationstotheMTBFbudgetpreparationhavealreadybeenintroduced,this
willcontinuein201011.Thesemodificationsarebasedonananalysisoftheexperiencetodatewith
the implementation of the MTBF with the aim of strengthening the contribution of the MTBF to the
widerobjectiveofmodernizationofthebudgetaryprocess.
MajormodificationtotheMTBFbudgetpreparationimplementedwitheffectfrom200910includethe
following:
Introductionofbudgetceilingsforallfederalministries.
Strengtheningthestrategicprocessofbudgetpreparationineachfederalministry.
Firststeptowardsresultbasedbudgeting
Clearidentificationofthecostofservices(outputs)tobedelivered.
PreparationofMediumTermBudgetestimatesforServiceDelivery(GREENBOOK).
Guidelines for preparing Medium term Budget (2010-2013), Budget Wing, Finance Division.
63
TABLE 4.1
FEDERAL GOVERNMENT OVERALL BUDGETARY POSITION
(Rs Million)
Fiscal Year/
2008-09
Item
2009-10
(B.E)
A. REVENUE
FBR Tax Revenue (1 +2)
1
Direct Taxes
Indirect Taxes
1,157,002
1,380,000
440,271
565,600
716,731
814,400
i.
Customs
148,382
162,200
ii.
Sales Tax
452,294
499,400
iii.
Federal Excise
116,055
152,800
454,885
483,709
1,739,497
2,007,207
Non-Tax Revenue
Gross Revenue Receipts **
B. EXPENDITURE
Current Expenditure*
1,536,441
1,723,863
i.
Defence
329,902
342,913
ii.
Interest
637,790
647,104
iii.
Grants
154,927
366,737
iv.
Economic Affairs
136,553
84,926
vi.
Other
245,790
232,130
Development Expenditure (PSDP)

Total Expenditure**
308,301
406,000
1,844,742
2,146,952
Source: Budget Wing, Finance Division, Islamabad

B.E.- Budget Estimates
@ : Includes Law and Order, Social, Economic and Community Services
* : Current expenditure includes earthquake related spendings
** : Includes other categories not shown here
TABLE 4.2
SUMMARY OF PUBLIC FINANCE (CONSOLIDATED FEDERAL AND PROVINCIAL GOVERNMENTS)
Fiscal Year/
Item
Total Revenues (i+ii)
Federal
Provincial
i) Tax Revenues
Federal
Provincial
ii) Non-Tax Revenues
Federal
Provincial
Total Expenditures (a+b+c)
a) Current
Federal
Provincial
b) Development (PSDP)
c) Net Lending to PSE's
d) Statistical Discrepancy
Overall Deficit
Financing (net)
External (Net)
Domestic (i+ii)
i) Non-Bank
ii) Bank
iii) Privatization Proceeds
Memorandum Item
GDP (mp) in Rs. Billion
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
720,800
673,600
47,200
555,800
534,000
21,800
165,000
139,600
25,400
898,200
791,700
599,800
191,900
129,200
-22,700
3,200
-180,600
180,600
113,000
67,600
119,500
-55,600
3,700
794,000
741,000
53,000
611,000
583,000
28,000
183,000
158,000
25,000
956,000
775,000
557,000
218,000
161,000
20,000
-32,000
-130,000
130,000
-5,900
135,900
61,000
63,690
11,210
900,014
842,900
57,114
659,410
624,700
34,710
240,604
218,200
22,404
1,116,981
864,500
664,200
200,300
227,718
24,763
0
-216,967
216,988
120,432
96,556
8,050
60,179
28,327
1,076,600
992,200
84,400
803,700
766,900
36,800
272,900
225,300
47,600
1,401,900
1,034,700
789,100
245,600
365,100
2,100
-86,307
-325,300
325,200
148,900
176,300
8,100
70,900
97,300
1,297,957
1,215,730
82,227
889,685
852,866
36,819
408,272
362,864
45,408
1,799,968
1,375,345
973,130
402,215
433,658
-9,035
-124,510
-377,501
377,501
147,150
230,351
56,905
101,982
71,464
1,499,380
1,380,599
118,781
1,050,696
1,009,902
40,794
448,684
370,697
77,987
2,276,549
1,853,147
1,416,015
437,132
451,896
-28,494
0
-777,169
777,169
151,311
625,858
104,302
519,906
1,650
1,850,901
1,721,028
129,873
1,204,670
1,158,586
46,084
646,231
562,442
83,789
2,531,308
2,041,570
1,495,873
545,697
480,282
6,911
2,545
-680,407
680,407
149,651
529,466
223,846
305,620
1,290
4,876
5,641
6,500
2009-10
(B.E)
2,155,387
1,990,387
165,000
1,593,497
1,523,497
70,000
561,890
466,890
95,000
2,877,439
2,260,963
1,670,963
590,000
606,000
10,476
0
-722,052
722,051
331,618
390,434
246,287
144,147
19,351
(Rs Million)
% Change
2009-10/
2008-09
16.5
15.7
27.0
32.3
31.5
51.9
-13.1
-17.0
13.4
13.7
10.7
11.7
8.1
26.2
7,623
8,673
10,243
12,739
14,668
15.1
(As Percent of GDP at Market Price)
Total Revenue
14.8
14.1
13.8
14.1
15.0
14.6
14.5
14.7
Tax Revenue
11.4
10.8
10.1
10.5
10.3
10.3
9.5
10.9
Non-Tax Revenue
3.4
3.2
3.7
3.6
4.7
4.4
5.1
3.8
Expenditure
18.5
16.9
17.2
18.4
20.8
22.2
19.9
19.6
Current
16.2
13.7
13.3
13.6
15.9
18.1
16.0
15.4
Development
2.2
3.2
3.9
4.8
4.9
4.4
3.8
4.1
Overall Deficit Incl. E.quake Exp.
3.7
2.3
3.3
4.3
4.4
7.6
5.3
4.9
B.E : Budget Estimate
: Due to change of base of GDP to 1999-2000 prior years are not comparable
TABLE 4.3
CONSOLIDATED FEDERAL AND PROVINCIAL GOVERNMENT REVENUES
(Rs Million)
% change
2009-10/
2008-09
Fiscal Year/
Item
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
(B.E)
Total Revenue (I+II)
720,800
793,700
900,014
1,076,600
1,297,957
1,499,381
1,850,901
2,155,387
Federal
673,600
743,600
842,900
992,200
1,215,730
1,380,600
1,721,028
1,990,387
15.7
Provincial
47,200
50,100
57,114
84,400
82,227
11,878
129,873
165,000
27.0
I. Tax Revenues (A+B)
555,800
611,000
659,410
803,700
889,685
1,050,696
1,312,227
1,593,497
21.4
534,000
583,000
624,700
766,900
852,866
1,009,902
1,266,143
1,523,497
20.3
51.9
Federal
Provincial
16.5
21,800
28,000
34,710
36,800
36,819
40,794
46,084
70,000
157,886
171,188
186,473
224,147
337,639
391,350
440,271
565,600
28.5
151,976
164,497
176,930
215,000
334,168
387,563
440,271
565,600
28.5
5,910
6,691
9,543
9,147
3,471
3,787
397,914
439,812
472,937
579,553
552,046
659,346
844,696
1,027,897
21.7
3. Excise Duty
45,437
47,538
60,813
58,702
74,026
86,549
119,517
152,800
27.8
Federal
44,002
45,823
58,670
55,000
71,575
83,594
116,055
152,800
Provincial
1,435
1,715
2,143
3,702
2,451
2,955
3,462
4. Sales Tax*
195,138
220,607
235,533
294,600
309,228
385,497
452,294
499,400
A. Direct Taxes (1+2)

1 Federal
2 Provincial
B. Indirect Taxes
(3+4+5+6+7)
31.7
-100.0
10.4
5. Taxes on International Trade
68,835
90,940
117,243
138,200
132,200
150,545
148,382
162,200
9.3
6. Surcharges*
68,230
61,381
26,769
50,800
64,546
35,178
126,026
141,937
12.6
6.1 Gas
21,358
16,770
16,165
26,300
34,888
20,708
14,015
29,937
113.6
6.2 Petroleum
46,872
44,611
10,604
24,500
29,658
14,470
112,011
112,000
0.0
7. Other Taxes **
20,274
80,727
59,348
88,051
36,592
36,755
20,408
183,560
799.5
7.1 Stamp Duties
6,631
10,329
10,573
10,211
10,268
11,123
11,290
-100.0
7.2 Motor Vehicle Taxes
3,893
4,722
5,749
7,107
7,719
4,975
7,534
-100.0
7.3 Foreign Travel Tax*
4,054
4,751
2,050
3,593
3,681
356
7.4 Others
II. Non-Tax Revenues
Federal
Provincial
5,696
60,925
40,976
67,140
14,924
20,301
1,584
1,560
-1.5
165,000
182,700
240,604
272,900
408,272
448,685
454,885
561,891
23.5
139,600
160,600
218,200
225,300
362,864
370,698
454,885
466,891
2.6
25,400
22,100
22,404
47,600
45,408
77,987
83,789
95,000
13.4
* : Revenues under these heads are exclusively Federal

** : Mainly includes Provincial Revenues
TABLE 4.4
CONSOLIDATED FEDERAL AND PROVINCIAL GOVERNMENT EXPENDITURES
Fiscal Year/
Item
Current Expenditure
Federal
Provincial
Defence
Interest
Federal
Provincial
Current Subsidies
Federal
Provincial
Gen. Administration*
Federal
Provincial
All Others**
Development Expenditure
Net Lending to PSEs
Total Expenditure
Memorandum Items:
Current Expenditure
Defense
Interest
Current Subsidies
General Administration
All Others
Development Expenditure
Total Expenditure
2001-02
2002-03
2003-04
700,200
524,600
175,600
149,254
275,292
245,763
29,529
29,221
25,488
3,733
91,024
56,300
34,724
155,409
126,250
-200
826,250
791,700
599,800
191,900
159,700
227,810
199,816
27,994
57,114
50,000
7,114
100,210
60,900
39,310
246,866
129,200
-22,700
898,200
775,000
557,000
218,000
184,904
222,387
196,261
26,126
67,920
62,500
5,420
120,023
75,500
44,523
179,766
161,000
20,000
956,000
8.4
13.8
9.9
0.7
-9.9
15.9
40.6
15.1
13.1
7.0
-17.2
95.5
10.1
58.8
2.3
8.7
-2.1
15.8
-2.4
18.9
19.8
-27.2
24.6
6.4
Current Expenditure
84.7
88.1
81.1
Defense
18.1
17.8
19.3
Interest
33.3
25.4
23.3
Current Subsidies
3.5
6.4
7.1
General Administration
11.0
11.2
12.6
All Others
18.8
27.5
18.8
Development Expenditure@
15.3
11.9
18.9
Total Expenditure
100.0
100.0
100.0
* : Also includes Law & Order, Social, Economic and Community Services.
** : Includes mainly Provincial Expenditures.
@ : Include Net Lending
2004-05
2005-06
2006-07
2007-08
2008-09
(Rs million)
2009-10
(B.E)
2,260,963
1,670,963
590,000
342,913
663,923
647,104
16,819
161,843
131,914
29,929
355,109
355,109
0
737,175
606,000
10,476
2,877,439
864,500
1,034,700
1,375,345
1,853,147
2,041,573
664,200
789,100
973,130
1,416,015
1,495,876
200,300
245,600
402,215
437,132
545,697
211,717
241,063
249,858
277,300
329,902
234,752
260,021
386,916
509,574
656,259
210,196
237,119
368,797
489,681
637,790
24,556
22,902
18,119
19,893
18,469
66,673
101,238
76,039
423,685
225,610
57,800
86,300
74,010
407,485
220,352
8,873
14,938
2,029
16,200
5,258
130,531
163,263
225,120
368,159
349,994
81,400
103,100
146,017
175,700
349,994
49,131
60,163
79,103
192,459
0
220,827
269,115
437,412
274,429
479,808
227,718
365,100
433,658
451,896
480,282
24,763
2,100
-9,035
-28,494
6,911
1,116,981
1,401,900
1,799,968
2,276,549
2,531,308
(Percent Growth over preceding period)
11.5
19.7
32.9
34.7
10.2
10.7
14.5
13.9
3.6
11.0
19.0
3.9
5.6
10.8
48.8
31.7
28.8
1.2
-1.8
51.8
-24.9
457.2
-46.8
-28.2
8.8
25.1
37.9
63.5
-4.9
1.5
22.8
21.9
62.5
-37.3
74.8
4.8
41.4
60.3
18.8
4.2
6.3
26.2
16.8
25.5
28.4
26.5
11.2
13.7
As % of Total Expenditure
77.4
73.8
76.4
81.4
80.7
78.6
19.0
17.2
13.9
12.2
13.0
11.9
21.0
18.5
21.5
22.4
25.9
23.1
6.0
7.2
4.2
18.6
8.9
5.6
11.7
11.6
12.5
16.2
13.8
12.3
19.8
19.2
24.3
12.1
28.6
26.4
22.6
26.2
23.6
18.6
19.2
21.1
100.0
100.0
100.0
100.0
100.0
100.0
Source: Budget Wing, Finance Division
TABLE 4.5
DEBT SERVICING
Fiscal Year / Item
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10*
A. Interest Payments
227,810
222,387
234,752
260,021
386,916
509,574
656,259
485,319
A.1 Federal
199,816
196,261
210,196
237,119
368,797
489,681
637,790
473,517
Interest on Domestic Debt
160,481
154,817
170,466
195,006
318,939
430,189
558,729
428,512
Interest on Foreign Debt
39,335
41,444
39,730
42,113
49,858
59,492
79,061
45,005
27,994
26,126
24,556
22,902
18,119
19,893
18,469
11,802
B. Repayment/Amortization of Foreign Debt
A.2 Provincial
56,304
127,276
57,702
81,394
69,615
68,662
224,576
166,700
C. Total Debt Servicing (A+B)
284,114
349,663
292,454
341,415
456,531
578,236
880,835
652,019
MEMORANDUM ITEMS
(As Percent of GDP)
Interest on Domestic Debt
3.3
2.7
2.6
2.6
3.7
4.2
4.4
2.9
Interest on Foreign Debt
0.8
0.7
0.6
0.6
0.6
0.6
0.6
0.3
Repayment/Amortization of Foreign Debt
1.2
2.3
0.9
1.1
0.8
0.7
1.8
1.1
Total Debt Servicing
5.8
6.2
4.5
4.5
5.3
5.6
6.9
4.4
*July 2009-March 2010
TABLE4.6
INTERNALDEBTOUTSTANDING(ATENDOFPERIOD)
(Rsmillion)
FiscalYear/
TypeofDebt
199899
199900
200001
200102
200203
200304
200405
200506
200607
200708
200809
%Change
200910/
200809
200910*
PermanentDebt
317,402
325,569
349,212
424,767
468,768
570,009
526,179
514,879
562,540
616,766
685,939
779,182
13.6
FloatingDebt
561,590
647,428
737,776
557,807
516,268
542,943
778,163
940,233
1,107,655
1,637,370
1,903,487
2,299,737
20.8
UnfundedDebt
573,945
671,783
712,010
792,137
909,500
914,597
873,248
881,706
940,007
1,020,379
1,270,513
1,411,690
11.1
1,452,937
1,644,780
4,490,609
16.3
Total
2,938,379
#REF!
1,798,998
1,774,711
1,894,536
2,027,549
2,177,590
2,336,818
4,209,873
4,452,654
4,875,648
5,640,580
6,499,782
7,623,205
2,610,202
8,673,007
3,274,515
10,243,000
3,859,939
12,739,000
14,668,000
(PercentShareinTotalDebt)
MemorandumItems:
PermanentDebt
21.8
19.8
19.4
23.9
24.7
28.1
24.2
22.0
21.6
18.8
17.8
17.4
FloatingDebt
38.7
39.4
41.0
31.4
27.3
26.8
35.7
40.2
42.4
50.0
49.3
51.2
UnfundedDebt
39.5
40.8
39.6
44.6
48.0
45.1
40.1
37.7
36.0
31.2
32.9
31.4
TotalDebtas%ofGDP(mp)
49.4
42.7
39.9
38.9
35.9
33.5
30.7
30.1
32.0
30.3
30.6
*endMarch2010
#REF!
Source:BudgetWing,FinanceDivision
MonetarySector
The past two years have witnessed economic developments unprecedented in scale and gravity, with
largeramificationsfortheconductofpublicpolicy.Ontheonehand,theglobaleconomywasbuffeted
bythemostsevererecessionsincetheGreatDepression.Ontheother,worldfoodandenergyprices
skyrocketed, leading to grave consequences for the poor and vulnerable, especially in developing
countries.Whileglobalcommoditypriceshaveeasedconsiderablyfromtheirrecentlifetimepeaks,they
remainelevated.
The initial response of most governments was to fight off recession with large fiscal stimuli and
monetaryeasingandotheruntestedmeasureswithregardtoliquidityinjectionstoensuremoneyand
credit markets did not seize up. The fear of deflation in many major economies lent a degree of
congruencetofiscalandmonetarypolicy.Withmanycountriesfinallyappearingtopullbackfromthe
worstofthecrisis,theimpactofpricedevelopmentsinglobalcommoditymarketssince2006appearsto
haveworkeditswayintoinflationarypressure.Theglobalgaugeforfoodpriceinflation,theFoodand
Agricultural Organisations (FAO) Food Price Index was up over 20 percent earlier in 2010, while food
inflationhastraversedhistoricallevelsinmanycountries,includingPakistanandIndia.
This backdrop presents a policy dilemma. While growth has returned in many economies, though
unevenly across regions, it remains fragile. This fragility is evident from ongoing developments in the
EurozonewithrespecttotheGreekdebtcrisis.Whileexitpoliciesmayappearprematureundersuch
circumstances,thereturnofinflationinsomecases,andinflationaryexpectationsinothers,meansthat
policymakersacrossabroadspectrumofcountriesandregionsaretreadingathinline.
In Pakistans case, policymakers are grappling with a similar dilemma. The growth recovery in the
economywitnessedin200910isstillrelativelyweak,andremainsfragile.Ontheotherhand,inflation
remains elevated and has displayed considerable persistence. The danger of a high headline rate of
inflation is that if it displays persistence, it could influence expectationforming more than other
measures such as core inflation, which the central bank relies on to gauge the appropriateness of
monetarypolicy.
5.2.RecentMonetaryandCreditDevelopments
DevelopmentsinthemonetarysectorduringJulytoAprilFY10canbesummedupasfollows:
x A net retirement of bank credit by the private sector occurred in the first few months of the
fiscal year, followed by a fairly strong uptick in subsequent months. As of third week of April,
utilisation of bank credit by the private sector had increased to 4.8%, as against 1.6% in the
correspondingperiodof200809.Partofthesubduedincreaseisaccountedforbyasharprise
in provisioning by banks for nonperforming loans, which is deducted from gross lending to
arriveatthereportednetfigureofborrowing.
x However, the rise in private sector credit demand is concentrated in two sectors: textiles and
energy.Thetrendintheformerisinlinewithimprovingexternaldemandforyarn,whileinthe
65
case of the latter, the circular debt issue has accounted for a large increase in borrowing
requirementsfortheaffectedcompanies.
5.2a.GovernmentBankBorrowing
The net bank credit availed by the government for budgetary support as well as financing its
commodityoperationsamountedtoRs.286.4billionduringJulyApril2010,againstRs.239.5billion
duringthesameperiodlastyear.
286.4
199
195.7
73
90.7
Q1 FY 10
Jul-April10
186
131
134.2
272
316
Total borrowings
From SBP
From Scheduled banks
-36
105.3
239.5
350
300
250
200
150
100
50
0
-50
-100
314
278
Fig5.1:GovernmentBudgetaryBorrowings
Jul-20Dec 09
Jul-April 09
FY-09
Government budgetary borrowing from the banking system during year to date FY10 has remained
higher compared to the corresponding period of FY09, rising sharply from October 2009. This has
occurred mainly due to a pernicious combination of rising fiscal spending, and lower availability of
externalfinancing.Theshortfallonthiscountovershadowedhigherinflowsfromnonbanksources,as
wellasrecoursetousingaportionofIMFdisbursements(upto40%eachofthreetranches)asbridge
financing.
5.2bCommodityFinance
Commodity finance refers to advances provided to government, public sector corporations or private
sectorfortheprocurementofcommoditiessuchascotton,rice,wheat,sugar,fertilizeretc.InPakistan,
thegovernmentscommodityoperationsarecarriedthroughstateownedentities,suchasPASSCOand
TCP.Theseentitiesborrowcommerciallytofinancetheirprocurementoperations,withtheborrowing
guaranteedbythegovernment.
Fig5.2:CommodityFinance
CommodityFinance
RsBillions
400
300
200
100
0
2005
2006
2007
2008
2009
2010(April23)
66
MonetarySector
ThefinancingforcommodityoperationspeakedatRs.336.2billioninJunelastyearmainlybecauseof
record wheat procurement of 9.2 million tons by different federal and provincial departments and
agencies.Acombinationofunprecedentedscaleoftheprocurementandthesubstantialincreaseinthe
domesticwheatsupportpricehasledtoasharpspikeintheoutstandingstockunderthishead.
Whilefinancingforcommodityoperationsisusuallyselfliquidating,tocompoundtheproblem,thefact
that the procurement price of domestic wheat has risen substantially higher than the international
price,hasmeantthatgovernmentagencieshavebeenabletoretireonlyaportionoftheoutstanding
loans availed for commodity operations. Stock of commodity finance fell by 56.1 billion during
JulyApril2010comparedtonetincreaseofRs.47.2billioninthecorrespondingperiodlastyear.While
the stock of wheat financing declined to Rs. 200.6 billion by end February from its peak of Rs. 276.8
billion.StillthestockofwheatfinanceishigherthantheaverageofthepastthreeyearsendFebruary
levelofRs.53.8billion.
5.2cNetForeignAssets(NFA)
TheNFAofthebankingsystemduringJulyAprilFY10hasincreasedbyRs.49.7billionafterregisteringa
significant decline of Rs. 236.8 billion during the same period of FY09. The increase in NFA is mainly
contributedtobybudgetarysupportof$745million(approx.Rs.62billion)fromtheIMF.Sharplylower
outflowsonaccountofimportpaymentshaveprovidedmajorsupporttotheforeigncurrencyreserves
position.
Other factors that have contributed are the persistent increase in worker remittances, and the sharp
unexpectedriseininflowsunderportfolioinvestment.
Fig5.3:NetForeignAssets
100.0
50.0
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
JulMayFY08
FY08
JulDecFY09
FY09
JulDecFY10 JulAprilFY10
5.2d.Inflation
Afterdecliningsharplyfromearlycalendar2009,CPIinflationreachedarecenttroughof8.9%yearon
yearinOctober2009.Thisoccurredpartlyduetoafavourablebaseeffect,andpartlyduetosubdued
globalpricechangesin commodities. However,sinceOctober,inflationin theeconomy haspickedup
sharply, on account of a number of adverse factors. Adjustments in administered prices of electricity
67
tariffs,domesticpetroleumproducts,gas,inconjunctionwiththelargeincreaseinthesupportpriceof
wheathavebeenthemaindriversoftherefuellingofinflationintheeconomysincelatelastyear.
Fig5.4:InflationTrends
General(CPI)
CoreInflation
30
Percents
25
20
15
10
5
0
5.3Monetarypolicystance
In response to several years of excessive money
supply growth and fiscal profligacy, SBP reversed
course of its monetary policy from end2007
onwards. Initially, the stance was modified very
incrementally (see Table 5.1), but in the face of
persistent excessive demand pressures in the
economy, SBP began a rather more aggressive
tighteningphasefromMay2008.
Table5.1: SBPDiscountRate
w.e.f
22Jul06
1Aug07
2Feb08
23May08
30Jul08
13Nov08
21Apr09
17Aug09
25Nov09tilldate
Policyrate
9.5
10
10.5
12
13
15
14
13
12.5
Source:SBP
The policy discount rate and the Cash Reserve

Requirement (CRR) and Statutory Liquidity
Requirement (SLR) were raised throughout calendar
2008.ThemeasuresannouncedbySBPinMay2008includedi).Anincreaseof150bpsindiscountrate
to12percent,ii).Anincreaseof100bpsinCRRandSLRto9percentand19percentrespectivelyfor
banking institutions, iii). Introduction of a margin requirement for the opening of letter of credit for
imports(excludingfoodandoil)of35percentand,iv).Establishmentofafloorof5percentontherate
ofreturnonprofitandlosssharingandsavingaccounts.
Afterpeakingat15%inNovember2008,duringthepeakofthebalanceofpaymentscrisis,thecentral
bankhaseasedthepolicydiscountrateinstepstothecurrent12.5%,inresponsetoagradualeasingof
both headline as well as core inflation, and the containment of aggregate demand pressures in the
economy.
In real terms, however, with yearonyear CPI inflation at over 13%, the current stance of monetary
policywouldappeartobeneutral,ratherthantight.
68
MonetarySector
Fig5.5:RealInterestrate
5
4
3
2
1
0
1
2
Jul09
Aug09
Sep09
Oct09
Nov09 Dec09
Jan10
Feb10 Mar10
Nonetheless, an appropriate monetary policy stance since 2008, in conjunction with rationalization of
fiscalsubsidies,havecontributedtoalargemeasureofmacroeconomicstability.
However, a nascent revival in economic activity, on the one hand, and SBPs concerns about rising
inflationarypressuresduetohigheroilpricesandelectricitytariffadjustments,ontheother,meansthat
thecentralbankisalsofacingapolicydilemmaindeterminingthecourse,timing,paceandmagnitude
ofanychangestoitsstance.
5.3DevelopmentsinMonetaryIndicators
TheYoYgrowthinbroadmoney(M2)increasedsharplyby5.5percentduringJulyApril2010compared
to 1.5 percent during the same period last year. This rise is mainly from YoY increase in Net foreign
assets(NFA)ofthebankingsectorasgrowthinnetdomesticassets(NDA)ofthebankingsystemslowed
to5.1percentYoYbasisbyApril,2010.
Table5.2:MonetaryIndicators(GrowthRates)
Indicators
FY05
FY06
Net Bank Credit to Government

13.9
11.6
Sector
BankCredittoPrivateSector
34.4
23.5
NetDomesticAssets(NDA)
22.2
16.1
NetForeignAssets(NFA)
9.2
11.5
MoneySupply(M2)
19.1
15.1
*Pertainsto23AprilforFY10and25AprilforFY09
FY07
FY08
FY09
Jul25April*
200809
11.1
63
34.7
18.9
17.3
14.2
38.7
19.3
16.5
30.6
32.2
15.3
0.7
14.9
22.5
9.6
(Percent)
Jul23April*
200910
11.3
1.6
4.8
7.6
5.1
35.5
9.6
1.4
5.5
IMFhasincreasedtheSDRquotaallocationforallofitsmembercountries.Consequently,ithasnotonly
changed the composition of M2 growth, but the NFA of the banking system has also been increased
sharply.
Similarly,thesharpaccelerationinM2growthisalsoexplainedbyanuptrendinseasonalcreditdemand
fromtheprivatesector.NFAoftheSBPincreasedbyRs.49.7billion,whileNetdomesticassets(NDA)
wereincreasedtoRs.233.9billionduringJulApril2010comparedtoRs.304.6billionduringJulyApril
2009.ThecontractioninNDAwasmainlyduetotheaccountingadjustmentofspecialSDRallocationby
69
theIMFinAugust2009.FY10hasalsowitnessedasignificantincreaseincurrencyincirculation.
5.5AnalysisofMonetaryAggregates
Within the bankingsector,borrowingsfromthe commercialbanksfellOctoberonwards.Mainreason
wasthatthegovernmentlargelyadheredtoitspreauctiontargetsthatweresetlowerforQ2FY10in
anticipation of revenue receipts such as coalition support funds. Consequently reliance on SBP
borrowing increased during OctoberApril 2010. Indeed the governments increased resource to SBP
borrowing was made possible due to the available room for financing resulting from disciplined
borrowing in the first quarter. However, in the absence of sufficient commercial bank borrowings,
government borrowings from the central bank had exceeded its quarterly limits by the end of third
weekofDecember2009.
Moreover,inthelastfewTbillauctions,bankstartedtolockintoshortertenorgovernmentpapers.This
behaviourpossiblyreflectsmarketanticipationforanincreaseininterestrateinthewakeofrenewed
inflationary pressures and liquidity constraints. While the evidence suggest that increased biding by
commercialbanks,particularlyforthreemonthpapers,alsoreflectshighdemandfrommoneymarket
funds.
ByendSeptember2009,governmentretireditsdebtwithSBPbyusingtheproceedsfromthetransfer
ofSBPprofitstogovernmentaccountsandborrowingfromcommercialbanksbyissuingRs.40.5billion
worthofTbillsinthesamemonth.ConsequentlythestockofMRTBswithSBPdeclinedtoRs.1010.8
billionbytheendofSeptember2009comparedtoRs1256.6billionatendSeptember08.
The credit of Rs. 76.7 billion to the public sector enterprise (PSEs), and decline in government
borrowings worth Rs. 56.1 billion for commodity operations has contributed Rs 233.9 billion in NDA
during JulyApril FY10 compared to an increase of Rs. 304.6 billion during the same period last year.
Credit to PSEs increased to just Rs 76.7billion during JulyApril FY10 against an increase of Rs. 142.2
billioninthesameperiodlastyear.Thisincreasecausedbyhighcreditdemandfromapowerholding
company in September 2009, a few POL related PSEs have availed the cushion for fresh lending after
settlement of part of their outstanding bank credit with the issuance of PPTFCs and borrowing
requirementfromapublicsectorsteelmilltofinanceitsunfundedLCimportsofrawmaterial.
BuildinguponthediscussioninSection5.2bsomeoftheothermonetaryaggregateswillbediscussed
here.
5.5a.NetDomesticAssets
Net domestic assets of the banking system registered a decline by 5.1 percent during JulyApril 2010
comparedto7.6percentduringthesameperiodlastyear.TheslowpaceinNDAofthebankingsystem
wasduetothecontractionindomesticdemand.Moreover,fragiledemandforprivatesectorcredit,low
budgetaryborrowingandslowercreditofftakeundercommodityfinancehadrestrictedtheexpansion
inNDAduringJulyApril10.Onquarterlybasis,duringQ1FY10,NDAhadanegativecontributiontoM2
growth.Howeverthereafter,NDAexperiencedasharpincrease,mainlyduetoastrongriseinprivate
sectorcreditandincreasesrecourseofthegovernmenttoborrowfromthebankingsystem.
5.5b.CredittoPrivateSector(net)
Duetotheslightlyimprovedindustrialandbusinessactivity,bankscautiouslyrestartedlendingtothe
privatesectorfollowinganeasinginclassificationofbadloans.TherewasanincreaseofRs.24billion
70
MonetarySector
fromNovember30thtotheendoftheDecember2009ascreditretirementonnetbasisceasedaftermid
November.CredittoprivatesectorgrewbyRs.138.9billionduringJulyApril2010comparedtoRs.46.9
billionduringthesameperiodlastyear.
Thetrenddeclineinprivatesectorcredit,visiblefortwelveconsecutivemonths,reversedfromOctober
2009onwardsrepresentingrecoveryinaggregatedemandintheeconomyaswellasincreaseinprivate
sectorparticipationincommodityfinance(particularlyforcotton,riceandsugarcane).
Fig5.6GrowthofPrivateSector
FY10
FY09
FY08
FY07
FY06
FY05
FY04
0.0
10.0
20.0
30.0
40.0
Despite the recovery in some macroeconomic indicators, private sector credit offtake is not growing
fastbecauseofhighinterestrates.However,averagelendingrateonentirestockonbankloansstoodat
13.4percentinMarch2010ascomparedto14.4percentinMarch2009,thusitisstillhigh.
Table5.3:Privatesectorcredit(Flows)
Sectors
OverallCredit(ItoV)
I.LoanstoPrivateSectorbusiness
A.Agriculture
B.MiningAndQuarrying
C.Manufacturing
Textiles
D.Electricity,gasandwater
E.Construction
F.CommerceandTrade
G.Transport,storageandcommunications
H.Services
I.OtherPrivateBusiness
II.TrustfundsandNPOs
III.Personal
IV.Others
V.InvestmentinSecuritiesandShares
JulMarch
FY09
58.3
100.5
8.5
1.4
88.4
1.4
22.2
6.8
7.5
2.4
1.0
3.4
2.3
45.7
6.5
12.3
FY10
141
147.7
6.5
1.7
95
32.9
46.6
2
4.3
6.4
2.9
3.8
0.8
35.2
0.8
26.9
(Rs. Billions)
Growth(Percents)
FY09
FY10
2.2
5.3
4.8
6.9
5.4
4
7.6
9.5
7.3
7.7
0.3
6.8
20
30.2
8.6
2.8
3
1.8
2.6
6.6
2.5
6.9
9.5
13.8
15
6.4
10.9
9.7
38.1
9.2
11.6
23.8
71
Table5.4:TargetsandActualDisbursementofAgricultureLoans
ActualDisbursement(RsBillions)
JulyMarch
FY09
FY10
102.9
113.8
74.4
85.2
28.5
28.6
48.9
52.5
45.4
49
3.5
3.5
151.8
166.3
Source:SBP
NameOfBanks
I.TotalCommercialBanks(A+B)
A.MajorCommercialBanks
BPrivateDomesticBanks
II.TotalSpecializedBanks(1+2)
1.ZaraiTaraqiatiBankLimited
2.P.P.C.B
GrandTotal(I+II)
5.5b(i).ConsumerLoans
The consumer loans continued their downward slide with increasing NPLs as banks avoiding the risks
associated with these facilities, the rate of interest on these loans remain high. While inflationary
pressuresandloweconomicactivityrestrainedthepurchasingpoweroftheconsumers.
Table5.5:ConsumerFinancing
(Rs. billion)
JulMarch
ConsumerFinancing
FY09
3.3
19.6
6.8
0.2
24
0.3
53.6
1.HouseBuilding
2.Transporti.e.purchaseofcarsetc
3.Creditcards
4.ConsumerDurables
5.PersonalLoans
6.Others
Total
FY10
5.5
9.1
6.2
0.2
19.7
0.3
40.4
Theconsumercreditcontractedby6.2percentinFY10;howeverithasregisteredamarginalincrease
against the decline of 6.8 percent in FY09. This was compounded by banks cautious behaviour about
grantingloansinviewofdeterioratingcreditqualityandhigherinsolvencyofborrowers.Theconcernon
individualsabilitytorepayloanswasparticularlyapparentinmortgageloansduringFY10.
5.6.MonetaryAssets
The components of monetary assets (M2) include: Currency in circulation, Demand Deposit, Time
Deposit,OtherDeposits(ExcludingIMFA/C,counterpart)andResidentsforeigncurrency.
Table5.6:MonetaryAggregates
Items
A.CurrencyinCirculation
Depositofwhich:
B.OtherDepositswithSBP
C.TotalDemand&TimeDepositsincl.RFCDs
ofwhichRFCDs
MonetaryAssetsStock(M2)A+B+C
EndJune
2008
2009
982,325
1,152,173
4,261
3,702,557
263,430
4,689,143
4,662
3,980,384
280,364
5,137,219
*July25April
200809
1,122,684
(Rsmillion)
July23April
200910
1,289,898
4,821
3,629,433
2,785,98
4,756,938
6,216
4,124,717
330,014
5,420,832
72
MonetarySector
Table5.6:MonetaryAggregates
EndJune
2008
2009
Items
MemorandumItems
Currency/MoneyRatio
20.9
OtherDeposits/Moneyratio
0.1
TotalDeposits/Moneyratio
79
RFCD/Moneyratio
5.6
IncomeVelocityofMoney
2.4
*pertainsto25thAprilforFY09and23rdAprilforFY10
*July25April
200809
(Rsmillion)
July23April
200910
23.6
0.1
76.3
5.9
23.8
0.1
76.1
6.1
22.4
0.1
77.5
5.5
Source:SBP
5.6a.CurrencyinCirculation
DuringJulyApril2010,currencyin circulationdecreasedtoRs.137.7billionascomparedtoRs.140.4
billion during the same period last year. However, the currency in circulation (CIC) as percent of the
moneysupply(M2)hasshownaverysmallincreaseandremainedat23.8inFY10against23.6percent
in FY09 (Table 5.7). FY 10 has witnessed an expansion in broad money, as it increased by 5.5 percent
againstanincreaseof1.5percentduringthesameperiodlastyear.Theincreaseinmoneysupplyshared
bybothcurrencyincirculationanddepositmoney.Fig5.7showsthetrendsinCICaspercentageofM2
andasapercentageofGDP.
5.6b.Deposits
DuringJulyApril2010demandandtimedepositshasincreasedbyRs.144.3billionagainstthedecline
ofRs.73.1billioninFY09.SimilarlyResidentForeignCurrencydeposits(RFCDs)hasincreasedbyRs.49.7
billionascomparedtoRs.15billionsduringthesameperiodlastyear.
TheM2toGDPratioreflectsthedegreeoffinancialdevelopmentintheeconomy.ConsideringM2asa
proxy for the size of the financial sector, a rising M2/GDP ratio indicates that in nominal terms the
financialassetsaregrowingfasterthanthenonfinancialassets.Asanimportantindicatoroffinancial
developmentM2/GDPhasshownarisingtrendsince199900androsefrom36.9percentto47percent
in200607.
CurrencytoM2
Fig5.7:CurrencyinCirculation%M2&GDP
CurrencytoGDP
25
20
15
10
5
0
2005
2006
2007
2008
2009
2010(April)
Source: StateBankofPakistan
73
Table5.7:KeyIndicatorsofPakistan'sFinancialDevelopment
Years
199900
200001
200102
200203
200304
200405
200506
200607
200708
200809
JulyApril
200809
200910
M2/GDP
36.9
36.7
40.0
43.1
44.9
45.1
45.0
46.6
44.7
39.2
37.3
37.0
DD+TD/M2
74.6
75.4
75.4
76.2
76.8
77.6
72.5
74.1
73.3
58.2
70.4
70
DuringJulyApril2010M2/GDPratiohasincreasedto37percentascomparedto37.3percentduringthe
sameperiodlastyear.OntheotherhandanothersignificantratioDD+TD/M2whichrepresentmonetary
depth has shown decreasing trend since 199900 by decreasing from 74.6 percent to 58.2 percent in
200809. However during JulyApril 2010 the ratio has increased by 70 percent as compared to an
increaseof70.4percentduringthecorrespondingperiodofFY09.
Fig5.8WeightedAverageInterestRate
6Months
12Months
15
12
9
6
3
Jun05
Aug05
Oct05
Dec05
Feb06
Apr06
Jun06
Aug06
Oct06
Dec06
Feb07
Apr07
Jun07
Aug07
Oct07
Dec07
Feb08
Apr08
Jun08
Aug08
Oct08
Dec08
Feb09
Apr09
Jun09
Aug09
Oct09
Dec09
Feb10
Apr10
Weighted average lending rate (including zero markup) on outstanding loans stood at 13.4 percent,
whileweightedaveragedepositrate(includingzeromarkup)stoodat6.1percent.
74
MonetarySector
Table5.8:Lending&DepositRates(W.A)%
Jul09
Aug09
Sep09
Oct09
Nov09
Dec09
Jan10
Feb10
Mar10
LR
13.79
13.73
13.67
13.67
13.58
13.49
13.35
13.38
13.40
DR
6.44
6.41
6.29
6.26
6.25
6.14
6.10
6.07
6.10
Spread
7.35
7.32
7.38
7.41
7.33
7.35
7.25
7.31
7.3
Source:StateBankPakistan
Thelendingrateshavedeclinedduringlastoneyearduetothecontinuationoftheeasymonetarypolicy
stance. Banks have also cut the deposit rates from its peak level of 6.7 percent in March 2009 to 6.1
percentinMarch2010,inordertoavoidfallintheirprofits(Fig5.9).
Percents
Fig5.9:Lending&DepositRates
LR
DR
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
5.7PakistansFinancialSector:2010
Pakistans financial system has grown in recent years, still there is an enormous potential for growth.
The system remains relatively small in relation to the economy, when compared with other emerging
countriesinAsiaandaroundtheworld.Thisimpliesthatmanyfinancingneedscannotbemetandthat
muchofthecountryseconomicpotentialremainsunfulfilled.
5.7aCommercialBanks
The asset base of the banking system and its key elements posted strong growth; particularly the
depositbaseandlendingtoprivatesector,whichconsistentlydeclinedoverfirstthreequartersofCY09
showedthesignsofrecovery.However,theassetmixofthebankingsystemfurthershiftedtowardsthe
investment as banks continued to invest heavily in government papers and bonds of Public Sector
Enterprises(PSEs).
75
AsonDecember2009,totalnumberofbranchesofbanksstoodat9,522ascomparedto9,146on30
June 2009. Hence there is an increase of 376 branches in six months of 200910. Assets of all banks
showedanetexpansionofRs441.9billionsduringthefirstsixmonthsofFY10andstoodatRs6,529
billions.Hencetheassetbaseofthebankingsystemincreasedby7percentoverthequarter.
Deposits of the system, after remaining lacklustre during the first three quarters of CY09, posted
heateninggrowth.TotaldepositsofallbanksregisteredanincreaseofRs223.4billionsinthefirstsix
monthsofFY10,andreachedatRs4787billions.Ontheassetside,lendingportfolioalsoincreased.Net
investment increased by Rs 344.7 billions during the first six months of FY10 mainly contributed by
privatebanksamountingtoRs1375.6billions.Thepublicsectorsdemandforbankcreditremainedhigh
formeetingbudgetaryrequirementsandresolvingtheissuesofPSEsintercorporatereceivables(Table
5.9).
Table5.9:HighlightsoftheBankingSystem
2005
2006
TotalAssets
3,660
4,353
Investments(net)
800
833
Advances(net)
1,991
2,428
Deposits
2,832
3,255
Equity
292
402
ProfitBeforeTax(PBT)
94
124
ProfitAfterTax(PAT)
63
84
NonPerformingLoans
177
177
NonPerformingLoans(net)
41
39
BaselI
CapitalAdequacyRatio
11.3
12.7
(allbanks)
2007
5,172
1,276
2,688
3,854
544
107
73
218
30
12.3
2008
5,627
1,080
3,183
4,217
563
63
43
359
109
Sep09
6,105
1,593
3,119
4,483
641
70
42
422
128
BaselII
12.3
14.3
(Rs. Billions)
Dec09
6,529
1,753
3,248
4,787
662
91
54
432
125
14.1
Strong growth in assets of the banking system along with an increase in private sector lending and
investment in PSEs bonds during the first six months of FY10 led to a slight contraction in baseline
indicatorsofsolvency.However,theratioremainshighandinthesatisfactoryrange.Moreover,riskto
solvency from heightened credit risk lowered on the back of deceleration in loans infection rate and
adequateprovisioningbybanksforloanlosses.
Fig5.10CapitalAdequacyRatio(percent)
CapitalAdequacyRatio(percent)
15
14.5
Percents
14
13.5
13
12.5
12
11.5
76
MonetarySector
During the Q2FY10 capital adequacy ratio (CAR) dropped by 0.2 percentage points and stood at 14.1
percent against 14.3 percent in September 2009, because banks made significant lending to private
sector and invested heavily in bonds of PSEs, leading to relatively greater increase in risk weighted
assets(RWA).Similarly,highergrowthinassetbasevisviscapitalbasecontractedthecapitaltototal
assetsratioby0.4percentagepointsto10.1percent.
5.7bIslamicBank
ThegrowthmomentuminIslamicbankinghasremainedexceptionallystrongworldwide,andthistrend
is shared both at local and global Islamic Financial Services Industry (IFSI). Despite the remarkable
achievement during the past few years, still the Islamic financial service industry (IFSI) needs careful
nurturinganddevelopmenttomakeasignificantimpactonthefinanciallandscapeofthecountry.
Table5.10(a):IslamicBanks
AssetsoftheIslamicbanks
DepositsoftheIslamicBanks
ShareinBanksAssets
ShareinBankDeposits
CY04
44.1
30.2
1.45%
1.26%
(RsBillion)
CY05
CY06
CY07
CY08
CY09(Dec)
71.5
119.3
205.9
276.0
366.3
49.9
83.7
147.4
201.6
282.6
1.95%
2.79%
3.98%
4.90%
5.60%
1.75%
2.62%
3.82%
4.78%
5.90%
Source:IslamicBankingDepartment,StateBankofPakistan
Despite the robust growth in most of the indicators of Islamic banking during CY09, there were some
slippages in asset quality and a slight decline in financing billion at the end of December 2009 and
reflected a share of 5.6 percent in banking assets (Table 5.10.a). While the total deposits of Islamic
banksreachedtoRs282.6billionsfromRs30.2billioninCY04,thusitcontributedto5.9percentinbank
depositsascomparedto1.3percentonlyinCY04.
Table5.11(b):FinancingProductsbyIslamicbanks%age
ModeofFinancing
CY04
CY05
Murabaha
57.4
44.4
Ijara
24.8
29.7
Musharaka
1
0.5
Mudaraba
DiminishingMuskaraka
5.9
12.8
Salam
0.7
0.6
Istisna
0.4
1.4
Qarz/Qarzehasna
Others
9.8
12.1
CY06
48.4
29.7
0.8
14.8
1.9
1.4
3
CY07
44.5
24
1.6
0.3
25.6
1.4
1
CY08
CY09(Dec)
36.5
42.3
22.1
14.2
2.1
1.8
0.2
0.4
28.9
30.4
1.8
1.2
2.9
6.1
1.6
5.4
3.6
ThehighgrowthmomentuminIBIsobservedinthelastfewyearsstabilizedtoamoresustainablepace
inCY08,duringwhichtheoverallbankingindustryfacedwithaplethoraofchallengesemanatingfrom
itsoperatingenvironment.
Intermsofmodesoffinancing,gradualstandardizationinshariahcomplaintprincipleshavehelpedIBIs
inachievinganincreaseddegreeofdiversificationintheutilizedmodesoffinancing.Accordingtothe
table 5.11 (b), the initial pattern of concentration in financing products of Islamic banks show that
highestshareiscontributedbyMurabaha,IjarahanddiminishingMusharakahinCY09. Murabahahas
still the highest share in financing products by contributing 42.3 percent in CY09. On the other hand
77
Ijarah and Musharakah have sizeable shares with a share of 30.4 percent; diminishing Musharakah is
currentlythesecondmostutilizedmodeoffinancing.
5.7cMicrofinanceinPakistan
Microfinanceisan important marketorientedstrategyof thefinancialsectortobroadenthefinancial
access and support the objective of economic and social development. Pakistan is amongst the few
countries globally that have national strategy which identifies drivers and challenges to achieve both
targets along with an implementation plan drawn along side with industry stakeholders to monitor
progressagainstthenationalstrategy.
Table5.12:MicrofinanceInstitutions
Indicators
6Dec
7Dec
8Dec
9Dec
MFBs
MFIs
Total
MFBs
MFIs
Total
MFBs
MFIs
Total
MFBs
MFIs
Total
Number
ofMFBs
Number
of
Branches
TotalNo.of
Borrowers
Grossloan
portfolio
(Rs.In'000)
6
21
27
6
24
30
7
20
27
8
21
29
145
847
992
232
870
1,102
271
1,186
1,457
284
1,159
1,443
326,498
508,962
835,460
435,407
831,775
1,267,182
542,641
1,190,238
1,732,879
703,044
1,123,001
1,826,045
2,847,389
4,907,267
7,754,656
4,456,259
8,293,724
12,749,983
6,461,462
11,952,000
18,413,462
9,004,000
12,719,000
21,723,000
Average
LoanSize
(Rs)
TotalNo.of
Depositors
Deposits
(Rs.In'000)
8,721
70,891
1,419,841
9,642
9,282
70,891
1,419,841
10,235
146,258
2,822,845
9,971
10,062
146,258
2,822,845
11,907
254,381
4,115,667
14,940
10,626
254,381
4,115,667
13,576
459,024
7,099,206
11,326
12,131
459,024
7,099,206
Source:InvestmentWing,FinanceDivision
Asaresultofendeavoursofthepastfewyears,microfinanceinPakistanhascomealongwayfroma
nascentstagetoanindustry,whichisnowwellpoisedtogrow.Withcurrentoutreachof1.82million
borrowers,thesectorsawphenomenalgrowthofalmost43%inyears2007and2008.Similarly,inthe
year2009theindustrywitnessedanoverallpositivetrend,albeitmild,inrespectofgrowthinallofits
major indicators, with a healthy growth in the deposits indicator that grew by 72% on YoY basis. It is
encouragingthattheMFBshavemadeprogressonanumberoffrontsduringtheyear.Amixofvibrant
andmatureMFBsprimarilycontributedtotheoveralldepositgrowthofthesector.GrossLoanPortfolio
(GLP)recordedasignificanta15%growthduringtheyearof2009.Giventhetightliquiditysituationin
the market, it is now imperative for MFBs to develop their internal deposit base. The borrowings by
MFBshavedeclinedtoRs.4.76billionfromRs.5.069billionduringtheyear2009.
5.7dNonBankFinancialInstitutions(NBFIs)
DuringFY09theassetsofNBFIsincreasedby20.4percentagainsttherobustgrowthof22.3percentin
FY07, to reach Rs. 478.3 billion (Table 5.13). The number of operative entities in FY08 was 237
(subsequentlydecreasingto233inFY09)incomparisonwith209inFY07.Thesizeoftotalassetsofthe
sector relative to GDP at 5 percent, and total financial sector asses at 7.6 percent, is small as is the
proportionofitsdepositsinthetotaldepositsofthefinancialsectorat0.98percent.
78
MonetarySector
Table5.13AssetCompositionoftheFinancialSector
FY02
FY03
FY04
InvestmentBanks
27,001
37,936
35,568
Modaraba
17,456
15,973
18,026
Leasing
46,948
46,842
44,806
DiscountHouses
1,527
1,987
1,341
VentureCapital
272
854
1,005
Companies
MutualFunds
29,094
57,180
103,080
DFIs
68,729
78,803
94,752
HousingFinance
22,434
21,562
19,493
TotalAssets
213,461 261,137 318,071
Growth
3.9
22.3
21.8
FY05
51,041
21,572
53,635
1,504
FY06
54,527
23,927
63,999
1,834
FY07
41,458
25,186
63,956
1,417
FY08
58,017
29,703
65,920
0
FY09
30,875
23,087
56,055
3,200
4,131
4,061
3,760
2,562
136,245
107,811
18,657
393,665
23.8
177,234 313,661 339,718 225,201

116,939
97,700
84660
121,906
19,702
17,742
18996
18,603
462,293 565,181 600,774 478,289
17.4
22.3
6.3
20.4
Source:FinancialStabilityDepartment,SBP
Mutualfundsleadthesectorintermsoftheirshareintotalassets,whichstrengthenedfurtherto58.5
percentduringFY08,asagainst55.3percentinFY07.
NBFCsborrowingsfrombanksagainsttheircreditlinesdeclinedby34.7percent.Giventheperceived
lackofconfidenceintheeconomyandtosomeextent,inthefinancialsector,duringthattime,financing
raised through epoits/CoDa/CoIs declined ever more drastically by 91.3 percent, whereas financing
fromotherfundingsourcesdeclinedby15.3percent.
5.7e.InsuranceSector
The factors such as the emergence of macroeconomic instability since late 2007, turmoil in global
financial markets and dislocation of the domestic equity market along with the deteriorating security
situation,posedsubstantialchallengestotheperformanceofinsurancesectorinCY08.
Fig5.11AssetsofInsuranceSector
CY09
CY07
CY05
CY03
CY01
0
50
100
150
200
250
300
350
400
In response, the insurance industry showed its resilience in that it was able to absorb a sudden and
unexpectedshockofmeetinginsuranceclaimsofmorethanRs6.0billionarisingfromtheriotscaused
bytheassassinationofformerprimeministerBenazirBhuttoon27thDecember,CY07.Atthecloseof
79
CY08,theassetbaseoftheinsurancesectorstoodatRs341.4billion,up5.5percentincomparisonwith
CY07. The asset base further increased by 10.6 percent in CY09 to Rs 377.5 billion. The level of
concentrationishigh, thoughrelativelylessskewedingeneralinsurancecompaniessuchthat thetop
fivecompaniesholdmorethan70percentofthetotalassetsofthegeneralinsurancesector.
80
Table 5.1
COMPONENTS OF MONETARY ASSETS
Stock Rs. in million
2004
2005
2006
2007
1.
Currency Issued
617,508
712,480
791,834
901,401
2.
Currency held by SBP
3.
Currency in tills of Scheduled Banks
4.
Currency in circulation (1-2-3)
5.
Other deposits with SBP 1
6.
Scheduled Banks Total Deposits
7.
Resident Foreign Currency Deposits

(RFCD)
8.
Monetary assets (4+5+6)
9.
Growth rate (%)
End March
2009
2010 P
2008
2009
1,054,191
1,231,871
1,192,420
1,359,776
2,960
3,107
3,005
3,148
2,900
2,693
2,697
2,550
36,432
43,472
48,439
58,072
68,966
77,006
75,193
80,014
578,116
665,901
740,390
840,181
982,325
1,152,173
1,114,531
1,277,213
2,116
3,335
4,931
7,012
4,261
4,662
4,244
5,997
1,905,260
2,291,408
2,661,584
3,217,962
3,702,556
3,980,384
3,686,512
4,163,660
145,694
180,295
195,501
207,312
263,430
280,364
279,662
330,014
2,485,492
2,960,644
3,406,905
4,065,155
4,689,143
5,137,218
4,805,287
5,446,870
19.6
19.1
15.1
19.3
15.3
9.6
2.5
6.0
Memorandum Items
1.
Currency / Money ratio
23.3
22.5
21.7
20.7
20.9
22.4
23.2
23.4
2.
Demand Deposits / Money ratio
31.8
32.1
31.9
65.0
65.5
62.4
61.9
61.8
3.
Time Deposits / Money ratio
39.0
39.2
40.5
9.0
7.8
9.6
9.0
8.6
4.
Other Deposits / Money ratio
0.1
0.1
0.1
0.2
0.1
0.1
1.1
0.1
5.
RFCD / Money ratio
5.9
6.1
5.7
5.1
5.6
5.5
5.8
6.1
2.4
2.4
2.1
2.3
2.4
2.8
Income Velocity of Money 2
P : Provisional
Source: State Bank of Pakistan
1 : Excluding IMF A/c Nos 1 & 2 SAF Loans A/c deposits money banks, counterpart funds, deposits of foreign central banks, foreign
governments and international organizations etc
2 : Income velocity of money is defined by the State Bank as GDP at current factor cost/quarterly average of Monetary Assets (M2)
Explanatory Notes:
a : Data series on monetary aggregates other than M1 are based on weekly returns reported by scheduled banks to SBP
b : Data series on M1 aggregates (as Sr. # 8) is issued on monthly returns reported by scheduled banks to SBP and published in Statistical
Bulletin from Aril 2008
c : The stock data of M2 has been revised since June 2002 due to treatment of privatization commission deposits with NBP as government
deposits. These deposits were previously included in private sector deposits which have now being included in government deposits
d : Totals may not tally due to separate rounding off
6.
TABLE 5.2
CAUSATIVE FACTORS ASSOCIATED WITH MONETARY ASSETS
1 Public Sector Borrowing (net)

(i + ii + iii + iv + v + vi)
i Net Budgetary Support
ii Commodity Operations
iii Zakat Fund etc.
iv Utilization of privatization
proceeds by Govt./WAPDA
v Use of Privatization proceeds/
NDRP Fund for Debt Retirement
vi Payment to HBL on A/C of HC&EB
2 Non-Government Sector
i Autonomous Bodies 1
ii Net Credit to Private Sector
& PSCEs (a + b + c + d)
a. Private Sector
b. Public Sector Corp. other than 2(i)
c. PSEs Special Account Debt
Repayment with SBP
d. Other Financial Institutions
(SBP credit to NBFIs)
3 Counterpart Funds
4 Other Items (Net)
5 Domestic Credit (1+2+3+4)
6 Foreign Assets (Net)
7 Monetary Assets (5+6)
2006
2007
2008
833,686
708,037
107,762
(14,308)
A. Stock End June

926,530
1,508,541
810,053
1,364,604
98,552
125,423
(14,269)
(13,681)
2009
(Rs million)
End March
2009
2010 P
2,034,304
1,681,022
336,202
(15,114)
1,727,000
1,570,239
140,267
(15,700)
2,206,152
1,920,010
269,884
(15,937)
37,651
37,657
37,657
37,657
37,657
37,657
(5,749)
287
2,190,769
36,979
2,153,790
(5,749)
287
2,576,474
58,148
2,518,326
(5,749)
287
3,019,924
87,387
2,932,536
(5,749)
287
3,189,994
112,186
3,077,808
(5,749)
287
3,237,329
114,675
3,122,654
(5,749)
287
3,425,323
114,714
3,310,609
2,113,890
47,237
2,479,608
46,010
2,889,814
49,894
2,906,897
177,819
2,964,066
165,990
3,054,109
262,662
(23,225)
(23,478)
(23,597)
(23,683)
(23,683)
(23,683)
15,889
(546)
(327,346)
2,696,564
710,341
3,406,905
16,187
(519)
(422,223)
3,080,263
984,982
4,065,155
16,425
(543)
(506,834)
4,021,633
667,511
4,689,143
16,776
0
(604,410)
4,619,888
517,330
5,137,218
16,281
0
(621,622)
4,342,708
462,579
4,805,287
17,522
0
(762,143)
4,869,332
557,538
5,446,870
B. Changes over the year (July-June)

8 Public Sector Borrowing (net)
(I + ii + iii + iv + v + vi)
86,879
92,844
582,011
525,763
218,459
171,847
i Net Budgetary Support
67,063
102,015
554,551
316,418
205,635
238,988
ii Commodity Operations
19,926
(9,210)
26,871
210,779
14,844
(66,318)
iii Zakat Fund etc.
(110)
39
588
(1,434)
(2,019)
(822)
iv Utilization of privatization
proceeds by Govt./WAPDA
v Use of Privatization proceeds/
NDRP Fund for Debt Retirement
vi Payment to HBL on A/C of HC&EB
9 Non-Government Sector
408,401
385,705
443,449
170,070
217,405
235,329
4,755
21,169
29,239
24,799
27,288
2,528
i Autonomous Bodies 1
ii Net Credit to Private Sector & PSCEs
(a + b + c + d)
403,646
364,536
414,210
145,272
190,118
232,801
a. Private Sector
401,797
365,718
410,206
17,083
74,252
147,212
b. Public Sector Corp. other than 2(i)
2,399
(1,227)
3,884
127,925
116,096
84,843
c. PSEs Special Account
Debt Repayment with SBP
489
(253)
(118)
(86)
(86)
0
d. Other Financial Institutions (NBFIs)
(1,038)
298
238
351
(144)
746
10 Counterpart Funds
(7)
27
(24)
543
543
0
11 Other Items (Net)
122,416
(94,877)
(84,093)
(97,576)
(114,788)
(157,733)
12 Domestic Credit Expansion (8+9+10+11)
372,857
383,699
941,370
598,800
321,620
249,444
13 Foreign Assets (Net)
73,403
274,551
(317,381)
(150,181)
(204,933)
60,208
14 Monetary Expansions (12+13)
446,260
658,250
623,988
448,075
116,144
309,652
Note: Figures in the parentheses represent negative signs.
P : Provisional
1 : Till end June 1996 autonomous bodies consisted of WAPDA, OGDC, PTC, NFC, and PTV, thereafter their
composition has been changed as WAPDA, OGDC, PTC, SSGC SNGPL, KESC and Pakistan Railways
2 : Adjusted for SAF loans amounting to Rs 7371 million
3 : Adjusted for Rs 5278 million to exclude the impact arising due to mark up debited to the borrowers account
4 : Adjusted for Rs 8207 million being mark up debited to the borrowers account
5 : Credit to NHA by commercial Banks
6 : Credit to NHA and CAA by commercial banks
TABLE 5.3
SCHEDULED BANKS POSITION BASED ON WEEKLY RETURNS: LIABILITIES AND
ASSETS
Outstanding Amount at end June
2005
2006
2007
2008
2009
(Rs million)
End March
2009
2010 P
LIABILITIES
1. Capital (paid-up) and Reserves
190,652
315,414
484,296
551,313
639,098
612,821
670,416
DEMAND LIABILITIES IN PAKISTAN
2. Inter-banks Demand Liabilities
22,993
28,608
54,796
35,856
60,235
44,702
46,873
2.1 Borrowing
(99)
0
0
0
0
0
0
2.2 Deposits
(22,894)
(28,608)
54,796
35,856
60,235
44,702
46,873
3. Demand Deposits (General)
1,211,674 1,350,011 2,889,589 3,352,974 3,473,440 3,221,722 3,673,275
4. Other Liabilities
70,107
97,266
137,089
167,862
218,269
203,150
223,794
5. Total Demand Liabilities (2+3+4)
1,304,774 1,475,885 3,081,474 3,556,693 3,751,944 3,469,574 3,943,942
TIME LIABILITIES IN PAKISTAN
6. Inter-banks Time Liabilities
10,756
25,759
3,861
6,344
17,470
7,563
12,979
6.1 Borrowing
(1,024)
0
0
0
0
0
0
6.2 Deposits
(9,732)
(25,759)
3,861
6,344
17,470
7,563
12,979
7. Time Deposits (General)
1,231,745 1,490,182
512,565
522,843
684,685
621,973
737,408
27,288
34,236
69,786
87,554
86,659
77,105
95,947
9. Total Time Liabilities (6+7+8)
1,269,789 1,550,177
586,212
616,741
788,814
706,641
846,334
10. Total Demand and Time Liabilities
2,574,563 3,026,061 3,667,686 4,173,434 4,540,758 4,176,214 4,790,276
11. Borrowing From SBP
185,068
198,725
269,109
213,328
293,655
305,863
365,121
12. Borrowing from Banks Abroad
6,245
2,953
7,015
5,287
9,139
10,332
12,957
13. Money at Call and Short Notice in Pakistan
22,243
172,893
220,941
169,637
192,979
205,182
178,501
645,616
168,011
136,119
218,672
323,587
313,917
400,167
15. Total Liabilities
3,624,387 3,884,057 4,785,167 5,331,671 5,999,217 5,624,329 6,417,437
16. Total Statutory Reserves
127,041
148,585
229,338
316,878
184,585
171,244
194,853
16.1 On Demand Liabilities
(64,089)
72,364
211,867
316,878
184,585
171,244
194,853
16.2 On Time Liabilities Assets
(62,952)
76,221
17,471
0
0
0
0
ASSETS
17. Cash in Pakistan
43,462
48,439
58,072
68,966
77,006
75,193
80,014
18. Balances with SBP
188,092
202,501
307,433
414,098
278,432
255,996
275,572
19. Other Balances
49,021
56,460
65,656
63,622
80,986
51,661
50,662
20. Money at Call and Short Notice in Pakistan
22,166
232,535
239,031
157,218
185,049
158,111
167,613
21. 17+18+19+20 as % of 10
11.8
17.8
18.0
17.0
14.0
13.0
12.0
FOREIGN CURRENCY
22. Foreign Currency held in Pakistan
6,777
6,449
7,463
11,009
13,518
15,519
14,056
23. Balances with Banks Abroad
116,627
93,387
170,509
159,327
189,374
197,133
191,010
24. Total Foreign Currency (22 + 23)
123,404
99,836
177,972
170,336
202,892
212,652
205,066
BANK CREDIT ADVANCES
25. To Banks
190
0
0
0
0
0
0
26. To Others
1,680,491 2,079,056 2,379,226 2,809,938 3,088,274 2,952,001 3,156,934
27. Total Advances
1,680,681 2,079,056 2,379,226 2,809,938 3,088,274 2,952,001 3,156,934
28. Bills Purchased and Discounted
120,480
135,924
145,707
140,864
148,693
141,248
153,693
29. Total Bank Credit (27 + 28)
1,801,161 2,214,980 2,524,932 2,950,801 3,236,967 3,093,249 3,310,627
30. 29 as % of 10
70.0
73.2
69.0
71.0
71.0
74.0
69.0
INVESTMENT IN SECURITIES AND SHARES
31. Central Government Securities
173,788
177,860
174,425
173,171
214,164
199,441
243,041
32. Provincial Government Securities
77
77
76
76
0
0
0
33. Treasury Bills
415,016
411,691
655,921
559,825
756,955
666,477 1,018,764
34. Other Investment in Securities & Shares
140,453
165,598
235,330
286,960
385,035
369,208
476,285
35. Total Investment in Securities and Shares
(29 to 32)
729,334
755,227 1,065,753 1,020,032 1,356,154 1,235,125 1,738,091
36. 35 as % of 10
28.3
25.0
29.0
24.0
30.0
30.0
36.0
37. Other Assets
563,552
195,096
211,141
266,656
307,222
279,796
300,064
38. Advance Tax Paid
42,386
6,423
8,144
18,178
47,136
36,798
54,667
39 Fixed Assets
61,809
72,560
127,031
201,764
227,373
225,748
235,063
40. Total Assets
3,624,387 3,884,057 4,785,167 5,331,671 5,999,217 5,624,329 6,417,437
41. Excess Reserves (18-16)
61,051
53,916
78,095
97,220
93,847
84,752
80,718
Figures in the parentheses represent negative sign
P : Provisional
Note:
1 : Effective 22 July 2006, demand & time deposits have been re-classified in accordance with BSD circular no. 9 2006
dated 18 July 2006. The time deposits of less than 6 months are included in demand deposits for the purpose of CRR & SLR
2 : Definition of time & demand liabilities as mentioned in BSD circular no 9 dated 18 July 2008 have been revised. As per new definition,
time liabilities will include deposits with tenor of one year and above. Accordingly, time deposits with tenor of less of than one
year will become part of demand deposits.
TABLE 5.4
INCOME VELOCITY OF MONEY
Narrow Money
M1
Monetary Assets (M2)

(Rs million)
Growth
Percentage
(Rs billion)
Income Velocity of Monetary
Assets (M2)
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
73.56
80.93
96.54
103.45
118.97
134.83
159.63
185.08
206.36
240.16
265.14
302.91
327.82
358.77
423.14
448.01
443.55
480.33
643.04
739.03
104.62
116.51
146.03
163.27
183.91
211.11
240.02
269.51
290.46
341.25
400.64
505.57
595.39
703.40
824.73
938.68
1,053.23
1,206.32
1,280.55
1,400.63
13.20
11.40
25.30
11.80
12.60
14.80
13.70
12.30
7.80
17.50
17.40
26.20
17.80
18.10
17.20
13.80
12.20
14.50
6.20
9.40
2.70
2.70
2.70
2.70
2.70
2.60
2.50
2.60
2.70
2.70
2.70
2.70
2.30
2.40
2.40
2.40
2.50
2.30
2.40
2.20
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
End March
2008-09
2009-10 P
P : Provisional
Explanatory Note:
1275.61
1494.14
1797.36
2174.74
2512.21
2720.68
3155.63
4689.14
1,526.04
1,751.88
2,078.48
2,485.49
2,960.64
3,406.91
4,065.16
4,689.14
5,137.22
9.00
14.80
18.60
19.60
19.10
15.10
19.30
15.30
9.60
2.60
2.50
2.30
2.30
2.40
2.40
2.30
2.40
2.80
5,137.20
5,431.50
8.12
1.67
End June Stock
a : It may be noted that data series of M1 from 2000-01 is not comparable as compilation of M1 based on weekly data has been
discontinued by the SBP. Now M1 is being compiled on the basis of monthly returns and will be reported in the monthly statistical
Bulletin of the SBP beginning from April 2008 in its table 2.1
b : The stock data of M2 has been revised since June 2002 due to treatment of privatization commission deposits with NBP as
government deposits. These deposits were previously included in private sector deposits which have now being included in
government deposits
TABLE 5.5
LIST OF DOMESTIC, FOREIGN BANKS AND DFIs (As on 30-03-2010)
Public Sector Commercial Banks

1 First Women Bank Ltd.
2 National Bank of Pakistan
3 The Bank of Khyber
4 The Bank of Punjab
Specialized Scheduled Banks
1 Industrial Development Bank of Pakistan Limited
2 The Punjab Provincial Co-operative Bank
3 SME Bank Limited
4 Zarai Taraqiati Bank Limited
Private Local Banks
1 Allied Bank Limited
2 Arif Habib Bank Limited
3 Askari Bank Limited
4 Atlas Bank Limited
5 Bank Al-Falah Limited
6 Bank Al-Habib Limited
7 Bank Islami Pakistan Limited
8 Dawood Islamic Bank Limited
9 Dubai Islamic Bank Pakistan Limited
10 Emirates Global Islamic Bank
11 Faysal Bank Limited
12 Habib Bank Limited
13 Habib Metropolitan Bank Limited
14 JS Bank Limited
15 KASB Bank Limited
16 MCB Bank Limited
17 Meezan Bank Limited
18 my Bank Limited
19 NIB Bank Limited
20 Samba Bank Limited
21 Silkbank Limited
22
23
24
25
Soneri Bank Limited

Standard Chartered Bank (Pakistan) Limited
The Royal Bank of Scotland Limited
United Bank Limited
Foreign Banks
1
Al-Baraka Islamic Bank B.S.C. (E.C.)
2
Barclays Bank PLC
3
Citibank N.A.
4
Deutshe Bank A.G.
5
HSBC Bank Middle East Limited
6
Oman International Bank S.A.O.G.
7
The Bank of Tokyo - Mitsubishi UFJ Limited
Development Financial Institutions
1
House Building Finance Corporation Limited
2
Pak-Brunai Investment Company Ltd
3
Pak-China Investment Co. Ltd.
4
Pak-Iran Joint Investment Co. Ltd.
5
Pak Kuwait Investment Company of Pakistan (Pvt) Limited
6
Pak Libya Holding Company (Pvt) Limited
7
Pak Oman Investment Company (Pvt) Limited
8
Saudi Pak Industrial & Agricultural Investment company
(Pvt) Limited
Micro Finance Banks
1
Kashf Microfinance Bank Limited
2
Khushhali Bank
3
Network Micro Finance Bank Limited
4
Pak Oman Micro Finance Bank Limited
5
Rozgar Micro Finance Bank Limited
6
The First Micro Finance Bank Limited
7
Tameer Micro Finance Bank Limited

and Finance Division.
TABLE 5.6
SCHEDULED BANKS IN PAKISTAN (Weighted Average Rates of Return on Advances)
(Percent)
As at the
Precious
End of
Metal
I. INTEREST BEARING
2001
Jun
11.75
(13.87)
2002
Jun
8.10
(8.14)
2003
Jun
12.01
(12.01)
2004
Jun
9.20
(9.20)
2005
Jun
8.51
(8.51)
2006
Jun
11.58
(11.58)
2007
Jun
10.87
(10.87)
Dec
11.45
(11.45)
2008
Jun
13.62
(13.62)
Dec
14.64
(14.64)
2009
Jun
14.86
(14.86)
Dec
14.07
(14.07)
Stock
Exchange
Securities
13.54
(14.06)
11.27
(11.70)
11.97
(11.82)
6.01
(6.01)
6.86
(8.29)
14.84
(14.09)
11.37
(12.11)
10.36
(10.42)
12.37
(12.60)
13.88
(14.11)
12.15
(10.11)
11.62
(10.28)
Merchandise
13.69
(13.59)
13.12
(13.13)
9.39
(9.67)
6.89
(7.08)
6.09
(6.01)
8.68
(8.51)
10.73
(10.68)
9.82
(9.82)
11.78
(11.77)
13.83
(13.83)
13.45
(13.07)
12.38
(12.17)
Machinery
Real
Estate
Financial
Obligations
Others
12.05
(13.87)
12.47
(13.39)
10.66
(11.49)
9.04
(9.05)
8.86
(9.02)
9.59
(9.99)
10.76
(10.81)
11.93
(11.98)
13.02
(13.14)
13.74
(13.52)
13.21
(13.10)
12.35
(11.99)
Total
Advances*
13.50
(13.55)
13.56
(13.67)
15.66
(15.68)
11.21
(11.77)
4.59
(4.07)
8.55
(8.55)
11.07
(11.06)
11.09
(11.09)
13.16
(13.16)
12.05
(12.04)
11.91
(11.91)
12.78
(12.78)
12.84
(13.86)
12.72
(12.98)
12.63
(12.86)
9.08
(9.08)
6.68
(6.68)
10.23
(10.23)
12.30
(12.30)
12.85
(12.85)
12.21
(12.21)
13.60
(13.60)
14.14
(13.75)
13.70
(13.70)
13.07
(13.00)
13.88
(13.81)
7.74
(7.66)
7.08
(7.03)
6.76
(6.70)
10.31
(10.31)
11.05
(11.05)
10.02
(10.02)
13.32
(13.32)
16.55
(16.55)
15.30
(15.27)
12.43
(11.87)
13.07
(13.64)
13.00
(13.29)
11.87
(12.35)
8.41
(8.54)
7.01
(7.01)
9.71
(9.66)
11.25
(11.30)
11.64
(11.66)
12.53
(12.57)
13.60
(13.60)
13.54
(13.54)
12.66
(12.48)
II. ISLAMIC MODES OF FINANCING

2001
Jun
11.02
13.47
13.39
14.53
(11.28)
(13.57)
(13.88)
(14.42)
2002
Jun
9.30
13.09
12.85
13.70
(9.50)
(13.33)
(12.73)
(13.81)
2003
Jun
11.43
5.92
7.50
9.39
(11.43)
(5.77)
(7.95)
(9.54)
2004
Jun
10.86
4.86
5.73
6.61
(10.86)
(5.28)
(5.96)
(6.81)
2005
Jun
9.03
7.15
7.93
7.80
(9.03)
(7.17)
(7.95)
(7.88)
2006
Jun
10.66
10.03
9.63
9.14
(10.66)
(10.20)
(9.66)
(9.20)
2007
Jun
12.04
11.26
10.11
10.80
(12.04)
(11.34)
(10.03)
(10.84)
Dec
9.70
11.27
10.26
10.76
(9.70)
(11.41)
(10.23)
(10.82)
2008
Jun
11.75
12.87
11.53
12.26
(11.75)
(12.93)
(11.55)
(12.22)
Dec
15.02
15.76
14.42
14.62
(15.02)
(15.66)
(14.19)
(14.67)
2009
Jun
14.18
15.01
14.19
14.20
(14.18)
(15.04)
(13.73)
(14.10)
Dec
14.18
13.61
12.10
12.72
(14.14)
(14.02)
(12.18)
(12.70)
* : Weighted average rates shown in parentheses represent Private Sector.
13.31
(14.52)
13.47
(14.05)
11.47
(12.08)
9.27
(9.68)
10.16
(10.22)
11.23
(11.26)
11.92
(11.92)
11.80
(11.79)
12.11
(12.12)
13.51
(13.49)
13.27
(13.30)
12.71
(12.71)
13.84
14.03
13.65
(13.86)
(14.78)
(14.24)
13.32
13.32
13.20
(13.22)
(14.00)
(13.52)
7.79
10.31
9.19
(8.62)
(10.84)
(9.71)
5.88
8.34
7.19
(5.82)
(9.01)
(7.60)
8.21
10.15
8.94
(8.19)
(10.67)
(9.13)
9.25
12.37
10.68
(9.25)
(12.90)
(10.83)
10.43
13.02
11.57
(10.49)
(13.40)
(11.68)
10.58
12.93
11.55
(10.62)
(13.26)
(11.65)
11.23
13.90
12.48
(11.23)
(14.21)
(12.55)
15.00
15.89
14.72
(15.02)
(15.96)
(14.72)
15.83
15.08
14.31
(16.79)
(15.20)
(14.30)
11.93
14.88
13.22
(11.55)
(14.96)
(13.10)
Table 5.7
SALE OF GOVERNMENT SECURITIES THROUGH AUCTION
No.
1
A
Securities
Market Treasury Bills *
Three Month Maturity
Amount Offered
i) Face value
ii) Discounted value
2004-05
2005-06
2006-07
2007-08
2008-09
216,637
214,315
1,011,659
1,002,708
389,173
382,026
186,652
183,039
157,946
154,340
1,413,218
1,372,004
341,507
332,201
29,231
29,042
115,575
115,174
724,359
716,768
210,541
206,768
136,102
133,484
139,771
136,574
975,798
947,622
131,251
127,682
1.658
5.815
0.995
1.702
2.017
7.479
7.549
8.326
8.315
8.689
8.687
11.316
11.451
13.855
11.306
12.442
Six Month Maturity

Amount Offered
i) Face value
747,018
731,354
328,990
326,114
470,885
460,185
182,112
173,289
125,483
120,197
91,476
87,279
272,584
255,885
532,948
502,496
Amount Accepted
i) Face value
349,009
341,225
158,430
157,256
256,914
251,166
69,752
67,094
90,433
86,629
78,242
74,673
176,401
165,626
232,907
219,552
Weighted Average Yield

i) Minimum % p.a.
ii) Maximum % p.a.
1.639
12.404
1.212
2.076
2.523
7.945
7.968
8.487
8.485
8.902
8.902
11.472
11.668
14.011
11.385
12.594
Twelve Month Maturity

Amount Offered
i) Face value
695,425
665,337
476,719
466,729
136,713
128,569
555,757
509,202
787,636
717,951
658,709
598,425
931,293
823,027
1,188,207
1,057,814
Amount Accepted
i) Face value
264,938
253,908
241,019
236,421
70,688
65,799
459,440
422,647
661,786
607,211
441,130
402,784
332,008
294,106
634,792
566,046
2.356
6.941
1.396
2.187
2.691
8.401
8.456
8.791
8.786
9.160
9.160
11.688
11.778
14.261
11.470
12.609
(Contd.)

i) Minimum % p.a.
ii) Maximum % p.a.
2003-04
109,106
108,332
Amount Accepted
i) Face value
2002-03
(Rs. million)
July-March
2009-10

i) Minimum % p.a.
ii) Maximum % p.a.
* : MTBs was introduced in 1998-99
Table 5.7
SALE OF GOVERNMENT SECURITIES THROUGH AUCTION
No.
Securities
2
A.
Pakistan Investment Bonds **

Amount Offered
03 Years Maturity
05 Years Maturity
10 Years Maturity
15 Years Maturity
20 Years Maturity
30 Years Maturity
B.
Amount Accepted
(a) 03 Years Maturity.
(i) Amount Accepted
(ii) Weighted Average Yield #
(1) Minimum % p.a.
(2) Maximum % p.a.
(a) 05 Years Maturity
(i) Amount Accepted
(1) Minimum % p.a.
(2) Maximum % p.a.
(i) Amount Accepted
(1) Minimum % p.a.
(2) Maximum % p.a.
(i) Amount Accepted
(1) Minimum % p.a.
(2) Maximum % p.a.
(i) Amount Accepted
(1) Minimum % p.a.
(2) Maximum % p.a.
(i) Amount Accepted
(1) Minimum % p.a.
(2) Maximum % p.a.
(i) Amount Accepted
(1) Minimum % p.a.
(2) Maximum % p.a.
** : PIBs was introduced in 2000-01
2002-03
2003-04
2004-05
2005-06
2006-07
(Rs. in million)
July-March
2008-09
2009-10
2007-08
211,963
26,074
45,620
140,268
-
221,291
38,514
58,840
93,041
14,316
16,579
-
8,016
2,400
2,603
3,013
0
0
-
16,012
3,896
6,526
5,590
0
0
-
199,017
36,982
39,799
65,986
12,750
20,200
23,300
141,853
11,260
21,311
61,593
16,138
11,750
19,800
12,640
9,523
4,410
25,254
2,536
3,500
7,000
16,860
11,317
5,050
57,839
3,055
8,595
11,525
74,848
107,658
771
10,161
87,867
73,584
9,651
14,533
100
2,846
10,882
5,169
4,165
8,193
1.792
7.952
3.734
4.235
0.000
0.000
9.158
9.389
9.311
9.778
9.619
12.296
13.697
13.883
12.210
12.475
14,369
27,765
427
4,075
10,174
10,777
3,023
5,692
3.119
8.887
4.867
5.270
0.000
0.000
9.420
9.646
9.528
10.002
9.796
10.800
14.335
14.336
12.295
12.564
2,935
1,875
14.3273
14.7041
12.4159
12.696
50,828
51,606
244
3,240
30,211
23,875
8,509
32,738
4.014
9.587
6.168
7.127
0.000
0.000
9.8005
9.8454
10.106
10.507
10.179
13.411
14.472
14.864
12.426
12.705
6,996
9,250
8,613
1,236
1,035
7.683
8.994
0.000
0.000
10.85
11.058
11.108
13.441
14.750
15.356
12.848
12.922
6,757
11,250
9,050
1,500
1,525
8.706
8.993
0.000
0.000
11.173
11.392
11.373
13.855
15.700
15.700
13.099
13.299
16,100
16,100
4,500
1,775
11.546
11.680
11.588
14.118
14.608
16.225
13.551
13.749
Inflation
Afterdecliningformuchofcalendar2009,inflationarypressurehasintensifiedofrecentonaccountofa
numberofadversedevelopments.Fromalowof8.9percentinOctober2009,yearonyearConsumer
PriceIndex(CPI)inflationhasacceleratedto13.3percentasofApril2010(Figure6.1).Foodinflation
hasremainedelevatedinthepastfewmonths,stabilisingataround14.5percent(from7.5percentin
October2009),whiletherateofchangeinpricesofNonFooditemshasbeenrecordedat12.2percent
forApril(from10percentinOctober).Coreinflation,definedasinflationinthenonfood,nonenergy
(NFNE) component of the CPI basket, has reversed its path of moderate decline, and stood at 10.6
percentinApril.Onaperiodaveragebasis,overallinflationwasrecordedat11.5%forJulytoApril.For
thecorrespondingperiodin200809,averageinflationstoodat22.3%.
The refuelling of inflationary pressure is evident in all major price indices, with the Wholesale Price
Index (WPI) inflation rising steeply, from 0.3% in August 2009 to 22% in April 2010. Similarly, the
SensitivePriceIndex(SPI)hasrecordeda16.7%yearonyearincreaseforApril,versus6.7%inOctober
2009(Figure6.2).
Fig6.1:InflationTrend
Fig6.2:CPI Overall,FoodandNonFood
Food
35.0
NonFood
0.0
0.0
Jul08
Jan10
5.0
Oct
5.0
Jul09
10.0
Apr
10.0
Jan10
15.0
Oct
15.0
Jul09
20.0
Apr
20.0
Jan09
25.0
Oct
SPI
30.0
25.0
Jul08
WPI
Apr
30.0
CPI
Apr
40.0
Jan09
35.0
Overall
Oct
40.0
Asharpspikeinglobalcommodityprices,mainlyrelatingtofoodandenergy,whichhaspersistedsince
the beginning of 2009, has exerted strong upward pressure on the domestic price level. While
internationaloilpricesrose70%yearonyearbetweenApril2009andApril2010,theIMFCommodity
Price Index experienced a 49% increase. The sharp upward trend is captured in the following table,
whichprovidesasnapshotofbenchmarkinternationalcommoditypriceindices.
81
Table6.1:GlobalCommodityPriceIndices
Index
Asof:
IMFCommodityPriceIndex
EIUAllCommodityIndex(US$)
CrudeOil
FAOFoodPriceIndex
IMFFoodPriceIndex
EIUFoodPriceIndex
WorldBank
FoodCPIPakistan
April
April
April
April
April
April
April
April
IndexValue
%change
2009
2010
103
153
49
182
207
14
50
84
68
143
162
13
133
146
10
207
196
5
199
203
2
221
253
14
Source:FAO,IMF,WorldBank,Economist
Partlyasaresultoftheriseintheworldoilprice,andpartlyaresultofsecularfactorsatplaysuchasthe
increasing diversion to biofuels, global food prices, as proxied by the UNs Food and Agricultural
Organisations (FAO) Food Prices Index, rose steeply in the first seven months of 200910, peaking in
Januarywithayearonyeargainof20percent.Whiletherehasbeensomeretrenchmentintheindex
since,itisstillup13%ona12monthbasisinApril.Thebiggestincreasecameaboutintheworldsugar
priceindex,whichgained112percentatitspeakintheperiodunderreview,withdairyproductsalsoa
stronggainer(seebelow).
Source:FoodandAgriculturalOrganisation,UN
Whiletheworldpriceof sugarhasfallen dramaticallysinceitspeakinJanuary2010,itis still up21%

yearonyear.Dairyprices,ontheotherhand,haveresumedtheirupwardmarch.
Given this backdrop of global price developments, it should be of little surprise that the sharp
resurgence of inflation is not restricted to Pakistan and is both a global as well as a regional
phenomenon, though with varying orders of magnitude. Indias food price inflation soared to 19.2
percent in December 2009, before settling at 16.7 percent in March. Similarly, food inflation in
Bangladeshrosefrom3.3percentinJuly2009,to10.9percentinFebruary2010.
82
Inflation
GlobalmonthlypricedevelopmentssinceJanuary2009forselectcommoditiesarelistedinTable6.2.At
theirpeak,forexample,theworldpriceofsugarhadrisenover110percent,whilecrudeoilpriceshad
increased88percent.
Table6.2:InternationalPricesofMajorCommodities
Sugar
$/Ton
January2009
278
February
293
March
295
April
301
May
354
June
362
July
405
August
495
September
508
October
499
November
491
December
508
January2010
584
February
560
March
418
April
364
%Change(Apr10/Apr09)
21
CrudeOil
$/Brl
42
39
48
50
59
70
64
71
69
76
78
75
78
76
81
84
69
Wheat
$/Ton
340
319
307
315
335
327
288
266
259
274
288
287
287
279
274
265
16
Rice
$/Ton
319
316
332
336
322
319
320
308
303
296
340
403
420
403
377
354
5
Source:WorldBank
InthecaseofPakistan,theincreaseindomesticpricesofthesecommoditiesremainedrelativelymore
mutedascomparedtotheinternationalpricemovements.However,sinceJanuary2010,international
pricesforsomeofthecommoditiesshown,barringpetroleum,havefallenmorerapidlythaninthecase
ofPakistan.
Table6.3:%ChangeinInternationalandDomesticPrices
%Change
Commodity
InternationalPricesApr10/Apr09
Sugar
21
Wheat
16
Crudeoil/Petrol
70
Palm/EdibleOil
19
Milk/Dairy
74
%Change
DomesticPricesApr10/Apr09
38
0
27
47
17
Source:WorldBank;FAO;FBS
ThecontributiontoCPIinflationforJulytoApril200910bycommoditygroupsisshownbelow.Forthe
first ten months of 200910, Food has accounted for over 40% of CPI inflation, with inflation in non
perishable items contributing the most to the increase. The sharply higher contribution of non
perishableitemstoinflationcouldindicate,amongotherthings,theimpactoftransportationcostson
thestructureoffoodprices.
83
Table6.4:AnnualInflationbyCommodityGroups
(JulyApr)
CommodityGroup
Weight
200809
200910
Percent
CPI
Food
i)Perishable
ii)Nonperishable
NonFood
Apparel,Textile
HouseRent
Energy
Household
Transport
Recreation
Education
Cleaning
Medicare
100
40.3
5.14
35.2
59.7
6.1
23.4
8.7
3.3
7.3
0.8
3.5
5.9
2.1
22.3
26.6
23.2
28.6
19.0
14.9
16.8
25.1
13.5
28.0
12.7
16.7
18.7
12.4
11.5
12.0
14.5
11.7
11.0
5.8
14.6
10.5
6.4
3.8
3.1
13.3
10.8
6.0
PointContribution
(JulyApr)
200809
200910
Percent
22.4
11.5
10.7
4.8
1.2
0.7
10.1
4.1
11.3
6.6
0.9
0.4
3.9
3.4
2.2
0.9
0.4
0.2
2.1
0.3
0.1
0.0
0.6
0.5
1.1
0.6
0.3
0.1
Intermsoflargeweightindividualitems,thebiggestcontributiontoyearonyearinflationinAprilhas
comefromtheincreaseintheHouseRentIndex(HRI),followedbymilk,sugar,electricity,petrol,and
naturalgasfordomesticuse(Table6.5).
Table6.5:ContributionbyMajorItems
Weight
OverallCPIIndex
HouseRentIndex
Milk
Sugar
Electricity
Petrol(MS)
NaturalGas
Diesel(HSD)
Kerosene
CNG
100.00
23.43
6.66
1.95
4.37
1.73
2.05
0.21
0.14
0.17
April2009
April2010
197.3
189.9
216.1
162.7
159.8
189.7
282.4
362.7
388.2
205.5
223.4
211.3
252.0
224.5
189.5
247.2
326.6
488.8
485.4
226.8
Point
Contribution
13.3%
13.26
11.2%
2.63
16.6%
1.11
38.0%
0.74
18.6%
0.81
30.3%
0.52
15.7%
0.32
34.8%
0.07
25.0%
0.03
10.4%
0.02
%Change
Thedominantpresenceoftheenergycomplexitemsinthelistofcontributorsshouldbeofnosurprise
given the fairly large adjustments in administered prices related to energy (electricity, petroleum
products,gas,CNG)havehadtobemadeoverthisperiod.
Someoftheotherfactorsthathavecontributedtothespikeininflationarypressureoverthepasttwo
yearsinclude:
x TheweakeningoftheRupeeoverthepasttwoyears
84
Inflation
x Increaseinthedomesticprocurementpriceforwheat
x ResidualAggregateDemandpressuresintheeconomyemanatingfromsubstantialtransfersto
theruraleconomyonaccountofanunprecedentedgovernmentruncommodityprocurement
program,andahealthyincreaseinworkerremittances
x The washing out of a favourable base effect is now exerting a negative influence on the
inflation comparison from yearago levels, and is likely to intensify over the next few months
(seeFigure6.3).
Fig6.3:MonthWiseYearonYearCPIInflation
2008
2009
2010
30
25
20
15
10
5
0
Dec
Nov
Oct
Sep
Aug
July
June
May
Apr
Mar
Feb
Jan
Source:FBS
Outlook
Recent developments with regard to the sharp selloff in international commodity markets in the
aftermath of the sovereign debt crisis in Greece, and strong fears of contagion within Europe and
possibly beyond, provide some hope that the unremitting increase in commodity prices over the past
twoyearsmayhavebeeninterrupted.
Theremainingunderpressureofcommoditypricesformuchof201011asaresult,willproviderespite
fromdomesticinflationarypressure.Higherfarmerincomesoverthepasttwoyears,arelikelytolead
toanimprovedcropsituation,allotherthingsremainingthesame,duetoagreaterabilitytopurchase
criticalinputs.
The continuation of prudent macroeconomic polices is likely to continue providing support to the
consolidationofstabilityineconomicindicators,includinginflation.
Ontheflipside,however,governanceissuesinthepowersectorcouldtranslateintoyetfurtherend
user tariff increases. The effect on inflation of the expected introduction of a broadbased and
integratedValueAddedTax(VAT)from201011,hasbeenamatterofmuchdebate.Thecollapsingof
multiplehigherratesofGST(inarangeof16%to25%ondifferentgoods)intoasingle,lowerrateof
15%underVAT,shouldprovide,onpaperatleast,amoderatedisinflationaryimpacttoprices.
Inaddition,thefactthatahighthresholdhasbeenproposed(annualturnoverexceedingRs7.5million),
should mean that the large bulk of the retail trade is likely to be exempted from the VAT. While the
straightforwardimpactinarithmetictermsmaybemarginallydisinflationary,thewildcard,however,is
85
thebehaviouraleffectonpricesoftheintroductionoftheVAT.Theimpact,ifany,anditslikelyeffect
remainmoot,however.Generally,theexperienceofseveralcountriesstudiedsuggeststhattheoverall
effectofVATonthepricelevelhasnotbeenlarge.
PossibleMitigationStrategies
Intermsofinflationmitigationstrategies,policyoptionsarefairlylimitedintheshortrun.Formuchof
200910,giventhebackdropofhighandrisinginternationalcommodityprices,importswereunlikely
to dampen domestic prices, except to the extent of excess pressure caused by shortfalls in domestic
production.
Improved availability through better administrative measures against hoarding is likely to have some
effect at the margin. This will have a greater effect, however, if employed in conjunction with close
vigilanceofuseofbankcreditforcommoditypurchasesbytheprivatesector.Therevivaloftheprice
magistracysystemcanalsobeaneffectivelocalizedtoolinthefightagainstpriceinflationinessential
fooditems.
In the longer run, improvements in agricultural productivity hold the key to mitigation of food price
inflation.Sofar,governmentshavefollowedanextensivefarmingpolicy,usingthecropsupportpriceas
an intervention tool. However, there are clear limitations to this strategy, including the diminishing
responsivenessofoutputtopriceincentives,theimpactonthegeneralpricelevel,andtheimplication
for recourse to budgetary resources, especially in the case of wheat. A shift to more intensive
agricultureistheneedofthehour,withreturnstofarmerslinkedtobetteryields(volumebased)rather
thantoapricebasedmechanismofsupport.
An important limitation of the crop support price regime has come to light over the past two years,
especiallyinthecaseofwheat.Aneardoublingofthesupportpricesince2008hashadsomeeffecton
output,butnodampeningimpactondomesticprices.Thehighersupportpricemayleadtoincreased
availability,butitwillbeatahigherprice,hence,itwillnothaveanimpactonreducingdomesticprices.
Theeffectwithregardtoraisingfarmerincomesis,however,moredemonstrable.
Afurthercriticalelementinthecontainmentofpricepressureintheeconomywillbecontinuationof
prudent macroeconomic policies, including monetary policy, which is essential to prevent a spillover
fromfoodandenergycomponentsoftheCPItothebroaderhouseholdconsumptionbasketwhichto
someextentisinevitableunderthecircumstances.Demandmanagementisstillanessentialcomponent
oftheoverallpolicymixtopreventanentrenchmentofinflationaryexpectations.
Segments of society vulnerable to the effects of inflation will require wider but better targeted
coverageofsocialsafetynets.ThefranchisingtotheprivatesectorofgovernmentownedUtilityStores
(US),increasingthedistributionalreachofUSviaweeklymarkets(SundayandTuesdaybazaars)andthe
inductionoflargevolumediscountstores(suchashypermarkets)canalsobeexamined.
86
TABLE 6.1 (A)

PRICE INDICES
General
Groups/
Fiscal Year
A. COMBINED CONSUMER PRICE INDEX BY GROUPS

Food
Apparel
House *Energy Household Fur- *Transport Recreation Education Cleaning, LaunBeverages Textile
Rent
niture, Equip- & CommuEnterdry & Personal
& Tobacco & Footwear
ments etc.
nication
tainment
Appearance
(Base: 2000-01 = 100)
42.14
46.42
45.15
38.95
47.82
41.72
48.68
43.54
46.33
51.97
49.46
39.02
51.97
46.25
51.82
47.25
51.84
56.46
54.60
40.00
5.31
50.31
53.31
51.55
57.72
60.29
59.76
44.84
54.78
54.78
56.48
59.25
67.24
67.64
66.19
49.20
59.17
59.17
61.37
65.50
74.05
75.59
72.37
56.99
64.66
64.66
71.00
75.01
82.86
82.82
79.71
64.10
73.43
73.43
80.49
85.38
89.20
86.50
87.38
71.16
76.93
76.93
88.09
87.67
94.46
92.27
93.21
80.95
76.98
76.98
92.20
92.81
96.56
97.31
97.15
90.36
81.06
81.06
96.46
97.79
100.00
100.00
100.00 100.00
100.00
100.00
100.00
100.00
100.00
102.50
103.23
102.80 107.76
103.80
103.80
106.30
104.97
102.50
105.40
106.75
103.80 118.39
105.29
105.29
107.21
109.72
103.37
111.74
109.69
108.20 120.26
115.72
115.72
106.08
114.19
111.29
125.69
112.98
120.42 128.46
117.33
120.18
105.86
117.55
115.90
134.39
117.58
132.36 147.24
124.25
130.99
105.65
125.03
119.49
148.21
123.70
141.21 156.65
131.64
134.63
105.76
133.82
124.55
174.36
133.79
154.47 165.17
141.08
138.66
107.86
140.88
138.28
215.69
152.82
180.90 198.92
159.58
192.55
120.00
165.27
163.17
1990-91
43.20
1991-92
47.41
1992-93
52.07
1993-94
57.94
1994-95
65.48
1995-96
72.55
1996-97
81.11
1997-98
87.45
1998-99
92.46
1999-00
95.78
2000-01
100.00
2001-02
103.54
2002-03
106.75
2003-04
111.63
2004-05
121.98
2005-06
131.64
2006-07
141.87
2007-08
158.90
2008-09
191.90
Jul-Apr
2008-09
190.54 214.60
152.13
178.42 197.09
158.56
193.44
119.69
162.66
161.63
2009-10
212.44 240.41
160.91
204.50 223.97
168.65
200.89
124.62
184.23
179.17
Note: The CPI 1990-91 base year series have been converted into series with a base of 2000-01.
(1) : The Recreation, Entertainment and Education Group has been split into two groups namely
(i) Recreation & Entertainment Group; (ii) Education
(2) : The nomenclature of Medicine Group has been changed to Medicare Group.
* : Transport & Energy Groups Index is available from July 2003 and onward while prices from 1990-91 upto June 2003 in respect of
these two Groups have been converted into index
Medicare
42.73
46.77
49.75
64.27
69.61
76.26
86.10
90.57
92.02
93.14
100.00
102.37
105.59
106.89
107.94
110.66
120.91
132.23
147.25
146.57
155.32
(Contd.)
TABLE 6.1 (B)

HEADLINE & CORE INFLATION
Indices
Year
General
Food
NonFood
48.52
52.31
58.18
64.09
71.36
79.73
86.07
90.89
95.16
100.00
104.28
107.66
111.55
119.47
129.77
137.58
148.45
175.81
*Core
General
1991-92
47.41
46.33
48.84
10.58
1992-93
52.07
51.84
52.51
9.83
1993-94
57.94
57.72
58.21
11.27
1994-95
65.48
67.24
64.43
13.02
1995-96
72.55
74.05
71.46
10.79
1996-97
81.11
82.86
79.62
11.80
1997-98
87.45
89.20
85.60
7.81
1998-99
92.46
94.46
89.47
5.74
1999-00
95.78
96.56
92.59
3.58
2000-01
100.00
100.00
100.00
4.41
2001-02
103.54
102.50
103.76
3.54
2002-03
106.75
105.40
106.43
3.10
2003-04
111.63
111.74
110.43
4.57
2004-05
121.98
125.69
117.95
9.28
2005-06
131.64
134.39
126.82
7.92
2006-07
141.87
148.21
134.35
7.77
2007-08
158.90
174.36
145.60
12.00
2008-09
191.90
215.69
171.17
20.77
Jul-Apr
2008-09
190.54
214.60
174.28
169.42
22.35
2009-10
212.44
240.41
193.52
188.34
11.49
Note : Core Inflation is defined as overall inflation adjusted for food and energy
Headline & Core Inflation

NonFood
Food
10.64
10.52
11.74
7.81
11.34
11.22
16.67
10.17
10.13
11.34
11.89
11.73
7.65
7.94
5.90
5.61
2.23
4.69
3.56
5.09
2.44
4.28
2.89
3.24
6.01
3.62
12.48
7.10
6.92
8.63
10.28
6.02
17.65
7.90
23.70
18.45
26.61
12.03
19.01
11.04
*Core
10.52
7.50
10.90
10.70
10.90
11.40
7.50
4.50
3.50
4.20
2.00
2.50
3.80
6.80
7.52
5.94
8.37
17.55
17.83
11.17
TABLE 6.1 (C)

PRICES INDICES
Groups/
Fiscal Year
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Jul-Apr
2008-09
2009-10
Note:
General
44.84
48.14
56.03
65.00
72.22
81.62
86.99
92.51
94.15
100.00
102.01
107.77
116.29
124.14
136.68
146.17
170.15
201.10
200.57
223.15
B. Wholesale Price Index by Groups

Raw
Fuel, Lighting ManufacFood
Materials
& Lubricants
tures
45.42
43.78
34.09
52.38
50.24
48.67
34.83
54.63
57.23
62.55
40.81
63.67
67.50
72.16
44.90
73.40
75.44
75.95
52.95
79.88
84.37
87.01
62.17
89.41
90.45
93.81
69.65
91.62
96.55
103.21
75.81
94.45
97.09
92.39
83.16
98.76
100.00
100.00
100.00
100.00
101.95
100.31
103.14
101.87
105.62
115.51
115.95
103.67
112.99
135.12
119.23
111.83
125.03
110.44
138.01
113.05
133.78
121.93
174.57
116.27
145.67
138.85
184.10
119.91
173.27
156.57
223.34
128.33
213.54
184.45
258.96
140.67
212.52
236.75
181.86
226.56
258.80
293.70
Building
Materials
56.72
57.97
66.47
81.04
87.33
98.63
98.62
99.62
97.15
100.00
101.10
102.90
126.48
143.79
144.18
151.93
177.18
213.00
3. Sensitive
Price Indicator
46.26
51.22
57.26
65.85
72.90
81.98
88.01
93.68
95.39
100.00
103.37
107.06
114.38
127.59
136.56
151.35
176.78
218.16
4. GDP
Deflator
224.33
244.28
274.73
312.60
338.48
388.00
413.39
437.59
100.00
108.02
110.71
115.61
124.55
133.30
147.28
158.60
184.33
221.77
140.55
152.04
217.63
216.94
221.77
197.55
245.07
244.12
1) : WPI and SPI 1990-91 base year series have been converted into series with a base of 2000-01
2) : GDP Deflator base year 1980-81 = 100 has been changed with 1999-2000 = 100 as new base year
TABLE 6.2
MONTHLY PERCENT CHANGES IN CPI, WPI AND SPI
(Percent)
Months 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
A. CONSUMER PRICE INDEX (C.P.I) converted into Base year 2000-01
Jul
0.62
0.86
0.69
0.56
0.52
1.09
0.57
1.38
1.62
1.61
1.01
3.34
1.54
Aug
0.65
0.87
0.47
-0.06
0.75
0.31
0.66
0.58
0.04
1.25
1.32
2.14
1.70
Sep
0.63
0.11
0.38
0.98
0.14
0.19
0.60
0.38
0.50
0.32
2.13
0.97
0.45
Oct
0.40
0.49
0.92
0.45
0.53
0.16
1.47
1.19
0.94
0.36
1.23
2.12
0.95
Nov
0.74
0.48
0.09
0.9
0.32
0.31
0.60
1.12
0.76
0.73
0.14
-0.12
1.39
Dec
0.11
0.24
-0.11
-0.45
-0.61
-0.24
0.90
-0.85
-0.27
0.47
0.58
-0.50
-0.49
Jan
-0.05
-0.18
0.2
-0.16
0.06
0.06
-0.09
0.97
1.20
-0.88
1.91
-0.42
2.42
Feb
0.36
0.38
-0.02
-0.08
0.34
0.47
-0.34
0.99
0.33
1.04
0.49
0.95
0.39
Mar
1.77
0.35
0.88
0.48
1.36
0.04
1.02
1.29
0.23
0.49
3.08
1.37
1.25
Apr
0.45
0.27
0.56
0.34
0.33
0.33
0.96
1.74
1.02
0.31
3.04
1.41
1.73
May
0.15
-0.07
-0.11
-0.45
-0.67
-0.29
0.69
-0.44
0.45
0.92
2.69
0.23
Jun
0.47
-0.16
1.05
0.01
0.48
-0.21
1.12
0.10
0.59
0.20
2.10
0.99
B. WHOLESALE PRICE INDEX (W.P.I.) with Base 2000-01
Jul
0.33
1.14
0.07
-0.08
1.78
1.51
1.31
-1.00
1.99
1.42
1.70
4.35
0.70
Aug
0.14
1.39
0.18
0.75
0.30
1.66
0.98
-1.08
1.04
0.78
1.17
2.45
2.21
Sep
0.33
-0.13
0.52
1.55
0.21
0.59
0.34
0.40
0.54
0.44
1.62
-0.27
0.17
Oct
0.42
0.14
-0.29
0.90
-1.15
0.54
2.72
1.42
0.77
-0.49
1.82
-1.87
1.17
Nov
0.53
0.79
-1.44
1.18
-0.97
1.66
1.10
0.39
0.18
0.89
1.63
-5.11
2.78
Dec
0.30
0.03
-0.31
1.15
-0.65
0.70
1.39
-0.25
-0.13
0.37
-0.06
-1.97
0.20
Jan
0.01
0.59
0.30
-0.84
0.17
0.38
0.21
1.53
1.28
-1.20
1.78
0.15
4.23
Feb
0.34
0.60
1.05
-0.39
0.19
2.39
0.40
1.52
0.77
0.51
1.24
0.66
0.36
Mar
1.73
0.28
2.12
-0.16
1.28
0.15
1.77
1.39
0.07
1.02
3.99
0.42
2.53
Apr
0.50
-0.53
0.38
0.66
0.35
-1.17
0.32
1.61
1.23
1.16
4.30
1.68
1.84
May
0.50
0.21
-0.18
-1.38
-0.12
-1.09
0.98
-0.59
0.35
1.09
4.97
1.52
Jun
0.08
0.02
1.01
1.18
1.07
-0.27
0.59
0.71
63.00
1.10
2.98
2.40
C. SENSITIVE PRICE INDICATOR (S.P.I.) converted into Base year 2000-01
Jul
0.15
0.91
0.33
0.77
1.25
1.48
1.34
2.43
1.35
1.36
1.46
3.77
2.78
Aug
0.14
1.36
0.49
0.70
1.23
1.09
0.70
1.18
0.26
2.18
1.67
2.34
1.68
Sep
0.48
-0.49
0.16
0.99
0.91
1.04
0.75
0.29
0.23
0.41
2.63
0.51
0.56
Oct
0.36
0.59
-0.45
0.63
0.54
-0.24
2.34
0.53
0.05
0.56
1.47
2.70
0.35
Nov
0.94
1.63
0.13
0.39
0.34
1.09
2.64
1.94
0.88
2.34
0.85
-1.35
2.49
Dec
0.08
-0.31
-0.94
-1.16
-0.73
-0.64
1.31
-0.98
-0.24
0.76
1.45
-1.69
0.66
Jan
-0.24
-0.78
-0.23
0.15
0.15
0.23
-0.69
0.91
0.80
-1.32
2.67
-1.42
2.88
Feb
0.30
0.55
0.30
-0.55
1.29
0.42
-0.61
0.54
1.46
0.09
-1.33
0.85
0.56
Mar
0.51
-0.25
0.24
0.27
0.57
-0.01
1.30
1.07
0.84
-0.01
3.42
0.64
0.78
Apr
0.69
-0.45
0.77
-0.13
-0.62
-0.23
-0.51
1.29
1.33
0.09
5.48
1.68
0.43
May
0.13
0.73
0.92
-0.75
-1.69
-0.61
2.14
-1.02
0.65
1.37
5.41
1.27
Jun
2.01
0.57
1.59
0.70
1.37
0.24
1.31
0.70
0.45
1.48
1.56
1.17
Note : CPI, SPI and WPI 1990-91 base year series converted into Base Year 2000-01.
TABLE 6.3 (A)

PRICE INDICES BY CONSUMER INCOME GROUPS
Income Group/
Fiscal Year
All Income
Groups
Upto
Rs 3001 to
Rs 5001 to
Rs 3000
5000
12000
Spliced with Base Year 2000-01 = 100
42.43
42.85
43.18
47.03
47.40
47.70
52.03
52.13
52.11
57.80
58.00
58.05
65.86
65.73
65.16
72.86
72.76
72.22
81.37
81.41
80.71
87.81
87.43
87.07
92.71
92.67
92.18
95.66
95.85
95.70
100.00
100.00
100.00
102.97
104.88
103.44
105.95
106.70
106.68
111.61
112.18
111.72
123.01
123.16
122.26
132.47
132.44
131.51
143.52
143.42
142.05
163.98
163.64
160.24
200.20
199.83
194.91
1990-91
43.20
1991-92
47.41
1992-93
52.07
1993-94
57.94
1994-95
65.48
1995-96
72.55
1996-97
81.11
1997-98
87.45
1998-99
92.46
1999-00
95.78
2000-01
100.00
2001-02
103.54
2002-03
106.75
2003-04
111.63
2004-05
121.98
2005-06
131.64
2006-07
141.87
2007-08
158.90
2008-09
191.90
Jul-Apr
2008-09
190.54
198.79
198.44
2009-10
212.44
222.51
221.90
Note : CPI 1990-91 Base Year series have been converted into Base Year 2000-01
Above
Rs 12,000
43.09
47.51
51.62
57.61
64.18
71.42
79.71
86.05
91.41
95.50
100.00
103.64
106.83
111.39
121.35
131.45
141.19
156.32
186.86
193.51
185.55
216.11
206.30
TABLE 6.3 (B)

ANNUAL CHANGES IN PRICE INDICES AND GDP DEFLATOR
Fiscal
Consumer
Price
Index1
Wholesale
Price
Index1
Sensitive
Price
Indicator1
Annual
GDP
Deflator2
Year
1990-91
12.66
11.73
12.59
1991-92
10.58
9.84
10.54
10.07
1992-93
9.83
7.36
10.71
8.89
1993-94
11.27
16.40
11.79
12.47
1994-95
13.02
16.00
15.01
13.78
1995-96
10.79
11.10
10.71
8.28
1996-97
11.80
13.01
12.45
14.63
1997-98
7.81
6.58
7.35
6.55
1998-99
5.74
6.35
6.44
5.85
1999-00
3.58
1.77
1.83
2.78
2000-01
4.41
6.21
4.84
6.72
2001-02
3.54
2.08
3.37
2.49
2002-03
3.10
5.57
3.58
4.42
2003-04
4.57
7.91
6.83
7.74
2004-05
9.28
6.75
11.55
7.02
2005-06
7.92
10.10
7.02
10.49
2006-07
7.77
6.94
10.82
7.70
2007-08
12.00
16.64
16.81
16.21
2008-09
20.77
18.19
23.41
20.32
Jul-Apr
2008-09
22.35
21.44
26.33
20.32
2009-10
11.49
11.26
12.96
10.08
* : Provisional
1 : WPI, CPI & SPI Base Year = 1990-91 series have been converted into Base Year 2000-01
2 : GDP Deflator Base Year 1980-81=100 has been changed with 1999-2000 = 100 as new base year
TABLE 6.4
AVERAGE RETAIL PRICES OF ESSENTIAL ITEMS
(Rs/Unit)
Fiscal
Year
Wheat
(Av.Qlty)
Kg
Wheat
Flour
(Av.Qlty)
Kg
Basmati*
Moong
Gram
Rice
Pulse
Pulse
(Broken (Washed) (Av.Qlty)
Kg
Kg
Kg
Beef
(Cow/
Buffalo
with
bone)
Kg
25.51
29.62
32.49
35.63
40.68
47.29
54.01
55.44
55.83
56.78
56.01
55.19
61.21
75.45
94.83
106.84
117.87
123.30
143.82
Chiken
(Farm)
Kg
Mutton
Dry
(Goat) Eggs Hen Potato
Onion
Tomato
(Av.Qlty) (Farm) (Av.Qlty) (Av.Qlty) (Av.Qlty)
Kg
Doz.
Kg
Kg
Kg
1990-91
3.07
3.66
6.10
12.64
7.85
..
50.39
13.28
5.19
1991-92
3.62
4.20
6.97
16.16
8.70
..
53.86
15.95
6.32
1992-93
3.85
4.44
8.06
17.09
11.35
..
60.09
15.96
5.77
1993-94
4.28
4.93
8.77
17.09
11.72
..
69.94
18.69
5.81
1994-95
5.07
5.78
9.09
20.24
21.77
..
81.68
20.64
6.32
1995-96
5.14
5.90
11.27
21.86
21.67
..
91.71
21.37
10.45
1996-97
6.59
7.32
12.85
21.80
15.00
..
99.42
24.90
12.08
1997-98
7.96
8.64
13.40
28.45
20.22
57.24
103.37
29.73
9.31
1998-99
7.72
8.35
14.50
32.95
22.08
54.20
106.46
25.98
8.74
1999-00
8.19
8.92
15.71
30.05
25.07
50.90
108.64
24.27
9.38
2000-01
8.67
9.80
15.35
30.30
29.52
50.65
109.38
26.35
9.74
2001-02
8.29
9.67
15.49
34.36
34.89
52.04
111.53
28.57
11.43
2002-03
8.73
10.14
18.07
30.46
31.13
54.01
124.95
30.69
9.43
2003-04
10.25
11.71
19.04
27.98
24.17
57.50
154.31
30.03
8.58
2004-05
11.68
13.28
20.19
31.66
29.35
66.43
185.19
37.45
14.94
2005-06
11.55
13.06
20.16
47.28
31.12
66.08
202.10
35.07
18.18
2006-07
11.96
13.64
23.11
56.53
41.38
74.16
224.07
38.31
17.22
2007-08
16.44
18.07
37.77
52.67
44.78
83.39
236.49
49.45
15.22
2008-09
23.87
25.64
47.12
50.10
57.15
103.12
262.03
58.80
20.35
Jul-Apr
2008-09
23.85
25.39
48.03
50.46
58.83
141.59
103.00
258.36
60.67
20.59
2009-10
25.69
29.05
43.75
71.45
52.45
170.93
126.22
307.19
67.19
23.68
.. : Not Available
Note : Data for Period: 1990-91 - 2000-01 is based on 12 centres while data 2001-02 onward is based on 17 centres
7.70
4.17
7.16
6.88
7.76
7.65
9.22
10.45
15.32
6.85
10.72
9.59
8.70
11.09
13.82
12.05
20.95
16.28
25.77
12.52
8.75
11.64
14.64
18.22
14.05
14.35
20.34
19.60
15.25
17.24
17.12
13.30
19.10
25.03
19.48
27.43
28.50
29.67
26.53
25.68
31.31
27.98
(Contd.)
TABLE 6.4
Mustard
Oil
(Mill)
Kg
20.93
25.85
30.26
33.18
43.93
46.50
47.27
49.65
63.43
61.13
56.92
59.01
60.80
63.51
65.63
66.70
76.71
119.71
142.25
Vegetable Ghee
(Loose)
Kg
19.00
20.53
24.08
29.09
38.99
39.38
42.76
45.78
54.00
49.14
44.82
49.20
55.25
59.84
59.60
58.95
70.81
108.43
110.63
Rock
Salt
(Powder)
Kg
2.00
2.17
2.22
2.25
2.40
2.79
3.13
3.17
3.22
3.35
3.43
3.19
3.21
3.22
3.50
3.94
4.68
5.12
6.08
Red
Chilies
(Av.Qlty)
Kg
24.38
31.05
41.08
39.33
70.12
82.32
74.15
62.55
89.05
82.72
66.75
78.34
75.87
73.80
76.64
70.79
94.66
147.84
145.32
Fiscal
Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Jul-Apr
2008-09
144.21
110.69
6.00
148.59
2009-10
133.12
111.27
6.67
148.46
Note : Data for Period: 1990-91 - 2000-01 is based on 12 centres while data for
Period 2001-02 onward is based on 17 centres
Sugar
(Open
Market)
Kg
11.26
11.62
12.29
12.91
13.74
16.76
21.26
19.54
19.09
21.11
27.11
22.87
20.77
19.01
23.45
31.16
31.85
27.92
38.72
Gur
(Sup.
Qlty)
Kg
8.24
8.67
10.03
10.49
11.07
14.54
18.67
18.91
17.19
19.81
26.31
23.12
20.45
19.79
23.98
35.90
39.26
32.87
43.65
Milk
Fresh
(Ltr)
37.45
56.25
40.80
70.52
35.99
41.70
7.71
8.82
9.90
11.07
12.18
13.67
15.12
16.27
17.71
17.91
18.23
17.92
18.35
19.21
21.28
23.90
26.72
30.45
36.62
(Rs/Unit)
Tea in
Packet
(Sup.Qlty)
250 Gram
20.00
20.04
23.62
27.65
29.08
30.33
38.31
49.88
51.89
48.95
53.73
57.00
61.50
64.68
61.99
62.62
68.39
68.28
97.94
97.47
118.87
(Contd.)
TABLE 6.4
Fiscal
Year
Cigarettes
(Pkt)
3.48
3.56
3.60
3.61
3.75
3.69
3.90
3.79
4.19
5.04
5.01
5.82
6.06
6.08
6.90
7.23
7.98
8.38
9.11
Coarse
Latha
(Mtr.)
10.71
12.08
13.46
14.14
15.76
18.31
20.89
22.24
23.20
23.76
24.11
26.81
26.84
28.80
32.08
34.26
35.05
39.04
44.69
Voil
Printed
(Mtr.)
25.24
27.65
27.18
28.56
29.26
27.90
30.01
31.34
31.63
32.20
33.04
33.30
33.74
34.52
36.13
36.74
37.90
40.29
46.02
Shoes
Gents
Concord
(Bata)
429.95
149.95
149.95
185.78
224.95
299.95
337.70
339.00
342.96
381.29
399.00
399.00
428.17
499.00
492.33
399.00
429.00
499.00
499.00
Firewood
(Kikar/
Babul)
(40 Kgs.)
50.07
55.68
62.31
67.51
71.83
78.54
88.88
95.00
97.65
99.93
104.04
99.30
104.20
118.40
135.96
166.03
191.72
220.74
264.12
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Jul-Apr
2008-09
9.02
44.68
45.71
499.00
264.43
2009-10
11.21
46.57
48.10
499.00
293.53
2001-02 onward is based on 17 centres
Match
Box (40/
50 Sticks)
(Each)
0.35
0.44
0.49
0.49
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.51
0.51
0.51
0.53
0.62
0.71
0.92
1.00
Washing
Soap
707/555
(Cake)
2.49
2.72
3.01
3.52
4.14
5.03
5.95
6.18
6.57
6.81
6.90
7.37
7.48
7.48
7.47
7.73
8.13
9.78
12.51
1.00
1.00
12.49
12.78
(Rs/unit)
Lifebuoy
Soap
(Cake)
4.02
4.10
4.64
6.00
6.35
7.29
8.53
8.58
9.21
9.50
9.50
10.02
11.00
10.82
14.00
13.93
14.18
17.38
21.59
21.51
22.00
(Contd.)
TABLE 6.4
Electric
Bulb
(60-W)
11.03
11.98
12.00
12.28
13.00
13.29
14.94
14.96
15.42
16.00
14.10
14.00
13.30
12.69
12.07
11.43
11.95
12.68
14.83
Cooked
Beef
Plate
8.22
9.35
10.51
11.59
13.17
14.48
15.84
16.44
17.85
18.30
18.53
18.58
18.88
20.95
24.21
26.07
29.80
33.26
40.18
Cooked
Dal
Plate
5.52
6.08
6.59
7.28
8.36
9.43
9.95
10.40
11.12
11.35
11.87
12.42
13.09
13.86
14.71
15.65
17.84
20.46
25.59
Rice
Irri-6
Kg
4.84
5.66
6.41
6.62
7.07
9.09
9.99
10.48
12.09
12.51
11.56
11.51
12.23
13.06
15.41
16.05
17.59
29.32
39.35
Masoor
Pulse
Kg
18.77
23.70
21.75
19.87
20.20
28.01
30.79
34.49
35.84
36.03
36.97
38.41
38.41
35.40
43.11
45.01
44.54
71.41
122.16
Mash
Pulse
Kg
14.19
15.75
14.95
14.91
23.93
32.79
31.82
28.59
30.40
38.38
48.38
44.25
37.56
35.57
38.52
52.91
70.51
71.36
77.31
Fiscal
Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Jul-Apr
2008-09
14.30
39.83
25.38
40.31
123.46
75.54
2009-10
19.26
44.06
27.64
34.42
122.10
122.90
Period 2001-02 onward is based on 17 centres
Garlic
Kg
36.02
23.15
18.01
27.02
31.65
27.14
34.34
36.85
38.67
30.16
28.07
39.93
34.11
32.82
44.22
58.09
61.81
46.18
41.64
Cooking
Oil Dalda
2.5 Ltr
57.71
62.83
70.74
87.22
116.83
122.50
134.64
148.95
168.27
166.93
155.64
170.97
199.68
203.98
204.99
204.41
224.48
316.32
371.38
42.04
125.71
374.11
356.43
(Rs/unit)
Vegetable
Ghee
2.5 Kg
49.07
51.74
62.07
77.95
104.62
109.82
119.06
131.98
157.94
164.95
153.43
169.24
196.77
200.28
204.15
203.63
224.06
312.97
356.44
359.04
353.48
(Contd.)
TABLE 6.4
Tea Prepared
Cup
1.35
1.54
1.72
1.99
2.20
2.55
3.02
3.30
3.61
3.74
4.03
4.18
4.46
4.72
5.12
5.77
6.31
6.91
8.41
Lawn
Hussain
Mtr.
33.65
37.64
39.42
42.38
44.63
46.25
52.03
56.02
72.17
76.27
77.77
70.79
69.92
69.96
72.61
76.42
79.69
83.45
91.00
Shirting
Hussain
Mtr.
30.98
35.79
39.54
41.90
45.08
50.59
53.58
55.25
56.85
58.28
59.10
55.17
55.59
56.78
59.94
62.36
65.45
71.01
78.38
Fiscal
Curd
Banana
Year
Kg
Doz.
1990-91
9.98
11.66
1991-92
11.22
14.71
1992-93
12.49
19.06
1993-94
13.86
19.28
1994-95
15.25
21.04
1995-96
17.16
21.36
1996-97
18.74
20.37
1997-98
19.91
20.18
1998-99
21.75
21.25
1999-00
21.87
20.88
2000-01
22.43
22.11
2001-02
21.90
22.14
2002-03
23.35
21.96
2003-04
23.33
23.01
2004-05
25.75
25.11
2005-06
28.38
28.18
2006-07
31.34
32.51
2007-08
35.76
35.43
2008-09
43.38
39.62
Jul-Apr
2008-09
42.75
8.33
39.02
90.33
78.14
2009-10
49.00
9.92
39.78
94.66
81.16
Note : Data for Period 1990-91 - 2000-01 is based on 12 centres while data for
2001-02 onward is based on 17 centres
** : The unit has changed from 500 GM to 400 GM
Shoes
Lady
Bata
156.20
174.95
174.95
181.68
191.95
211.90
248.03
249.00
269.42
319.00
319.00
319.00
342.23
364.00
252.33
299.00
299.00
299.00
372.33
371.00
379.00
Chappal
Gents
Spang
33.97
36.95
36.95
46.31
55.95
63.83
78.70
79.00
79.00
79.00
79.00
79.00
79.00
79.00
86.53
89.00
92.00
101.50
127.33
(Rs/Unit)
Bread
Milk PowPlain
der Nido
M.Size
500 grams
4.34
217.27
5.01
74.59
5.78
84.96
6.55
90.40
7.40
105.47
7.99
79.01
9.09
91.00
10.31
102.40
10.39
105.82
10.96
110.00
11.17
114.03
11.14
116.00
11.16
88.00 **
11.77
94.75
13.25
102.62
14.23
108.50
15.34
121.47
18.43
145.93
24.17
168.48
127.00
23.91
167.18
129.00
26.23
180.00
Source : Federal Bureau of Statistics.
TABLE 6.4
AVERAGE RETAIL PRICES OF ESSENTIAL ITEMS (Average of 12 Centers)
Fiscal
Year
Kerosene
(per ltr.)
Gas
Charges
Elect
Charges
(upto
50 units)
1.28
1.46
2.18
2.45
2.54
2.47
2.14
2.49
2.76
3.18
(100 cf)
1990-91
2.57
1991-92
5.90
1992-93
5.96
1993-94
7.01
1994-95
7.36
1995-96
8.27
1996-97
10.66
1997-98
11.60
1998-99
11.72
1999-00
13.00
231.44
2000-01
16.84
248.55
2001-02
18.58
259.26
2002-03
22.48
259.35
2003-04
24.95
79.45 *
2004-05
29.11
84.6*
2005-06
36.19
88.92
2006-07
39.09
99.79
2007-08
43.44
97.17
2008-09
66.79
96.91
Jul-Apr
2008-09
67.52
96.30
3.16
2009-10
71.45
105.10
3.58
Note : Data for Period 1990-91 - 2000-01 is based on 12 centres while data
for 2001-02 onward is based on 17 centres
- : Not Available
* : The unit has been changed form 100 CM to 100 CF
Petrol
Super
(per ltr.)
28.23
29.34
31.60
33.08
33.69
40.74
55.12
56.00
57.83
67.68
Tele
Local Call
Charges
(per Call)
2.10
2.22
2.31
2.31
2.31
2.31
2.31
2.31
2.31
2.38
69.72
2.37
66.49
2.42
TABLE 6.5
INDICES OF WHOLESALE PRICES OF SELECTED COMMODITIES (Base Year 2000-01 = 100)
Fiscal
Year
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Jul-Apr
2008-09
2009-10
Wheat
116.48
122.77
136.04
161.26
163.26
206.13
246.80
241.28
258.66
270.76
Rice
110.40
122.28
130.94
141.25
167.12
185.50
197.08
239.88
245.11
227.63
Gram
(Whole)
116.50
148.18
220.32
313.71
303.57
199.41
260.78
307.41
370.24
430.67
Sugar
Refined
103.64
110.57
115.96
123.67
152.97
192.12
175.98
173.03
191.58
250.69
100.00
96.10
101.12
191.89
137.24
135.61
139.21
190.75
277.87
100.00
109.64
126.09
138.50
153.40
154.78
175.54
285.63
356.43
100.00
84.23
71.40
74.17
95.52
127.43
147.79
139.22
181.83
100.00
82.36
75.32
67.72
85.18
120.70
118.80
98.78
142.52
277.28
305.03
364.56
318.21
180.78
215.60
137.71
205.34
Vegetable Ghee
Tea
Meat
105.52
100.82
110.71
123.78
119.10
121.02
151.04
136.40
140.28
205.90
148.50
162.40
208.27
157.91
162.86
224.41
197.75
201.85
241.78
255.96
210.00
285.78
266.35
214.95
249.13
254.60
218.60
231.63
270.93
220.17
(Base Year 2000-01 = 100)
100.00
100.00
100.00
114.12
99.28
102.04
130.34
96.93
111.10
141.44
96.94
137.55
137.41
93.78
169.19
136.94
93.99
185.95
164.73
100.48
201.01
249.36
100.92
207.99
254.49
134.83
242.43
255.36
259.62
134.15
158.61
238.75
285.83
Vegetables
96.82
107.36
143.43
155.19
173.71
188.93
231.40
196.69
195.92
201.60
Fresh
Milk
110.71
126.15
142.92
163.96
190.39
218.18
216.25
245.85
252.28
252.86
Cotton
106.04
119.20
168.20
207.62
210.57
242.89
245.84
261.55
213.72
253.59
Motor
Fuels
102.50
103.37
123.39
124.80
139.42
173.35
188.14
204.46
239.48
317.82
100.00
107.57
101.65
116.00
144.06
160.14
161.14
163.85
204.04
100.00
99.79
100.50
105.41
113.43
122.83
133.31
154.42
184.75
100.00
91.31
110.46
144.44
95.23
103.91
110.92
136.71
153.12
100.00
102.90
106.80
111.03
134.78
181.46
181.38
192.88
216.16
208.48
261.47
183.33
203.92
151.95
188.25
220.85
218.32
(Contd.)
TABLE 6.5
INDICES OF WHOLESALE PRICES OF SELECTED COMMODITIES Base Year (2000-01 = 100)
Fiscal
Year
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
Other
Oils
100.39
101.23
120.72
122.47
141.59
209.46
228.68
229.82
272.45
383.08
Fire
Wood
111.43
124.16
133.68
142.95
153.83
175.15
190.80
199.33
207.73
214.21
Cotton
Yarn
105.40
103.44
137.83
173.62
184.24
201.58
199.64
203.63
200.74
207.98
Matches
107.59
117.63
120.69
120.73
122.99
184.13
208.14
208.14
205.67
206.29
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Jul-Apr
2008-09
2009-10
100.00
103.59
128.10
139.86
169.56
227.55
237.63
264.00
372.04
100.00
101.33
103.94
115.41
127.94
152.23
176.28
205.70
247.76
100.00
95.35
98.06
121.03
106.36
108.07
112.66
112.15
104.21
100.00
100.55
100.55
105.61
107.66
107.67
107.67
111.86
124.26
371.99
429.13
245.42
272.13
101.60
131.79
124.26
124.26
FertiSoaps
lizers
105.27
109.71
116.70
113.37
140.04
153.70
146.33
178.99
171.03
198.95
209.33
247.69
200.54
256.19
212.66
277.59
222.75
316.24
224.58
302.96
Base Year 2000-01 = 100
100.00
100.00
103.89
102.26
109.00
113.59
110.68
123.64
122.81
140.95
122.05
156.16
127.73
147.70
147.59
215.18
176.29
310.97
180.91
182.63
294.32
293.48
Transport
103.24
116.55
135.89
167.72
216.71
234.60
234.81
236.57
255.29
265.68
Leather
109.57
109.58
115.54
124.50
138.98
162.65
152.12
128.27
133.20
140.07
Timber
114.90
130.28
144.50
161.57
175.41
202.36
220.08
227.06
239.02
253.52
Cement
108.00
114.13
137.61
169.92
166.18
200.32
212.05
216.99
212.65
215.14
100.00
106.66
106.82
108.70
110.39
111.71
114.94
114.99
123.95
100.00
100.00
95.23
93.64
102.77
110.65
111.86
121.84
129.83
100.00
101.45
101.25
121.75
140.93
142.05
162.09
170.93
201.11
100.00
100.42
102.77
102.45
104.82
122.67
127.42
111.61
139.83
124.01
127.33
128.74
207.85
146.06
134.15
209.22
129.79
BalanceofPayments
Theglobaleconomic downturnimpactedworldoutputandtradevolumesadverselyduring2009.The
contraction in global trade was the sharpest since World War II, with trade volumes falling over 10
percent. With an upturn underway in the world economy for the past two quarters, the outlook for
global trade appears to have become more positive, as depicted by the modest improvement in the
BalticDryIndex,akeyearlygaugeofglobaltradevolumes(Fig1).
Fig1:BalticDryIndex
Source:Bloomberg
Amidstilldifficultglobaleconomicconditions,largecoststoexportsimposedbythewaronterror1,and
a severe energy crisis faced by Pakistans economy, the external sector witnessed an overall
improvementduring200910.Thisrecoverywasmainlycontributedbyasharpnarrowingofthecurrent
account deficit which more than offset the declining financial account surplus during the period. In
addition,macroeconomicstabilizationmeasurestakenbythegovernmentalsosignificantlycontributed
tooverallimprovementintheexternalsectorofPakistan.
The external current account deficit is expected to contract to around 2.8 percent of GDP in the
outgoingyear.Thislargeimprovementismainlyonthebackofasteepdeclineinimportsformuchof
theyear,improvingexportsasworlddemandisgraduallyrestored,andacontinuedincreaseinworker
remittances,whichareexpectedtoreach4.8percentofGDPforthefullfiscalyear.Workerremittances
haveincreasedfromUS$6.4billioninJulyApril200809toUS$7.3billionintenmonthsofthecurrent
According to The Global Enabling Trade Report 2010, Pakistan ranked 123 out of 125 countries of the world in terms of
business cost of terrorism.
87
fiscalyear(JulyApril).Alargepartoftherecentincreaseinremittances,whichappearstobesecularin
nature, has emanated from a policy initiative of the government in early 2009 called the Pakistan
Remittance Initiative (PRI). With the potential for formalising the remittances market estimated
betweenUS$16billion(WorldBank)andUS$21billion(PRI)annually,furthersuccessonthisfrontcan
havefarreachingpositiveeffectsonstabilityofPakistansbalanceofpaymentsintheyearsahead.
An added factor that is likely to extend support to the external account in the months ahead, and
possiblyformuchof201011,isthecollapseinglobalcommoditypricesinducedbytheEurozonewide
contagionfromtheongoingGreekdebtcrisis.SincethestartofthedifficultiesinGreeceearlierin2010,
international oil prices have fallen by over 11 percent. However, developments on this front could
potentiallyalsoimpactremittancesandexports,especiallyifthefalloutisnotcontained,andspreadsto
otherregions.Onbalance,itappearsfornowthat,inimmediatetermsatleast,thedeflationinimport
paymentswilloutweightheotherfactors,asevidentfromFigure2.Ifso,thiscouldinsulatetheexternal
accountfrompressureinthenearterm.
Import
Export
April10
March
February
January
December
November
October
September
August
July09
%Growth
Fig2:MonthlyExport&ImportGrowth
50.0
40.0
30.0
20.0
10.0
0.0
10.0
20.0
30.0
40.0
50.0
Source:FBS
7.1TradeBalance2
Pakistans merchandise trade deficit improved by 13.9 percent in JulyApril 200809 from $ 14,218
millionto$12,238millionduringJulyApril200910.Unlikelastyearwhenthedeclineintradedeficit
wasmainlycontributedbymassivefallinimportexpendituresduetodeclineininternationalprices,this
yearsimprovementintradedeficitremainedbroadbased,withbothexportsandimportscontributing
tothedecline.
Exports recorded growth of 8.0 percent during JulyApril 200910 on the back of recovery in export
markets of the country, exchange rate depreciation, and improved production of crops. Moreover,
during JulyApril 200910, export receipts of the country surpassed the full year official target of 6.0
percent exports growth for 200910. Exchange rate depreciation, reduced imports prices and slower
The analysis of trade balance, exports and imports is based on trade data released by Federal Bureau of Statistics (FBS) on
customs basis.
88
BalanceofPayments
domestic demand remained the major factors behind the decline in imports during the period under
review. The import bill of the country decreased by 2.8 percent during JulyApril 200910 over the
comparableperiodoflastyear.
The narrowing trend in monthly trade deficit started to reverse since December 2009 when it
deteriorated by 59.9 percent and reaching at 41.9 percent deterioration in the month of march
2010.However,tradeaccountofthecountryhasonceagainwitnessedanimprovementof13.9percent
inthemonthofApril2010overthesamemonthlastyear.Keepinginviewmonthlytrendvariationsin
tradedeficitduringtheperiodandincreasingmonthlyimportbillalongwithexpectationsofincreasein
internationaloilprices,it isexpected that countrystradedeficitmay comeunder pressureincoming
months.
7.2Exports
Exportsamountedto$15.9billioninJulyApril200910asagainst$14.7billioninsameperiodlastyear,
showing a growth rate of 8.0 percent compared to the negative growth rate of 3.0 percent in same
periodlastyear.Higherquantumexportofitemslikerice,fruitsandrawcottonduetotheirimproved
production in country along with recovery of international demand and exchange rate depreciation
weremajorreasonsfortheincreaseinexportsduringtheperiodunderreview.
Within the broad categories of exports, all major sectors witnessed positive growth during JulyApril
200910overthecorrespondingperiodoflastyear.
TextileswhichisamajordriveroftheexportsofPakistancaptured53.3percentshareintotalexports
duringcurrentfiscalyearandwitnessedanabsoluteincreaseof$556.2millionduringJulyApril200910
oversameperiodlastyear(seeTable7.1).
Nontextile exportsgrew by9.2percentduring JulyApril200910overthe 5.3percent growthratein
sameperiodlastyear.Thisyearsgrowthofnontextilegrouphasbeencontributedbypositivegrowth
rates of food group (7.1 percent), petroleum group (7.3 percent) and all other items group (65.9
percent).
FoodGroup exportincreasedby7.1percentduringJulyApril200910when comparedwith thesame
period last year. Furthermore, food groups share remained at 17.2 percent in total exports and it
contributed15.3percenttothisyearsoverallexportgrowth.
With a 66 percent share in food group and 11.4 percent in overall exports of this year, rice exports
witnessedagrowthrateof7.5percentduringtheJulyApril200910overthesameperiodlastyearon
thebackofincreaseinquantumexportofrice.
Theoverallincreaseinexportofricecamefromnonbasmatiriceasquantityexportofnonbasmatirice
increasedby100.5percentcomparedto2.7percentincreaseinexportsquantumofbasmatiriceduring
JulyApril200910overthecorrespondingperiodlastyear.
Quantity export of rice increased by 66.0 percent on the back of improved domestic production and
higherimportdemandfromcountriesKenya,IranandSaudiArabia.Inadditiontorice,fruitsandhalal
meat&meatpreparationremainedthemajorcontributortoincreaseinfoodexportsduringtheperiod.
The increase in fruits exports has been led by improved harvest, better marketing strategies and
improvedmarketaccess.
89
A significant recovery has been witnessed in the group of textile exports. As textile exports grew
positivelyby7.0percentduringJulyApril200910overthe9.3percentfallinsameperiodlastyear.This
recovery in textile exports is led by higher than targeted production of cotton crop and recovery in
externaldemand.
Table7.1:ExportPerformance,MajorCategories
($Millions)
JulyApril
Particulars
A.FoodGroup
Rice
Fish&FishPreparation
Fruits
Meat&MeatPreparation
AllotherFoodItems
B.TextileManufactures
RawCotton
CottonYarn
CottonCloth
Knitwear
BedWear
Towels
ReadymadeGarments
MadeupArticles
OtherTextileMaterials
C.PetroleumGroup
PetroleumProducts
PetroleumTopNaphtha
D.OtherManufactures
Carpets.Rugs&mats
SportsGoods
LeatherTanned
LeatherManufactures
SurgicalG.&Med.Inst.
Chemicals&Pharma.Pro.
EngineeringGoods
Jewellery
Cement
Allothermanufactures
E.AllOtherItems
Total
*:Provisional
200910*
200809
2,727.9
1,807.0
182.1
208.8
81.6
399.0
8,461.7
194.2
1,211.0
1,466.0
1,424.2
1,400.0
553.3
1,059.6
439.6
713.8
773.3
456.2
316.9
2,990.4
117.0
236.5
255.8
368.6
190.1
621.6
197.1
397.0
394.2
212.5
930.8
15,884.1
2,547.8
1,681.3
193.6
134.6
58.4
421.8
7,905.5
80.8
916.5
1,641.4
1,434.3
1,408.6
527.8
1,007.1
396.8
492.1
720.5
401.1
319.1
2,968.6
126.7
227.2
252.9
470.9
211.7
509.4
210.5
195.9
475.3
288.0
561.0
14,703.3
%Change
7.1
7.5
6.0
55.1
39.8
5.4
7.0
140.2
32.1
10.7
0.7
0.6
4.8
5.2
10.8
45.0
7.3
13.7
0.7
0.7
7.7
4.1
1.1
21.7
10.2
22.0
6.3
102.6
17.1
26.2
65.9
8.0
Absolute
Increase/
Decrease
180.1
125.6
11.5
74.1
23.2
22.8
556.2
113.3
294.5
175.4
10.1
8.6
25.5
52.5
42.8
221.7
52.8
55.1
2.2
21.8
9.8
9.3
2.9
102.3
21.6
112.3
13.4
201.1
81.1
75.5
369.8
1,180.8
%Share
17.2
11.4
1.1
1.3
0.5
2.5
53.3
1.2
7.6
9.2
9.0
8.8
3.5
6.7
2.8
4.5
4.9
2.9
2.0
18.8
0.7
1.5
1.6
2.3
1.2
3.9
1.2
2.5
2.5
1.3
5.9
100.0
Source:FBS
Lowvalueaddedproductslikerawcottonandcottonyarnfetchesthemajorshareofcontributionin
the textile group on the back of factors like early and better production of these crops along with
restorationofexternaldemandspecificallyfromChina.Theexportreceiptsfromrawcottonandcotton
yarngrewby140.2percentand32.1percentduringJulyApril200910overthesameperiodlastyear,
while contributing additional $ 113.1 million and $ 294.5 million amount to this years export,
respectively.Furthermore,quantumexportsofrawcottonandcottonyarnincreasedby116.4percent
90
BalanceofPayments
and29.0percentrespectivelyduringJulyApril200910.
The export performance of high value added like knitwear, bed wear and readymade garments has
shownmixedtrendintermsoftheirgrowthinquantity,valueandprice.Thequantityexportofknitwear
and readymade garments witnessed decline of 8.1 percent and 7.4 percent respectively during the
period. This fall in quantum exports mainly owed to unfavourable conditions in advanced economies
anddomesticproblemslikeenergycrisis.
While bed wear witnessed negative growth in value of its exports mainly due to lower international
pricesasquantumexportincreasedduringtheperiodreflectingimprovementinexternaldemand.
BoxItem1:MappingPakistansMajorExportsWithFastestGrowingProductsofWorld
Acomparative analysis ofproduct wise shares inWorldexports and Pakistans exports exhibits amixed picture.
Pakistansmajorexportscategoriesremainedtextile,manufactures,othermanufacturesandfoodhavingsharesof
51.0percent,24.0percent,24.0percentand15.0percentrespectivelyduringFY09whereas,theworldsexports
during2008areconcentratedinmanufactures,machinery&transportequipment,fuelandminingproductsand
fuelswiththeshareof67.0percent,34.0percent,23.0percentand18.0percentrespectively.Thisanalysisshows
thatthereissignificantdivergencebetweenpatternsofworlddemandandtheitemswhichPakistanisexporting.
Thedivergenttrendshowstheexistenceofstructuralrigiditiesintheexportbaseofthecountry.
MerchandiseTradebyProduct
%Sharein
%Sharein
Commodities
World
Pakistans
Exports2008
Exports(FY09)
Manufactures
67
24
Machineryandtransportequipment
34
*
Othermachinery
12
1
Otherchemicals
8
1
Automotiveproducts
8
*
Othertransportequipment
4
Telecommunicationsequipment
4
Ironandsteel
4
EDPandofficeequipment
4
Pharmaceuticals
3
1
Integratedcircuits
3
Fuelsandminingproducts
23
Fuels
18
5
Agriculturalproducts
9
Food
7
15
Othermanufactures
8
24
Miscellaneousmanufactures
4
Personalandhouseholdgoods
2
Textiles
2
51
*:NotMeaningful,:NotAvailable
Avg.FiveYears
GrowthRate
World
Pakistan
14
14
17
*
15
24
16
18
11
18
15
14
27
16
7
9
30
31
45
15
15
19
13
14
12
13
8
4
Source:WTO&SBP
ComparinggrowthinthesemajorexportitemsofPakistanwiththeworldexportgrowthofthesamecategories
suggeststhatwiththeexceptionoftextiles,majorexportcommoditieshavemanagedsignificantgrowthinthelast
fiveyears.Infact,growthrateofmostmajorexportcommoditiesofPakistan(withtheexceptionoftextiles)during
91
thelastfiveyearshasaveragedhigherthanworldgrowthrates.Whileexportsoftextile,whichisconsideredtobe
theitemofcomparativeadvantage,haveexhibitedgrowthof4.0percentagainstworldgrowthof8.0percentin
thesameitemsrespectively.
Petroleumgroupexportvalueincreasedby7.3percentduringthefirsttenmonthsofthecurrentfiscal
year as compared to same period last year. This increase in the group of petroleum mainly owes to
increase in quantum export of petroleum products which grew by 19.3 percent during the period.
Moreover,the4.5percentcontributionintheincreaseoftotalexportsfortheperiodJulyApril200910
camefromthisgroup.
Othermanufacturegroupexportincreasedby0.7percentduringJulyApril200910comparedtosame
period last year. Jewellery exports have exhibited a stellar growth of 102.6 percent during JulyApril
200910 over the corresponding period last year and its share in other manufacture group has also
increased from 7.0 percent to 13.0 percent during period under review. Furthermore, 17.0 percent
contributionintheincreaseintotalexportscamefromthissingleitemduringtheperiod.
Withtheincreaseof52.6percentgrowthduringthelastyear,cementexportdeclinedabruptlyasitfell
by17.1percentduringcurrentperiodJulyApril200910.Thisperformancebycementsectorwasbroad
based as both the quantum and per unit price of exports witnessed decline of 1.7 percent and 15.7
percent respectively during the period under review. Cement export fell because of decline in its
externaldemandandexpectedincreaseincompetitionfacedbycementindustryespeciallyfromSaudi
Arabia.
Despiteofdeclineinoverallexportsgrowthby6.3percentinengineeringgoods,theexportsofitems
likeelectricfans,transportequipmentsandotherelectricalmachineryinengineeringgoodswitnessed
anincreaseinexportof38.0percent,82.2percentand19.5percentrespectivelyduringJulyApril2009
10 over the same period last year. The quantum export of electrical fans increased by 45.9 percent
duringtheperiodonthebackofincreasedexternaldemandbydifferentimportmarketsoftheworld
i.e.Africa,MiddleEastandSouthAsia.
The category of leather manufacturers exports declined by 21.7 percent during JulyApril 200910
comparedtosameperiodlastyearasallthreesubitems(i.e.leathergarments,leatherglovesandother
leather manufacturers) witnessed negative growth due to low external demand, lack of modern
technologies, law and order situation, low skilled labour and energy crises. Furthermore, competition
fromotherregionaleconomiesalsohinderedtheexportsofleatherindustry.
7.2aConcentrationofExports
During current fiscal year 200910, countrys major exports followed previous years trend of being
concentratedinfiveitems(cottonmanufacturers,leather,rice,synthetictextileandsportsgoods).These
fivecategoriesaccountsfor70.9percentshareinthetotalexportsduringJulyMarch200910(seeTable
7.2).Intensityofconcentrationfurtherdeepenswhenanalyzedwithinthesefiveexportitems,as51.3
percentcontributioninthetotalexportscamefromcottonmanufacturersduringJulyMarch200910.
92
BalanceofPayments
Table7.2:PakistansMajorExports(PercentageShare)
JulyMarch
0809
0910*
52.3
51.3
Commodity
0203
0304
0405
0506
0607
0708
0809
Cotton
Manufacturers
Leather
Rice
SyntheticTextiles
SportsGoods
SubTotal
OtherItems
Total
*Provisional
63.3
62.3
57.4
59.4
59.7
51.9
52.2
6.2
5.0
5.1
3.0
82.6
17.4
100
5.4
5.2
3.8
2.6
79.3
20.7
100
5.8
6.5
2.1
2.1
73.9
26.1
100
6.9
7.0
1.2
2.1
76.6
23.4
100
5.2
6.6
2.5
1.7
75.7
24.3
100
5.8
5.4
5.6
4.3
9.8
11.2
11.4
11.4
2.1
1.6
1.4
2.4
1.6
1.5
1.5
1.5
71.2
71.9
72.2
70.9
28.8
28.1
27.8
29.1
100
100
100
100
Fig3:ExportsConcentration
%Share
In spite of the structure of exports having

concentratedinfewitems,ithaswitnessedagradual
change,astheshareofotheritemsinoverallexport
increased from 17.4 percent in 200203 to 29.1
percentinJulyMarch200910(seeFig3)whichisan
encouragingsignfortheexportsectorofPakistan.
90
80
70
60
50
40
30
20
10
0
SubTotalofFiveItems
OtherItems
0910
0809
0708
0607
0506
0405
0304
0203
Textile is the major driver of export sector of

Pakistan.Itnotonlyemploysthebulkoflabourforce
but also earns much needed foreign currency.
Generally textile manufacturer sector is segmented
intotwomajorpartsconsistingoflowandhighvalue
added items. Being an agrarian country and ample
availability of raw material required to produce
Source:FBS
higher quantity of high value added items like
knitwear, bed wear, towels and ready made
garments,Pakistancanonlymanagetosustainthefixedamountofshareofhighvalueaddeditemsin
exportsinplaceofincreasingitsshareintotalexports.Asevidentfromthetablegivenbelow,theshare
ofhighvalueaddeditemsremainedinthebandof50to60percentsharesince20012002.Furthermore
this overall trend began to deteriorate after its peak year of 200506 when the share of value added
itemswas58.0percentintotaltextileexportsanditiscontinuouslyondeclinesinceandstoodat52.7
percent share in overall textile manufacturer during JulyMarch 200910 over 54.4 percent in same
periodlastyear(seeTable7.3).
Table7.3:ExportofTextileManufactures(%Share)
Item
0102
0203
0304
0405
0506
0607
0708
0809
CottonYarn
CottonCloth
Knitwear
Bedwear
Towels
Tents,Canvas&
Tarpaulin
Readymade
16.1
19.6
14.6
15.9
4.6
0.9
12.9
18.6
15.9
18.4
5.2
1.0
14.0
21.3
18.1
17.2
5.0
0.9
12.7
23.3
18.9
16.4
5.9
0.8
13.7
21.6
17.6
20.8
5.8
0.3
13.6
19.3
18.7
19.0
5.7
0.7
12.5
19.4
18.0
18.3
5.9
0.7
11.7
20.5
18.2
18.2
6.7
0.6
JulyMarch
0809 0910*
11.6
14.1
21.0
17.2
18.3
17.0
17.8
16.6
6.6
6.5
0.7
0.6
15.1
15.1
12.4
12.9
13.8
13.2
14.0
12.9
12.7
12.6
93
Table7.3:ExportofTextileManufactures(%Share)
Item
Garments
SyntheticTextiles
MadeupArticles
Others
*Provisional
0102
0203
0304
0405
0506
0607
0708
0809
7.1
6.1
100
7.9
5.0
100
5.9
5.2
100
3.5
5.5
0.1
100
2.0
4.3
0.1
100
4.0
4.5
1.3
100
3.9
5.2
2.1
100
2.9
5.0
3.3
100
JulyMarch
0809 0910*
2.6
4.4
5.0
5.2
3.7
5.8
100
100
Source:FBS
7.2bCompositionofExports
Theshareof primary,semimanufacturedandmanufacturedproductsin compositionofexportssince
199495 have remained more or less stagnant. As approximately three fourths of Pakistans exports
constitute of manufactured goods (see Table 7.4).This stagnation indicates slow movement towards
sophisticationthroughtechnologyandinnovation.Morerecently,theincreaseinprimarycommodities
exportsowestoimprovedproductionofcottoncropsandamidstofrevivalofexternaldemand.Whilea
dipinmanufacturedgoodcanbeattributedtolowerpricesonexternalfactorandondomesticfront,
themainfactorisenergycrisisfacedbytheexportsector.
Table7.4:CompositionofExports
Year
(%Share)
12
11
10
Manufactured
Goods
77
75
74
9
11
74
71
PrimaryCommodities SemiManufactures
200607
200708
200809
JulyMarch
200809
200910*
*Provisional
11
14
16
17
18
Total
100
100
100
100
100
Source:FBS
7.2cDirectionofExports
While the composition of exports remains fairly concentrated, Pakistan has achieved significant
geographicaldiversificationofitsexports.Duringtheyear20012002,54.9percentofPakistaniexports
were concentrated in seven major exports markets (USA, Germany, Japan, UK, Hong Kong, Dubai and
Saudi Arabia) and the remaining exports share of 45.1 percent consists of all other countries. This
concentrationofexportmarketcontinuouslydeclinedsince20012002andpresently31.6percentshare
of exports is held by six major countries (see Table 7.5) with the remaining countries making up 68.4
percentofexports.
Notwithstanding the reliance on fewer exports markets as evident from the percentage share of
differentexportdestinationsduringJulyMarch200910.WhichsuggeststhattheUSAcapturedthe17.3
percentshareinallexportmarketsofcountryandstillcontinuedtosustainthelargestexportmarketof
thecountry.
94
BalanceofPayments
Table7.5:MajorExportsMarkets(PercentageShare)
Country
0102
0203
0304
0405
0506
0607
0708
0809
USA
Germany
Japan
UK
HongKong
Dubai
SaudiArabia
SubTotal
Other
Countries
Total
*Provisional
24.7
4.9
1.8
7.2
4.8
7.9
3.6
54.9
23.5
5.2
1.3
7.1
4.6
9.0
4.3
55.0
23.9
4.9
1.1
7.6
4.7
7.3
2.8
52.3
23.9
4.8
1.1
6.2
3.9
3.3
2.5
45.7
25.5
4.2
0.8
5.4
4.1
5.6
2.0
47.6
24.6
4.1
0.7
5.6
3.9
1.1
1.7
41.7
19.5
4.3
0.7
5.4
2.7
0
2.0
34.6
18.9
4.2
0.6
4.9
2.1
0
2.6
33.3
JulyMarch
0809
0910*
18.6
17.3
4.3
4.2
0.7
0.5
4.8
5.5
2.2
2.1
0
0
2.4
2.0
33.0
31.6
45.1
45.0
47.7
54.3
52.4
58.3
65.4
66.7
67.0
100
100
100
100
100
100
100
100
100
100
Source:FBS
68.4
7.3Imports
ImportgrowthduringJulyApril200910declinedby2.8percentagainstthecorrespondingperiodlast
year. Lower international prices, compressed domestic demand, exchange rate depreciation and
improvedproductionofcotton cropsremained the majorfactorsbehind the overalldeclineinimport
bill.Amongthemajorimportgroups:food,machineryandtelecomgroupswitnessedadeclineduring
JulyApril 200910 while Petroleum, consumer durables, raw materials and other items groups
witnessedanincreaseingrowthduringtheperiodunderreview(seeTable7.6).
Foodgroupimportsdeclinedby21.3percentduringJulyApril200910overthecorrespondingperiod
last year, on absolute terms food group declined by $ 754.9 million against the $ 107.9 million
contractioninthecorrespondingperiodofJulyApril200910.Inadditiontothat,foodgroupwitnessed
highestdeclineinabsolutetermsduringthe period.Thisdeclineinfood groupis mainly attributedto
reducedquantumimportasunitvaluesofmostoffooditemsremainedhigherduringJulyApril200910
oversameperiodlastyear.
Withinfoodgroupitems,wheatimportbillwitnessedthemaximumdeclineof96.4percentontheback
ofsufficientavailabilityofwheatinthecountryaswheatquantityimportfellby97.2percent.Importbill
ofedibleoilfellby12.5percentduetocontractioninitspriceandquantityimports.Ontheotherhand,
thehighestgrowthinimportbilloffoodgroupwaswitnessedinsugarwhichincreasedby591.6percent
duringJulyApril200910againstthesameperiodlastyearmainlyasaresultoftheeffortstoimprove
thedomesticsupplyconditionofsugarinthecountry.Boththepriceandquantityeffectcontributedto
this increase in sugar import bill but quantum import effect remained higher than the price effect as
quantityofimportedsugarincreasedby430.7percentandunitvalueofsugarincreasedby30.3percent
duringJulyApril200910overthecorrespondingmonthoflastyear.Furthermore,theimportbilloftea,
pulsesandmilk&milkfoodalsoincreasedsubstantiallyduringthisperiod.
Machinery groupimportdeclinedby10.6percentduring JulyApril200910overthesameperiodlast
yearandwitnessedadeclineof$460.0millioninabsolutetermsduringcurrentfiscalyear200910.The
highest decline was observed in construction & mining machinery, which declined by 43.4 percent
duringperiodunderreview.Withthemajorshareofabout32.2percentinmachinerygroup,Importof
powergeneratingmachinerywitnessednegativegrowthof11.0percentduringJulyApril200910over
66.5 percent expansion during the same period last year which suggests accumulation of higher
95
inventoriesduringlastyeartherebylowerdomesticdemandduringcurrentfiscal200910.
Import of agricultural machinery posted an increase of 130.6 percent growth during the period under
reviewwithanadditionof$101.9millioninoverallimportbillofthecountry.Thisgrowthinagriculture
machineryisledbyincreasedimportoftractorsandpartsoftractorsonthebackofprojectslikeGreen
andBenazirTractorSchemes.Furthermore,majorityofagriculturemachineryconsistsoftractorsandits
parts.
Textile machinery import witnessed substantial growth of 20.5 percent during JulyApril 200910 over
the49.0percentdeclineincorrespondingperiodlastyear.Thiscanbeseenasareflectionoftherevival
intextilerelatedactivitiesinthecountry.
Import bill of petroleum group expanded by 1.3 percent during JulyApril 200910 over the
corresponding period last year. This rise in import bill of country is mainly caused by higher quantum
import of the petroleum product category which increased by 24.1 percent during JulyApril 200910
comparedtosameperiodlastyear.Ontheotherhand,quantumimportofpetroleumcrudecategory
witnessed a decline of 9.8 percent during the period under consideration. The decline in petroleum
crude was mainly caused by circular debt problem faced by refineries thereby causing an increased
importofpetroleumproducts.
Beside that, higher quantum import effect in the overall increase of import bill is also evident from
fallingunitvaluesofitemsinpetroleumgroupaspetroleumproductsandpetroleumcrudecategories
witnessed a decline of 7.3 percent and 8.4 percent in respective unit values during JulyApril 200910
against the same period last year. However, monthly trend suggests that falling oil prices started to
reverse and unit values of categories of petroleum group turned out to be positive beginning in
December2009.Furthermore,inthemonthofApril2010,theimportpricesofpetroleumproductsand
petroleumcrudewitnessedanincreaseof62.3percentand79.7percentrespectively.
Fig4:TrendinOilPrices(MonthlyAverage)
135
115
$/Brl
95
75
55
Source:WorldBank
Apr
Jan10
Oct
Jul
Apr
Jan09
Oct
Jul
Apr
Jan08
Oct
Jul
Apr
Jan07
35
Thetrendininternationalpricesofoilsuggeststhatoilpricesincreasedfrom$54perbarrelinJanuary
2007 to $ 134 per barrel by June 2008. After reaching at peak level in June 2008, oil prices declined
rapidlyandstoodatitsbottomlevelof$39perbarrelinFebruary2009,andsincethan,theoilprices
96
BalanceofPayments
have started to increase (see Fig 4) . The volatile nature of international oil prices indicates the
vulnerabilityofoilimportingcountriesandasbeinganoilimportingcountry,Pakistanisnoexception.
Maximum increase among all major import groups has been witnessed in consumer durable group,
whichgrewby6.4percentduringJulyApril200910oversameperiodlastyear.Thisriseismainlyledby
increaseindomesticdemandofroadvehicleimportwhichexhibitsagrowthrateof25.6percentduring
the period. Within road motor vehicles, the import of CKD kits increased by 63.7 percent during the
periodunderreviewasimportofcarsandmotorcyclescategoriesincreasedby76.6percentand85.5
percentrespectively.Asaresult,saleandproductionofcarsandmotorcyclesalsoincreasedthereby
importofRubberTyres&Tubesgroupwitnessanincreaseof21.7percentduringJulyApril200910.
DuringJulyApril200910importgroupofrawmaterialwitnessedagrowthrateof1.5percent.Within
raw material group, import of fertilizer manufactured remained the prominent factor leading to the
increase in import bill of raw material group. As import of fertilizer manufactured on absolute terms
increased by $ 196.8 million during this period on the back of aggressive offtake of fertilizers by
farmers. This may be viewed as larger import quantum to improve domestic supply condition of
fertilizer.
Import of gold increased from $ 31.7 million in JulyApril 200809 to $ 129.4 million during JulyApril
200910. This increase was mainly driven by higher quantity import of gold. Which grew by 267.6
percentduringperiodunderreview.
Amongallmajorimportgroups,thehighestdeclinewasobservedintelecomsector,whichdeclinedby
30.1percentduringperiodunderreview.Thisdeclineintelecomsectorshowsthesaturationintelecom
market.
Table7.6:StructureofImports
Particulars
A.FoodGroup
Milk&milkfood
WheatUnmilled
Dryfruits
Tea
Spices
EdibleOil(Soybean&PalmOil)
Sugar
Pulses
AllOtherFoodItems
B.MachineryGroup
PowerGen.Machines
OfficeMachines
TextileMachinery
Const.&MiningMach.
AircraftShipsandBoats
Agri.Machinery
OtherMachinery
C.PetroleumGroup
PetroleumProducts
($Million)
JulyApril
200809
200910
3,539.9
2,785.0
63.0
67.8
1,053.8
35.4
69.8
67.7
198.0
227.8
58.4
60.9
1,205.4
1,055.2
27.7
191.2
187.5
209.3
676.4
869.7
4,355.4
3,895.4
1,407.6
1,252.9
215.0
185.9
183.4
221.0
246.1
139.4
379.7
579.2
78.1
180.0
1,845.5
1,336.9
8,017.0
8,118.6
4,612.4
5,305.3
%Change
21.3
7.6
96.6
3.0
15.1
4.4
12.5
591.6
11.6
28.6
10.6
11.0
13.5
20.5
43.4
52.5
130.6
27.6
1.3
15.0
Absolute
Increase
754.9
4.8
1,018.3
2.1
29.8
2.6
150.3
163.6
21.8
193.3
460.0
154.7
29.1
37.6
106.8
199.5
101.9
508.6
101.5
692.9
%Share
9.9
0.2
0.1
0.2
0.8
0.2
3.8
0.7
0.7
3.1
13.9
4.5
0.7
0.8
0.5
2.1
0.6
4.8
28.9
18.9
97
Table7.6:StructureofImports
Particulars
PetroleumCrude
D.ConsumerDurables
Elect.Mach.&App.
RoadMotorVeh.
E.RawMaterials
RawCotton
Syntheticfiber
Silkyarn(Synth&Arti)
FertilizerManufactured
Insecticides
Plasticmaterial
Iron&steelandScrap
Iron&steel
OtherChemicalProducts
F.Telecom
G.Others
Total
ExcludingPetroleumGroup
ExcludingPetroleum&FoodGroups
*Provisional
($Million)
JulyApril
200809
200910
3,404.6
2,813.3
1,411.4
1,502.2
655.9
553.3
755.5
948.9
6,454.9
6,549.6
477.5
492.4
238.9
290.4
241.2
286.4
494.4
691.1
81.0
120.4
943.4
978.2
527.1
369.0
1,090.8
1,018.1
2,360.7
2,303.5
857.1
598.7
4,285.6
4,673.0
28,921.3
28,122.6
20,904.3
20,004.0
17,364.4
17,219.0
%Change
17.4
6.4
15.6
25.6
1.5
3.1
21.5
18.7
39.8
48.7
3.7
30.0
6.7
2.4
30.1
9.0
2.8
4.3
0.8
Absolute
Increase
591.4
90.9
102.5
193.4
94.6
14.9
51.5
45.2
196.8
39.5
34.8
158.2
72.6
57.1
258.4
387.4
798.8
900.3
145.5
%Share
10.0
5.3
2.0
3.4
23.3
1.8
1.0
1.0
2.5
0.4
3.5
1.3
3.6
8.2
2.1
16.6
100.0
71.1
61.2
Source:FBS
The effect of lower international prices compared to previous years imports in the decline of overall
importbillofthecountryisexhibitedintablebelow.AsitcanbeanalyzedthatPakistangained$1,185.9
million due to fall in import price of palm oil, petroleum products, petroleum crude, fertilizer, plastic
materialandiron&steelduringJulyApril200910comparedtoimportatlastyearsprices(seeTable
7.7). Import bill during the period under review could have been inflated by $ 1,185.9 million if the
pricesofitemsshownintable8.8beremainedatparwithlastyearsprices.
Table7.7:ImportBillasaResultoftheChangeinImportPrices(July April200910*)
($Million)
Actual
ImportsatLast
Commodity
AdditionalBill(Gains/Losses)
Imports
YearsPrices
SoyabeanOil
13.7
12.7
1.0
PalmOil
1,041.4
1,104.6
63.1
PetroleumProducts
5,305.3
5,725.3
420.0
PetroleumCrude
2,813.3
3,069.7
256.5
Fertilizer
691.1
909.7
218.6
PlasticMaterial
978.2
1,193.3
215.1
MedicinalProducts
611.5
608.7
2.8
Iron&Steel
1,018.1
1,034.5
16.3
Total
12,472.6
13,658.5
1,185.9
*Estimated
Source:FBS
Concentration of imports in terms of its composition suggests that raw material for consumer goods
dominates the composition of imports of the country (see table 7.8) and its share has gradually been
increasing since 200506. The share of capital and consumer goods remained constant during July
March200910overthesameperiodlastyear.
98
BalanceofPayments
Table7.8:CompositionofImports
Year
CapitalGoods
200506
200607
200708
200809
JulyMarch
200809
200910
*Provisional
37
36
29
29
28
28
(%Share)
RawMaterialfor
CapitalGoods
ConsumerGoods
7
45
7
47
8
53
9
49
9
7
Consumer
Goods
11
10
10
13
50
52
13
13
Total
100
100
100
100
100
100
Source:FBS
7.3aDirectionofImports
Most of Pakistans imports are concentrated in few numbers of market in the world namely Saudi
Arabia, Kuwait, Malaysia, U.S.A, Japan, Germany, and U.K. Data for JulyMarch 200910 exhibits that
almost36.0percentoftotalimportmarketsofPakistanconsistsofthesesevencountries(seeTable7.9).
SaudiArabiahasheldthelionshareinPakistansimportswithinmarketssince200304.However,signs
of market diversification are present as the combined share of these major export partners has been
decliningfromashighas43percentin200304tocurrentlevels.
Table7.9:MajorSourcesofImports
Country
0304
0405
0506
0607
0708
0809
U.S.A.
Japan
Kuwait
SaudiArabia
Germany
U.K.
Malaysia
SubTotal
OtherCountries
Total
*Provisional
8.5
6.0
6.4
11.4
3.9
2.8
3.9
42.9
57.1
100.0
7.6
7.0
4.6
12.0
4.4
2.6
2.6
40.8
59.2
100.0
5.8
5.6
6.2
11.2
4.7
2.8
3.0
39.3
60.7
100.0
7.5
5.7
5.7
11.4
3.9
2.3
3.1
39.6
60.4
100.0
6.1
4.6
7.5
13.4
3.2
1.9
3.9
40.6
59.4
100.0
5.4
3.6
6.6
12.3
3.8
2.6
4.6
38.9
61.1
100.0
(PercentageShare)
JulyMarch
0809
0910*
5.0
4.9
3.6
4.3
7.2
6.0
12.3
10.2
3.8
3.7
2.7
1.7
4.5
5.1
39.1
35.9
60.9
64.1
100.0
100.0
Source:FBS
7.4TermsofTrade
Afterwitnessingthepersistentdeteriorationsince199899,Pakistanhaswitnessedanimprovementof
2.8 percent in its terms of trade during 200809. This showed the impact of decreased prices of
international prices of commodity and oil. This improvement in countrys terms of trade also
contributed inthedeclineofcurrentaccountdeficitduringthe periodunderreview.However,during
JulyMarch 200910, terms of trade could not sustain the process of improvement which started in
200809duetoincreaseinunitvalueindexofimportsandstagnationinunitvalueindicesduringJuly
March 200910 over the comparable period last year (see Table 7.10). As a result, countrys terms of
tradeaggregatedto54.9duringJulyMarch200910ascomparedto56.3ofJulyMarch200809thereby
witnessedadeteriorationof2.5percentduringtheperiodunderreview.Althoughthisdeclineinterms
oftradeduringcurrentfiscalyearof200910islowesteversince200203.
99
Table7.10:UnitValueIndicesandTermsofTrade(Baseyear199091=100)
UnitValueIndices
Year
Exports
Imports
200506
299.3
460.4
200607
310.0
495.3
200708
350.4
632.3
200809
450.4
790.8
JulyMarch
200809
454.9
808.1
200910*
454.9
828.4
*Provisional
TermsofTrade
65.0
62.6
55.4
57.0
56.3
54.9
Source:FBS
7.5SummaryofBalanceofPayments
PakistansCurrentAccountDeficit(CAD)narroweddownby65.9percentasaresultCADdeclinedto$
3.06billioninJulyApril200910asagainst$8.98billionlastyear(seeTable.7.11).ThisdeclineinCAD
during JulyApril 2010 was contributed by the improvement in trade, services, income & current
transfers during the period. Specifically, decline in imports and a strong increase in current transfers
playedafundamentalroleinbringingdownthecurrentaccountdeficit.Fallinpaymentsonaccountof
repatriation of dividends, interest on debt, freight on merchandise imports and lower outflows from
foreign exchange companies were other contributory factors behind the contraction in the current
accountbalanceduringtheperiodunderreview.
Decline in trade deficit is due mainly to a fall in imports complimented by overall improvement in
exports during JulyApril 200910. The trade deficit improved by 18.3 percent during this period.
Improvementininvisibleaccountsemanatedfromthesignificantdeclineinservicesandincomeaccount
deficitwithimpressivegrowthinworkersremittances.
Theimprovementinincomeaccountisbasedonadeclineininvestmentincomeoutflows&fallinnet
interestpayments.Incomeaccountdeficitdeclinedby29.9percentduringJulyApril200910overthe
sameperiodlastyear.Thedeficitinservicestradeshrankby39.9percentduringJulyApril200910over
thecorrespondingperiodlastonthebackof15.3percentgrowthinservicesexportsand12.2percent
declineinservicesimports.Theincreaseinservicesexportsismainlyledbycommunication,financial,
government and other business services. Among these four groups, communication services exports
exhibitedsignificantgrowthof80.2percentduringJulyApril200910overthecorrespondingperiodlast
year. This growth in communication services exports was mainly owed to step taken by Pakistan
TelecomAuthority(PTA)tocurbillegaltrafficinthecountry.
While transportation and travel remained major categories among the all groups of services export,
thesesectorsregisterednegativegrowthduringJulyApril200910.Astheshareoftransportationand
travel in overall services exports declined by 9.0 percentage points and 2.1 percentage points
respectivelyduringJulyApril200910overthecorrespondingperiodlastyear.Transportationservices
exports declined by 13.9 percent during JulyApril 200910. Lower passage & freight earnings and
reduced local operations of foreign transport companies remained the key factors behind the overall
declineinthetransportationservicesexports.
100
BalanceofPayments
Table7.11:SummaryBalanceofPayments
Items
CurrentAccountBalance
Tradebalance
Goods:Exports
Goods:Imports
ServicesBalance
Services:Credit
Services:Debit
IncomeAccountBalance
Income:Credit
Income:Debit
CurrentTransfersNet
Ofwhich:
Workersremittances
Capital&FinancialAccount
CapitalAccount,
FinancialAccount
DirectInvestmentAbroad
DirectInvestmentinPakistan
PortfolioInvestment(Net)
OtherInvestment
NetErrorsandOmissions
OverallBalance
ReservesandRelatedItems
ReserveAssets
UseofFundCreditandLoans
ExceptionalFinancing
*:Provisional
JulyJune
200708
200809
13,874
9,252
14,970
12,627
20,427
19,121
35,397
31,747
6,457
3,381
3,589
4,106
10,046
7,487
3,923
4,407
1,613
874
5,536
5,281
11,476
11,163
6,451
8,252
121
8,131
75
5,410
32
2,764
257
5,365
5,365
5,538
173
0
7,811
6,058
474
5,584
25
3,720
1,073
2,962
138
3,056
3,056
635
3,691
0
($Million)
JulyApril
200809
200910*
8,982
3,060
11,136
9,094
15,817
16,155
26,952
25,249
3,218
1,962
3,126
3,605
6,344
5,567
3,667
2,570
759
474
4,426
3,044
9,039
10,566
6,356
7,307
4,495
3,942
162
239
4,333
3,703
13
11
3,205
1,773
1,002
46
2,143
1,965
230
152
4,257
730
4,257
730
496
2,159
3,761
1,106
0
323
Source:SBP
As against the current account, decline in financial account surplus, which emerged in 200708,
continued in JulyApril 200910 as well. Specifically, financial account surplus recorded a yearonyear
fallof14.5percentduringJulyApril200910comparedtosameperiodlastyear.
The quarterly trend shows that after recording surplus in first quarter of 200910, surplus in financial
accountfelldrasticallyinthesubsequentquarters,andturnedtodeficitinthirdquarterof200910.The
deficitinthefinancialaccountisattributedtolowerloaninflowsandthematurityofsovereignfinancial
instrument (Sukuk worth $ 600 million). The fall in financial account surplus would have been even
higher,haditnotbeenfornonrecurringSDRSallocationbytheIMF.
Moreover,foreigninvestorsriskaversenessamidglobalcrisisandseverepowerdeficitinPakistanled
to significant fall in foreign direct investment. The major sectors that recorded decline included
communication,financialbusinessandoil&gasexploration.
On the positive side, foreign investment in stock market has revived significantly during the period
underreview.However,theseinflowsareshortterminnatureandnotoriouslyvolatile.
Quarterlyanalysisshowsthatthecurrentaccountdeficitimprovedby86.0percentinthefirstquarter
101
(JulySeptember)ofthecurrentfiscalyear200910overthesameperiodlastyear.Inspiteofthatthe
processofimprovementincurrentaccountdeficitsloweddowninremainingperiodoftheyear.Asthe
yearonyear CAD in second quarter (OctoberDecember 2009) improved by 57.0 percent during the
period. While the third quarter (JanuaryMarch) of the year 200910 exhibits a deterioration of 36.0
percent over the comparable period last year. Fall in invisible surplus and increase in imports
contributedthemajorroleintheoverallquarterlypositionduringtheperiodunderreview.Inaddition
tothattheyearonyeardeteriorationinlaterperiodwasalsoowedtoeliminationofbaseeffect,which
kept the yearonyear contraction substantially up to first quarter of 200910. However, an
improvement in the current account deficit for the month of April 2010 is estimated at almost 59
percentoverthesamemonthlastyear.
Monthly analysis shows the in the months of August 2009 and September 2009, the Current Account
Balance(CAB)witnessedasurplusof$10millionand$48millionrespectively.Nevertheless,monthly
CABexhibitsthedeficitintheremainingmonthsofcurrentfiscalyear200910whileadeficitof$185
millionhasbeenwitnessedinApril2010.
7.5aForeignDirectInvestment(FDI)
US$million
According to UNCTAD, the global inflows of foreign

Fig5:ForeignDirectInvestment
directinvestmentdeclinedbycloseto40.0percentin
6000
year 2009 due to global financial and economic
crises. The impact of this crisis transmitted in the
5000
global FDI through decline in the firms tendency to
4000
invest due to its falling profitability, higher
uncertainty & risk aversion behaviour and reduced
3000
availabilityoffinancetofirmsgloballytherebymany
2000
companies reduced their investment plans. Pakistan
also witnessed the declining FDI according to global
1000
FDIs trend during the period under review. As after
0
growing at an average rate of 61.0 percent per
annum for four years, Pakistans FDI declined
abruptly by 31.2 percent in 200809 compared to
Source:SBP
same period last year. This situation further
deterioratedinthecurrentfiscalyearowingtoacombinationofinternalfactorslikeenergycrisesand
law & order situation along with external factors of global economic slowdown. FDI in the country
declinedby44.7percentduringtheperiodofJulyApril200910comparedtosameperiodlastyear(see
Fig5).
OilandGasExplorationremainedthemajorattractivesectorforinvestmentasduetoitsshareof34.1
percentinoverallFDIinJulyApril200910.However,investmentinoilandgasexplorationswitnessed
negativegrowthrateduringJulyApril200910overthecomparableperiodlastyear.Thisperformance
mainlyresultedduetolawandordersituationforoilandgasexploration.
7.5bRemittances
AccordingtoWorldBankestimates,growthinworldremittancesduring2009declinedby6.7percenton
thebackofglobalfinancialcrisistherebymakingitdifficultforremittancesenders(seeFig6).However,
number of countries received a higher level of remittances during 2009 against the previous year of
2008. Specifically, remittances flow to Asian countries remained stronger during the period under
102
BalanceofPayments
review.WithinAsia,theconcentrationofhigherremittancesremainedintheSouthAsiaregionwhere
remittancesincreasedby4.9percentin2009.
30.0
20.0
10.0
0.0
Kazakhstan
Turkey
Mexico
UnitedKingdom
World
Malaysia
Thailand
Nepal
Philippines
SriLanka
20.0
Bangladesh
10.0
Pakistan
Morerecently,Workerremittancesto Pakistanhave
surgedby15.0percentduringJulyApril200910over
the corresponding period last year. With the
exceptionofFebruary2010,positivegrowthhasbeen
witnessed in all other months of current fiscal years
200910overthecorrespondingmonthsoflastyear.
The month of October 2009 witnessed a highest
growthof62.7percentduringtheperiod.
Fig6:RemittancesGrowthin2009
%Growth
Remittances to Pakistan witnessed strong growth of

23.9 percent during 2009 over previous year 2008
followed by Bangladesh (19.4 percent), Sri Lanka
(14.2 percent), Nepal (13.2 percent) and Philippines
(5.6percent).
30.0
40.0
Source:WorldBank
Countrywise data suggests that UAE remained the

majorcontributortoremittancesincreaseduringJulyApril200910contributing22.8percentoftotal
remittance,followedbySaudiArabia(20.9percentor$1,525.9million),USA(20.0percentor$1,461.8
million),OtherGCCcountries(14.1percentor$1,033.0million)andUK(10.1percentor$734.6million)
(seeTable7.12).
While UK & UAE witnessed highest growth rate of 57.0 percent and 21.7 percent respectively during
JulyApril200910overcorrespondingperiodlastyear.HigherremittancefromUKseemstotheresult
of aggressive bilateral tieups of commercial banks with foreign entities under Pakistan Remittances
Initiative(PRI)program.
Table7.12:Country/RegionWiseCashWorkersRemittances
JulyApril
JulyApril*
Country/Region
200809
200910
USA
1,435.7
1,461.8
UK
468.0
734.6
SaudiArabia
1,264.1
1,525.9
UAE
1,366.8
1,663.2
OtherGCCCountries
996.0
1,033.0
EUCountries
196.5
210.2
OthersCountries
498.1
481.7
Total
6,355.6
7,306.7
*Provisional
($Million)
%Change
%Share
1.8
57.0
20.7
21.7
3.7
7.0
3.3
15.0
20.0
10.1
20.9
22.8
14.1
2.9
6.6
100.0
Source:SBP
ThepossiblefactorsbehindhigherremittancesfromUAEare:a)diversionofapartofremittancesfrom
informal to formal channels as is evident from trend shift following the crackdown on illegal fund
transferandassetpricescrisesinDubaiduetowhichinvestmentwasdivertedtoPakistanintheformof
remittances by Pakistani migrants who lost their jobs in Dubai, and b) increased outreach of banks
havingarrangementswithoverseasentities.
While some migrants found jobs in Abu Dhabi, as a result, remittances from Abu Dhabi witnessed an
103
increaseof80.62percentduringJulyApril2009overthecomparableperiodlastyear.
Channelwisedatasuggeststhatmostoftheremittanceswereroutedthroughbankingchannelduring
JulyApril 200910. This improvement largely reflects the initiatives taken under Pakistan Remittances
Initiative (PRI) to encourage the migrants to route their remittances through banking channel. This is
becauseoffearoffundsbeingstuckupinaneventofactionagainsttheexchangecompany,increased
competitionaslikeexchangecompaniesbanksarealsohavingtieupwithforeignentities,lowercosts
as sending funds through banks is free of charges and efforts such as PRI to attract funds through
bankingchannel.
Box2:PakistanRemittancesInitiative
To facilitate and increase the flow remittances through formal channels the Ministry of Finance, Ministry of
OverseasPakistanisandStateBankofPakistantooktheinitiativeoflaunchingPakistanRemittanceInitiative(PRI)
throughwhichdifferentincentivehavebeenofferedinfiscalyear200910tosenderandreceiverofremittance
throughbankingchannel.Theseincentives/measuresarefollowedas:
Increasingtheoutreachofbankswithforeignentities.
TransferringofremittancesinbeneficiarybankaccountonsamedaythroughintroducingtheRealTimeGross
Settlement(RTGS).
Reimbursement of marketing expenses as percent of remittances mobilized by an overseas entity from any
onejurisdiction.Thispercentofreimbursementvariesaccordingtoamountmobilizedwhichfollowsas:0.50
percentonincrementalamountonremittancesmobilizedabove$100millionto$400million,0.75percenton
incrementalamountonremittancesmobilizedabove$400millionto$800million,1.0percentonincremental
amount on remittances mobilized above $800 million to $1200 million, 1.0 percent on total remittances
mobilizedabove$1200million.
After launching of PRI, the Memorandum of Understanding has been signed between Pakistan Remittance
InitiativeandPakistanInternationalAirlinesinwhichmoreincentivesandprivilegeshavebeenofferedtooverseas
Pakistanis like one hundred free return air tickets through lucky draws, reserve seats, special gifts in flights,
businessclassservicesatcheckincounters,businessclassloungesandexcessbaggageallowance.
7.5cForeignExchangeReserves
Afterdecliningby27.0percentduringthefiscalyear200708,Pakistanstotalliquidforignexchange
reserves(endperiod)witnessingthesignificantincreaseinthesubsequentperiodsof200809andJuly
April200910(seeFig7).Themajorreasonsbehindthefallinreservesduring200708remainedthenet
outflowsfromportfolioinvestmentandstepriseinthe currentaccountdeficitledtosharpdeclinein
theforeignexchangereservesofthecountry.Furthermoe,therecoveryinthereservesduring200809
was contributed by inflows from IMF following Pakistans entry into a macroeconomic stablization
programandthanafteraditionfromotheragenciescapitalinflowinthecountry.Inaddditiontothat
the narrowed down of current account deficit also significantly contributed in the improvement of
reservepositionofthecountryduringtheperiod.
Morerecently,Pakistansforeignreservesincreasedsubstantiallyfrom$12.4billioninendJune2009to
$ 15.0 billion in endApril 2010 (see Fig 7). This improved position of reserves benefited from lower
currentaccountdeficitandhigherremittances.Improvementinreservesbroughtrelativestabilityinthe
exchangerateandsubsequentincreaseinforeigncurrencydeposits.
Quarterlyanalysisshowsthatbulkofaccumulationinreserveswasconcentratedinfirstquarterof2009
104
BalanceofPayments
10,whilereservesincreasedonlymarginallyinthesubsequentquarters.Thisisbecauseasubstantive
partoftheriseinreservesduringfirstquarterof200910owedtoSDRsallocationanddisbursementby
IMFunderSBA.ThereservesheldbytheStateBankofPakistanstoodat$11.2billionwiththebanking
systemholding$3.9billioninreservesbyendApril2010.ImprovementintheSBPsreservesduringthe
periodmainlyowedtoinflowsfromIFIs,lowercurrentaccountdeficitandreducedmarketsupport.The
riseincommercialbanksreserveswasprimarilyonaccountofincreasedforeigncurrencydepositsand
retirementsofforeigncurrencyloans.Increaseinbothofthemwasowingtoexpectationofexchange
ratedepreciation.
Owing to improved position of reserves and decline in imports, the import coverage ratio increased
from21.1weeksasofendJune2009to26.5weeksinMarch2010.
Fig7:EndPeriodTotalLiquidForeignExchangeReserves
16,000
MillionUS$
15,000
14,000
13,000
12,000
11,000
10,000
200405
200506
200607
200708
200809
JulApr0910
Source:SBP
7.6ExchangeRate
Afterremainingatstablepositionformorethanfouryears,Pakrupeestartedtolosesignificantvalue
againstUSdollaranditdepreciatedby22percentintheperiodofJanNov2008.Thisdepreciationwas
attributedtofactorslikesubstantiallossofforeignexchangereserves,politicaluncertainty,speculative
activities in foreign exchange markets and trade related outflows. Due to Pakistans entry in standby
agreementwithInternationalMonetaryFund(IMF)inNovember2008alongwithmarketconditionsat
that time, Pakistan adopted a more flexible exchange rate regime. After shift towards more flexible
exchange rate regime, country witnessed a slow down in exchange rate depreciation of 2.5 percent
duringDecJun200809.
More recently, owing to the overall external account improvement and stable reserve position,
PakistanscurrencyvisvisUSdollardepreciatedby3.9percentduringJulyMarch200910compared
to sharp decline of 16.2 percent in the corresponding period last year.Volatility in the kerbmarket
however, remained substantial throughout the JulyMarch 200910 period, initially on account of Hajj
relateddemandandlaterduetoshiftingofoilpayments.DemandfortheUSdollarinthekerbmarket
wasparticularlyhighinJanuaryandFebruary2010,whichledtosubstantialriseinkerbpremiumand
volatilityintheexchangerate(seeTable7.13).
The improvement in inflows on account of portfolio investment and workers remittances backed Pak
rupee,consequently,PakrupeeregainedsomeofthegrounditlostinFebruary.Rupeeappreciatedby
1.01percentvisvisUSdollarbetweenendFebruaryandendMarch2010.
105
The rupee showed relatively better performance against the Euro and Pound. Euro and Pound
depreciatedby1.8percentand6.3percentrespectivelyagainstPakrupeeduringJulyMarch200910.
Rupees appreciation against Euro and Pound was primarily driven by the relative strength of dollar
againstEuroandPound,andPakrupeestabilityagainsttheUSdollarduringtheperiodunderreview.
Table7.13:AverageExchangeRatesandPremium
InterBankRate
OpenMarketRate
(Rs/$)
(Rs/$)
July09
82.22
82.40
August
82.9
82.98
September
82.94
82.86
October
83.31
83.41
November
83.55
83.72
December
84.11
84.31
January10
84.63
85.37
February
84.97
86.17
March
84.41
84.68
Premium(%)
0.18
0.08
0.08
0.10
0.17
0.20
0.74
1.20
0.27
Rs/Euro
115.71
118.16
120.49
123.35
124.54
122.88
120.78
116.24
114.61
Source:SBP
Furthermore,NominalEffectiveExchangeRate(NEER)witnessed4.6percentdepreciationduringJuly
March2010ascomparedtodepreciationof6.4percentduringthesameperiodlastyear.However,due
to rise in inflationary pressures as evident from the 8.7 percent increase in Relative Price Index, Real
EffectiveExchangeRate(REER)appreciatedby3.5percentduringJulyMarch200910(seeFig8).
Fig8:RealEffectiveExchangeRate(REER)
REERIndex(2000=100)
100
98
96
94
92
90
88
86
Source:SBP
7.8SalientFeaturesofStrategicTradePolicyFramework200912
Realizing the need for developing and effectively implementing a national export competitiveness
programme, the Ministry of Commerce has developed a three year Strategic Trade Policy Framework
(STPF) 200912. The overall objective of the STPF is to achieve sustainable high economic growth
through exports with the help of policy and support interventions by the government, industry, civil
societyanddonors.
The STPF 200912 is based on six pillars namely Supportive Macro Policies and Services, Enhancing
106
BalanceofPayments
Product Sophistication level in Pakistans Exports, Enhancing Firm level Competitiveness, Domestic
Commerce Reform and Development, Product and Market Diversification and Making Trade Work for
theSustainableDevelopmentinPakistan.Moreover,MinistryofCommercehassettheexportgrowth
targetof6.0percentfor200910and10.0percentand13.0percentforeachofthesuccessiveyears.
Themajormeasurestoachievetheaboveobjectivesare:
x Supportforopeningexportersofficesabroad.
x Inpreviousyears,governmentannounced50percentsupportforvariousquality,environmental
andsocialcertifications.Thesupportwasprogressivelyincreasedto100percentofthecostof
certification.
x It is proposed that surgical instruments, sports goods & cutlery sector would be granted 25
percentsubsidyonbrandpromotionalexpenseslikeadvertisementinrecognizedtradejournals,
certificationcostetc.
x Inordertoincreasethesophisticationlevel&realizetruepotentialoflightengineeringsector,a
special fund would be created for product development & marketing for light engineering
sector.
x Leather apparel exporters would be provided 50 percent subsidy for on the floor expert
advisory/consultancyand matchinggrantto establishdesignstudiosordesign centresin their
factories.
x Afreightsubsidyat25percentwouldbeextendedonairshipmentsofliveseafoodproducts.
x Processed food exports would be supported initially by reimbursing research &development
costat6percentoftheexports.
x Sharing 25 percent financial cost of setting up of design centres and labs in the individual
tanneries.
x Industrialimporterswouldbeallowedtoimportnew,refurbishedandupgradedmachineryon
thebasisoftradeinwiththeirold,obsoletemachinery.Likewise,exportoftheirold/obsolete
machineryfortradeinwithnew,refurbishedorupgradedmachinerywouldalsobeallowed.
x The natural pearls and other synthetic or reconstructed precious or semi precious stones are
beingincreasinglyusedinjewelleryproducts;theywouldalsobeexemptedfromcustomsduty
andsalestax.
x Limitforphysicianssampleswouldbeenhancedto20atthetimeoflaunchwithfirstshipment.
x EngineeringunitswouldbeallowedExportOrientedUnits(EOU)facilityonexportof50percent
oftheirproductionforthefirstthreeyears.Afterthat,engineeringunitswouldbeallowedthis
facilityonexportof80percentoftheirproduction.
x Inordertoencourageuseofcomputersbylowincomesegmentofpopulation,theimportofold
&usedcomputercomponentswouldbeallowed.
107
TABLE 7.1
BALANCE OF PAYMENTS
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
(US $ Million)
July-March
2008-09 2009-10 P
-294
-444
-1,208
-4,352
-8,259
-9,495
-14,820
-12,492
-10,144
-8,024
9,140
9,434
10,889
11,333
12,396
13,604
14,401
18,753
16,388
24,647
17,119
26,614
20,207
35,027
18,918
31,410
14,159
24,303
14,218
22,242
-2,617
-2,128
-3,594
-5,841
-7,304
-7,968
-10,530
-7,922
-6,420
-4,175
Receipts
Payments
Shipment
Investment Income
Others
2,027
-4,644
-809
-2,430
-1,405
2,967
-5,095
-951
-2,381
-1,763
2,894
-6,488
-1,253
-2,394
-2,841
3,837
-9,678
-1,713
-2,823
-5,142
4,718
-12,022
-2,203
-3,451
-6,368
5,239
-13,207
-2,337
-4,522
-6,348
5,422
-15,952
-3,087
-5,536
-7,329
5,183
-13,105
-2,740
-5,281
-5,084
3,706
-10,126
-2,153
-4,045
-3,928
3,619
-7,794
-1,994
-2,700
-3,100
3. Private Unrequired
Transfers (net)
(Workers Remittances)
4. Current Account Balance
4,249
2,389
1,338
5,737
4,237
3,165
6,116
3,871
1,314
8,440
4,168
-1,753
9,914
4,600
-5,649
10,102
5,494
-7,361
11,048
6,451
-14,302
11,019
7,811
-9,395
8,075
5,658
-8,489
9,305
6,551
-2,894
5. Long-term Capital (net)
1,280
1,035
-201
2,562
6,016
10,006
8,427
6,448
4,758
5,031
-177
1,457
225
810
691
-892
1,221
1,341
4,153
1,863
7,826
2,180
6,187
2,240
3,805
2,643
3,178
1,580
1,954
3,077
2,618
4,200
1,113
809
367
2,645
-5,875
-2,947
-3,731
2,137
961
909
-137
-854
36
527
-676
310
234
-569
3,579
5,109
976
-45
403
3,172
-6,551
-2,637
-3,497
1,568
-925
-520
-95
472
470
1,051
679
-611
-536
-840
-334
-180
-317
147
-193
-83
559
-151
-68
-145
-591
138
-340
620
222
-55
335
-55
663
-55
1,134
100
120
0
-460
0
-468
0
-695
-100
-826
-372
(P) : Provisional
-818
-4,323
5,872
Items
1. Trade Balance
Exports (f.o.b)
Imports (f.o.b)
2. Services (Net)
Private Capital (net)

Official Capital (net) @
6. Basic Balance
7. Errors and Omissions (net) *
8. Balance Requiring Official
Financing
9. Official Assistance &
Debt Relief
Medium and ShortTerm Capital
Other Short-Term Assets/
Liabilities FEBC, DBC
FEBC, Euro & Special
US $ Bonds (Net), GDR(OG)
10 Exceptional Financing
11. Change in Reserves

( - ve = increase )
-2,792
@ : Includes Official Unrequited Transfers
* : Includes Private Short-term Capital
-5,209
3,249
4,033
-628
Source : State Bank of Pakistan
Table 7.2
SUMMARY OF BALANCE OF PAYMENTS
Item
Current account balance
Current account balance without off. Transfers
2006-07
2007-08
2008-09
-6,878
-13,874
-9,252
(Millions US $)
July-March
2008-09
2009-10
-8,379
-2,702
-7,403
-14,302
-9,424
-7,924
-2,111
Goods: Export f.o.b
17,278
20,427
19,121
14,321
14,389
Goods: Imports f.o.b
-26,989
-35,397
-31,747
-24,582
-22,413
Trade Balance
-9,711
-14,970
-12,626
-10,261
-8,024
Services (Net)
-4,170
-6,457
-3,381
-2,951
-1,907
Services: Credit
4,140
3,589
4,106
2,851
3,016
Services: Debit
-8,310
-10,046
-7,487
-5,802
-4,923
Income (Net)
-3,582
-3,923
-4,407
-3,352
-2,268
Income: Credit
Income: Debit
of Which: Interest Payments
940
1,613
874
693
432
-4,522
-5,536
-5,281
-4,045
-2,700
1,417
2,175
1,915
1,480
1,073
Current Transfer (Net)
10,585
11,476
11,163
8,186
9,497
Capital Account and Financial Account
10,276
8,252
6,060
4,421
3,724
304
121
474
138
187
Financial Account
9,972
8,131
5,586
4,283
3,537
Dir. Invest. In Rep. Econ.
5,140
5,410
3,720
3,042
1,554
Capital Account
Other Investment Assets

Other Investment Liab.
Monetary Authorities
-758
32
560
592
-257
2,421
2,732
2,404
1,613
2,415
-1
490
-1
-1
1,250
General Government
Disbursement
2,444
2,354
2,936
1,920
2,263
Amortization
-1,031
-1,131
-1,389
-1,067
-993
Net errors and omissions

Reserve and Related Items
179
257
136
-33
-107
-3,577
5,365
3,056
3,990
-915
TABLE 7.3
COMPONENTS OF BALANCE OF PAYMENTS (AS PERCENT OF GDP)
Exports ^
Imports ^
Trade
Deficit ^
Worker's
Remittances #
Current
Account
Deficit #
1980-81
1981-82
1982-83
1983-84
1984-85
10.5
8.0
9.4
8.9
8.0
19.3
18.3
18.7
18.3
19.0
8.7
10.3
9.3
9.4
11.0
7.5
7.2
10.1
8.8
7.9
3.7
5.0
1.8
3.2
5.4
1985-86
1986-87
1987-88
1988-89
1989-90
9.6
11.1
11.6
11.7
12.4
17.7
16.1
16.7
17.6
17.4
8.0
5.1
5.0
5.9
4.9
8.1
6.8
5.2
4.7
4.9
3.9
2.2
4.4
4.8
4.7
1990-91
1991-92
1992-93
1993-94
1994-95
13.5
14.2
13.3
13.1
13.5
16.7
19.1
19.4
16.6
17.2
3.3
4.8
6.1
3.4
3.7
4.1
3.0
3.0
2.8
3.1
4.8
2.8
7.2
3.8
4.1
1995-96
1996-97
1997-98
1998-99
1999-00
13.8
13.4
13.9
13.3
11.7
18.7
19.1
16.3
16.1
14.1
4.9
5.7
2.4
2.8
2.4
2.3
2.3
2.4
1.8
1.3
7.2
6.2
3.1
4.1
1.6
15.1
14.4
14.8
15.9
18.5
22.5
21.2
24.4
21.5
2.1
1.7
1.3
3.3
5.5
9.5
9.4
12.8
10.6
1.5
3.3
5.1
3.9
3.7
2.9
3.8
3.9
4.8
0.7
+1.9
+3.8
+1.3
1.6
4.5
5.1
8.5
5.7
16.0
7.0
Year
2000-01
12.9
2001-02
12.8
2002-03
13.5
2003-04
12.5
2004-05
13.0
2005-06
13.0
2006-07
11.8
2007-08
11.6
2008-09
10.9
Jul-April
2009-10 *
9.1
^ : Based on the data compiled by FBS
# : Based on the data compiled by SBP
* : Provisional
4.2
1.7
Source: FBS, SBP & E.A.Wing, Finance Division
TABLE 7.4
EXPORTS, IMPORTS AND TRADE BALANCE
Year
(Rs million)
Current Prices
Exports Imports Balance
Growth Rate (%)

(US $ million)
Current Prices
Growth Rate (%)

1980-81
1981-82
1982-83
1983-84
1984-85
29,280
26,270
34,442
37,339
37,979
53,544
59,482
68,151
76,707
89,778
-24,264
-33,212
-33,709
-39,368
-51,799
25.07
-10.28
31.11
8.41
1.71
14.10
11.09
14.57
12.55
17.04
3.17
36.88
1.50
16.79
31.58
2,958
2,464
2,694
2,768
2,491
5,409
5,622
5,357
5,685
5,906
-2451
-3158
-2663
-2917
-3415
25.07
-16.70
9.33
2.75
-10.01
14.11
3.94
-4.71
6.12
3.89
3.20
28.85
-15.67
9.54
17.07
1985-86
1986-87
1987-88
1988-89
1989-90
49,592
63,355
78,445
90,183
106,469
90,946
92,431
112,551
135,841
148,853
-41,354
-29,076
-34,106
-45,658
-42,384
30.58
27.75
23.82
14.96
18.06
1.30
1.63
21.77
20.69
9.58
-20.16
-29.69
17.30
33.87
-7.17
3,070
3,686
4,455
4,661
4,954
5,634
5,380
6,391
7,034
6,935
-2564
-1694
-1936
-2373
-1981
23.24
20.07
20.86
4.62
6.29
-4.61
-4.51
18.79
10.06
-1.41
-24.92
-33.93
14.29
22.57
-16.52
1990-91
1991-92
1992-93
1993-94
1994-95
138,282
171,728
177,028
205,499
251,173
171,114
229,889
258,643
258,250
320,892
-32,832
-58,161
-81,615
-52,751
-69,719
29.88
24.19
3.09
16.08
22.23
14.96
34.35
12.51
-0.15
24.26
-22.54
77.15
40.33
-35.37
32.17
6,131
6,904
6,813
6,803
8,137
7,619
9,252
9,941
8,564
10,394
-1488
-2348
-3128
-1761
-2257
23.76
12.61
-1.32
-0.15
19.61
9.86
21.43
7.45
-13.85
21.37
-24.89
57.80
33.22
-43.70
28.17
1995-96
1996-97
1997-98
1998-99
1999-00
294,741
325,313
373,160
390,342
443,678
397,575
465,001
436,338
465,964
533,792
-102,834
-139,688
-63,178
-75,622
-90,114
17.35
10.37
14.71
4.60
13.66
23.90
16.96
-6.16
6.79
14.56
47.50
35.84
-54.77
19.70
19.16
8,707
8,320
8,628
7,779
8,569
11,805
11,894
10,118
9,432
10,309
-3098
-3574
-1490
-1653
-1740
7.01
-4.44
3.70
-9.84
10.15
13.58
0.75
-14.93
-6.78
9.30
37.26
15.36
-58.31
10.94
5.26
627,000
-87,930
634,630
-73,683
714,372
-62,078
897,825
-188,789
1,223,079
-368,991
1,711,158
-726,317
1,851,806
-822,494
2,512,072 -1,315,434
2,723,570 -1,339,852
21.50
4.06
16.28
8.70
20.46
15.31
4.52
16.26
15.63
17.46
-2.42
1.22 -16.20
12.57 -15.75
25.68 204.12
36.23 95.45
39.91 96.84
8.22 13.24
35.66 59.93
8.42
1.86
9,202
9,135
11,160
12,313
14,391
16,451
16,976
19,052
17,688
10,729
10,340
12,220
15,592
20,598
28,581
30,540
39,966
34,822
-1527
-1205
-1060
-3279
-6207
-12130
-13564
-20914
-17134
7.39
-0.73
22.17
10.33
16.88
14.31
3.19
12.23
-7.16
4.07
-3.63
18.18
27.59
32.11
38.76
6.85
30.86
-12.87
-12.24
-21.09
-12.03
209.34
89.30
95.42
11.82
54.19
-18.07
2,021,991
2,081,763
25.69
13.50
17.67
2.96
13,382
14,162
26,123
25,107
2000-01
539,070
2001-02
560,947
2002-03
652,294
2003-04
709,036
2004-05
854,088
2005-06
984,841
2006-07
1,029,312
2007-08
1,196,638
2008-09
1,383,718
July-Mar
2008-09
1,036,466
2009-10 (P) 1,176,388
P : Provisional
-985,525
-905,375
10.26
-8.13
-12741
-0.37
-6.57
-12.29
-10945
5.83
-3.89
-14.10
Source: FBS & E. A. Wing, Finance Division
TABLE 7.5
UNIT VALUE INDICES AND TERMS OF TRADE (T.O.T) (1990-91 = 100)
Groups
(Indices)
July-March
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
2008-09 2009-10
All Groups
Exports
253.77 271.47
Imports
259.03 298.44
T.O.T.
97.97
90.96
Food & Live Animals
Exports
234.95 249.32
Imports
248.38 278.82
T.O.T.
94.59
89.42
Beverages & Tobacco
Exports
143.34 171.44
Imports
532.21 698.92
T.O.T.
26.93
24.53
Crude Materials
(inedible except fuels)
Exports
169.85 192.12
Imports
198.06 218.95
T.O.T.
85.76
87.75
Minerals, Fuels & Lubricants
Exports
283.63 373.65
Imports
206.30 276.87
T.O.T.
137.48 134.96
Chemicals
Exports
276.51 282.36
Imports
208.54 228.06
T.O.T.
132.59 123.81
Animal & Vegetable
Oils, Fats & Waxes
Exports
Imports
229.68 195.10
T.O.T.
Manufactured Goods
Exports
266.96 279.04
Imports
224.61 251.50
T.O.T.
118.86 110.95
Machinery and Transport
Equipment
Exports
396.34 453.20
Imports
417.87 470.20
T.O.T.
94.85
96.38
Miscellaneous Manufactured Articles
Exports
263.04 292.47
Imports
278.99 323.02
T.O.T.
94.28
90.54
- : Not applicable
* : Provisional
271.18
298.56
90.83
254.02
309.52
82.07
279.65
355.43
78.68
288.84
392.45
73.60
299.31
460.38
65.01
310.03
495.33
62.59
350.40
632.30
55.42
450.40
790.82
56.95
454.93
808.09
56.30
454.89
828.42
54.91
260.55
277.41
93.92
258.11
259.76
99.36
267.55
282.18
94.82
303.93
314.36
96.68
327.47
323.95
101.09
350.75
431.20
81.34
496.58
551.25
90.08
758.42
622.23
121.89
614.28
619.79
131.38
679.29
687.05
98.87
169.82
790.14
21.49
146.52
598.00
24.50
175.33
521.88
33.60
162.96
561.23
29.04
191.13
621.67
30.74
208.44
675.14
30.87
202.67
653.41
31.02
431.15
884.26
48.76
372.70
860.45
43.31
599.47
953.43
62.87
158.90
228.14
69.65
171.58
232.37
73.84
218.86
245.01
89.33
195.64
293.06
66.76
209.97
329.71
63.88
225.52
350.19
64.40
328.53
445.35
73.77
494.08
813.16
80.58
493.21
643.89
76.60
554.09
663.78
83.47
314.40
249.66
125.93
365.14
297.20
122.86
416.09
306.38
135.81
525.75
389.16
135.10
644.33
615.00
104.77
733.54
632.08
116.05
979.83
877.47
111.67
840.26
982.09
85.56
281.54
239.29
117.66
270.05
245.60
109.96
265.61
313.15
84.82
277.23
334.10
82.98
312.89
372.17
84.07
362.50
392.87
92.27
397.29
471.77
84.21
480.24
659.24
72.85
484.32
611.09
79.26
224.82
-
300.36
-
347.94
-
358.48
-
341.40
-
406.00
-
647.28
-
793.22
-
866.17
281.83
244.97
115.05
248.93
240.82
103.37
274.02
287.80
95.21
284.72
301.00
94.59
289.58
340.71
84.99
300.76
375.06
80.19
318.97
427.60
74.60
387.90
559.24
69.36
390.80
549.29
71.15
385.68
609.37
63.29
579.13
481.18
120.36
572.31
450.67
126.99
396.09
537.55
73.68
342.97
561.15
61.12
414.01
538.14
76.93
430.91
580.85
74.19
518.62
639.86
81.05
806.33
897.85
89.81
799.29
858.50
93.10
982.15
960.34
102.27
298.40
320.35
93.15
294.67
299.60
98.35
318.55
333.22
95.60
324.17
343.13
94.47
342.71
404.94
82.59
340.99
418.65
81.45
430.84 486.51
351.77 442.64
666.29 962.00
605.24 763.29
64.66 50.57
58.12
57.99
871.98 1038.32
1090.38 942.65
79.97 110.15
523.12
717.12
72.95
873.15
-
TABLE 7.6
ECONOMIC CLASSIFICATION OF EXPORTS AND IMPORTS (A. EXPORTS)
(Rs million)
Year
Primary Commodities
Value
Percentage
Share
Semi-Manufactures
Value
Percentage
Share
Manufactured Goods
Value
Percentage
Share
Total
Value**
1970-71
1971-72
1972-73
1973-74
1974-75
650
1,510
3,366
4,007
4,933
33
45
39
39
48
472
914
2,583
2,294
1,308
24
27
30
23
13
876
947
2,602
3,860
4,047
44
28
30
38
39
1,998
3,371
8,551
10,161
10,286
1975-76
1976-77
1977-78
1978-79
1979-80
4,902
4,622
4,633
5,475
9,838
44
41
36
32
42
2,068
1,888
1,912
3,489
3,519
18
17
15
21
15
4,283
4,783
6,435
7,963
10,053
38
42
50
47
43
11,253
11,294
12,980
16,925
23,410
1980-81
1981-82
1982-83
1983-84
1984-85
12,824
9,112
10,326
10,789
10,981
44
35
30
29
29
3,320
3,507
4,618
5,172
6,664
11
13
13
14
17
13,136
13,651
19,498
21,378
20,334
45
52
57
57
54
29,280
26,270
34,442
37,339
37,979
1985-86
1986-87
1987-88
1988-89
1989-90
17,139
16,796
22,163
29,567
21,641
35
26
28
33
20
7,892
13,214
15,268
16,937
25,167
16
21
20
19
24
24,561
33,345
41,012
43,679
59,661
49
53
52
48
56
49,592
63,355
78,445
90,183
106,469
1990-91
1991-92
1992-93
1993-94
1994-95
25,820
32,645
26,133
21,321
28,113
19
19
15
10
11
33,799
36,731
36,507
48,748
62,624
24
21
21
24
25
78,663
102,352
114,388
135,430
160,436
57
60
64
66
64
138,282
171,728
177,028
205,499
251,173
1995-96
1996-97
1997-98
1998-99
1999-00
47,852
36,452
47,357
45,143
53,833
16
11
13
12
12
63,802
66,889
64,683
70,288
68,208
22
21
17
18
15
183,087
221,972
261,120
274,911
321,637
62
68
70
70
73
294,741
325,313
373,160
390,342
443,678
81,288
80,438
71,323
83,361
86,483
106,029
121,930
127,090
130,612
15
14
11
12
10
11
12
11
9
389,999
420,163
509,777
554,959
675,586
766,543
793,428
897,877
1,026,781
72
75
78
78
79
78
77
75
74
539,070
560,947
652,294
709,036
854,088
984,841
1,029,312
1,196,638
1,383,718
97,281
124,340
9
11
766,710
837,347
74
71
1,036,466
1,176,388
(Contd.)
2000-01
67,783
13
2001-02
60,346
11
2002-03
71,194
11
2003-04
70,716
10
2004-05
92,018
11
2005-06
112,268
11
2006-07
113,954
11
2007-08
171,670
14
2008-09
226,324
16
Jul-March
2008-09
172,476
17
2009-10 (P)
214,702
18
P : Provisional
** : Total may not tally due to rounding of figures
TABLE 7.6
ECONOMIC CLASSIFICATION OF EXPORTS AND IMPORTS (B. IMPORTS)
(Rs million)
Capital Goods
Value
Percentage
Share
Industrial Raw Material

Capital Goods
Consumer Goods
Value
Percentage
Value
Percentage
Share
Share
Consumer Goods
Value
Percentage
Share
**
Total
Value
1970-71
1971-72
1972-73
1973-74
1974-75
1,885
1,482
2,499
3,975
6,152
52
42
30
30
29
382
367
830
904
1,802
11
11
10
7
9
950
851
2,584
5,386
8,257
26
24
31
40
40
385
795
2,485
3,214
4,714
11
23
30
24
23
3,602
3,495
8,398
13,479
20,925
1975-76
1976-77
1977-78
1978-79
1979-80
7,158
8,750
9,316
10,970
16,679
35
38
34
30
36
1,261
1,463
1,921
2,160
2,916
6
6
7
6
6
7,709
9,148
11,023
15,416
19,834
28
40
40
42
42
4,337
3,651
5,555
7,842
7,500
21
16
20
22
16
20,465
23,012
27,815
36,388
46,929
1980-81
1981-82
1982-83
1983-84
1984-85
14,882
17,504
21,135
24,419
28,968
28
30
31
32
32
4,055
4,861
4,040
4,525
4,859
8
8
6
6
6
26,832
28,710
33,383
37,017
41,579
50
48
49
48
46
7,775
8,407
9,593
10,746
14,372
15
14
14
14
16
53,544
59,482
68,151
76,707
89,778
1985-86
1986-87
1987-88
1988-89
1989-90
33,195
33,841
40,350
49,498
48,420
37
37
36
37
33
4,966
6,150
8,021
9,929
10,439
5
7
7
7
7
36,353
36,227
48,153
53,055
61,562
40
39
43
39
41
16,432
16,213
16,027
23,359
28,432
18
17
14
17
19
90,946
92,431
112,551
135,841
148,853
1990-91
1991-92
1992-93
1993-94
1994-95
56,303
96,453
108,993
97,301
112,305
33
42
42
38
35
11,621
15,167
14,304
15,692
16,754
7
7
6
6
5
76,290
88,791
99,290
110,291
148,419
44
38
38
43
46
26,900
29,478
36,056
34,966
43,414
16
13
14
13
14
171,114
229,889
258,643
258,250
320,892
1995-96
1996-97
1997-98
1998-99
1999-00
140,405
169,774
139,618
146,450
140,045
35
37
32
31
26
22,541
22,259
23,344
25,646
30,712
6
5
5
6
6
180,539
202,379
195,528
220,563
287,801
45
43
45
47
54
54,090
70,589
77,848
73,305
75,234
14
15
18
16
14
397,575
465,001
436,338
465,964
533,792
2000-01
157,091
25
34,371
2001-02
176,702
28
39,038
2002-03
220,942
31
41,216
2003-04
316,082
35
57,310
2004-05
441,528
36
101,719
2005-06
631,644
37
124,480
2006-07
670,539
36
134,519
2007-08
731,017
29
202,538
2008-09
790,327
29
246,600
Jul-March
2008-09
572,324
28
180,212
2009-10 (P)
593,958
28
143,982
P : Provisional
** : Total may not be tally due to rounding of figures
6
6
6
7
8
7
7
8
9
345,770
346,865
380,035
441,586
557,226
769,336
864,736
1,322,329
1,337,986
55
55
53
49
46
45
47
53
49
89,768
72,025
72,179
82,847
122,607
185,698
182,011
256,187
348,657
14
11
10
9
10
11
10
10
13
627,000
634,630
714,372
897,825
1,223,079
1,711,158
1,851,806
2,512,072
2,723,570
9
7
1,001,624
1,076,543
50
52
267,832
13
2,021,991
267,280
13
2,081,762
Year
TABLE 7.7
MAJOR IMPORTS
Items
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
1. Chemicals
2. Drugs and
medicines
3. Dyes and
colours
4. Chemical
Fertilizers
5. Electrical goods
6. Machinery
(non-electrical)
7. Transport
equipments
8. Paper, board and
stationery
9. Tea
10. Sugar-refined
11. Art-silk yarn
12. Iron, steel & manufactures thereof
13. Non-ferrous metals
14. Petroleum &
products
15. Edible oils
16. Grains, pulses
& flours
17. Other imports
Grand Total
* : Provisional
82,263
90,953
119,683
160,711
176,200
200,333
256,618
300,450
(Rs. Million)
July-March
2008-09
2009-10 *
220,165
233,352
13,988
12,964
15,812
17,343
20,091
26,080
33,867
44,929
31,092
45,517
7,775
8,419
9,218
11,101
13,272
14,889
18,486
22,050
15,749
18,130
10,904
7,835
14,068
12,661
16,405
14,862
24,794
21,121
40,787
30,463
27,306
39,824
55,165
48,148
42,381
60,718
33,540
46,801
57,326
41,895
96,832
119,256
140,907
254,452
334,445
368,226
416,538
461,816
338,532
295,015
30,587
39,984
87,374
75,981
133,480
140,919
137,701
103,476
73,533
112,408
8,608
9,611
1,485
5,054
10,451
10,095
153
5,375
12,138
11,078
189
6,793
14,850
13,202
5,229
7,730
19,135
13,336
37,366
14,204
24,061
12,965
15,722
15,164
28,817
12,653
912
18,474
33,221
17,417
4,505
23,046
18,201
14,042
1,551
16,152
16,759
16,904
11,707
21,594
24,633
6,757
28,813
8,430
35,942
10,544
62,444
15,547
96,043
20,665
89,985
27,395
105,494
25,641
135,268
25,638
93,889
18,648
92,002
21,587
172,578
24,034
179,317
34,288
182,332
37,917
237,387
44,975
399,667
44,212
444,610
57,996
724,333
108,427
738,278
116,042
572,034
77,917
607,791
84,673
11,636
120,050
634,630
9,290
129,855
714,372
6,338
190,293
897,825
26,117
230,095
1,223,079
20,910
296,882
1,711,158
18,683
327,648
1,851,806
70,902
449,896
2,512,072
108,012
93,159
24,139
486,323
356,986
380,963
2,723,570 2,021,991 2,081,762
TABLE 7.8
DESTINATION OF EXPORTS AND ORIGIN OF IMPORTS
(% Share)
REGION
1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01
1. Developed Countries
Exports
60.8
Imports
58.3
a. OECD
Exports
57.2
Imports
55.7
b. Other European Countries
Exports
0.6
Imports
0.8
2. CMEA*
Exports
3.0
Imports
1.8
3. Developing Countries
Exports
39.2
Imports
41.7
a. OIC
Exports
12.7
Imports
17.9
b. SAARC
Exports
3.5
Imports
1.5
c. ASEAN
Exports
5.1
Imports
8.9
d. Central America
Exports
0.1
Imports
0.2
e. South America
Exports
0.2
Imports
1.6
f. Other Asian Countries
Exports
14.6
Imports
9.6
g. Other African Countries
Exports
3.0
Imports
2.0
h. Central Asian States
Exports
Imports
Total
100.0
56.7
62.2
57.1
58.6
60.3
52.6
58.9
49.3
55.6
49.9
60.0
48.7
59.4
46.5
59.9
42.2
61.0
36.7
56.7
31.0
54.9
58.7
56.7
57.0
60.0
52.1
58.6
48.5
55.3
49.0
59.7
48.1
59.5
46.1
59.6
41.6
60.6
36.1
56.3
30.5
0.3
0.5
0.4
0.3
0.3
0.5
0.3
0.8
0.3
0.9
0.3
0.6
0.3
0.4
0.3
0.6
0.4
0.6
0.4
0.5
1.5
3.0
1.0
1.3
0.5
1.6
0.4
2.1
0.5
1.9
0.7
1.3
0.6
0.9
0.4
1.0
0.4
1.2
0.4
0.9
44.3
37.8
41.9
41.4
39.2
45.8
40.7
48.6
43.9
48.2
39.3
50.0
39.6
52.6
39.7
56.8
38.6
62.1
42.9
68.1
14.6
16.5
16.0
16.9
13.7
20.9
12.9
21.3
12.9
22.4
11.8
26.0
12.5
23.3
12.7
24.3
14.1
35.2
16.5
39.3
4.7
1.5
3.8
1.5
3.1
1.6
3.4
1.4
2.7
1.5
2.5
2.4
3.5
2.3
5.0
2.2
3.2
1.9
2.9
2.9
5.6
7.3
5.2
8.5
3.7
9.5
4.0
12.6
5.3
11.2
2.5
9.0
3.2
12.6
3.2
14.1
2.8
10.2
3.6
10.6
0.2
0.1
0.3
0.1
0.5
0.1
0.4
0.1
0.3
0.2
0.5
0.2
0.7
0.1
0.8
0.3
0.9
0.2
0.8
0.2
0.5
1.3
0.5
1.6
0.9
1.0
1.0
1.4
1.4
1.2
1.2
1.7
1.6
1.1
1.2
2.1
1.1
1.0
1.2
1.6
14.3
9.5
13.0
11.1
14.0
10.8
14.9
9.5
17.1
9.4
15.6
8.7
12.9
10.7
12.8
10.3
12.4
10.3
13.0
10.6
4.4
1.6
3.0
1.7
2.9
1.9
3.6
2.2
3.8
2.3
4.4
1.9
4.3
2.5
3.5
2.8
3.8
3.0
4.3
2.8
100.0
0.1
100.0
0.4
100.0
0.5
0.1
100.0
0.9
..
100.0
0.8
0.1
100.0
0.9
-100.0
0.5
0.7
100.0
0.3
0.3
100.0
0.3
0.1
100.0
(Contd.)
TABLE 7.8
DESTINATION OF EXPORTS AND ORIGIN OF IMPORTS
REGION
2001-02
2002-03
1. Developed Countries
Exports
58.1
56.1
Imports
34.3
34.4
a. OECD
Exports
57.6
55.6
Imports
33.7
33.5
b. Other European Countries
Exports
0.5
0.5
Imports
0.6
0.9
2. CMEA*
Exports
0.5
0.6
Imports
1.1
0.8
3. Developing Countries
Exports
41.4
43.3
Imports
64.6
64.8
a. OIC
Exports
19.2
22.3
Imports
36.0
35.2
b. SAARC
Exports
2.5
2.4
Imports
2.4
1.9
c. ASEAN
Exports
2.7
2.9
Imports
11.7
12.2
d. Central America
Exports
1.0
0.9
Imports
0.1
0.1
e. South America
Exports
0.9
0.7
Imports
0.7
0.6
f. Other Asian Countries
Exports
11.4
9.9
Imports
10.9
12.5
g. Other African Countries
Exports
3.5
4.0
Imports
2.7
2.3
h. Central Asian States
Exports
0.2
0.2
Imports
0.1
..
Total
100.0
100.0
.. : Insignifcant
P : Provisional
* : Council for Mutual Economic Assistance.
(% Share)
Jul-March
2008-09 2009-10 P
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
58.2
35.5
55.9
38.0
54.7
34.2
54.7
33.3
51.0
30.2
46.4
29.1
46.3
27.5
43.9
27.1
57.6
34.7
55.2
34.7
53.8
32.4
53.8
31.5
50.0
27.1
45.5
27.8
45.4
26.3
43.0
26.0
0.7
0.8
0.7
3.3
0.9
1.8
0.9
1.8
1.0
3.1
0.9
1.3
0.9
1.2
0.9
1.1
0.7
1.2
0.9
2.1
0.9
2.2
1.1
1.8
1.2
1.4
1.2
3.1
1.3
3.7
1.2
1.3
41.1
63.3
43.2
59.9
44.4
63.6
44.2
64.9
47.8
68.4
52.4
67.8
52.4
68.8
54.9
71.6
20.7
33.7
21.9
29.2
23.3
33.7
21.6
32.0
26.4
33.4
30.4
33.9
30.4
35.1
28.5
37.8
3.2
3.1
4.6
3.2
4.4
3.3
4.8
4.5
4.4
5.0
5.0
3.8
5.4
3.8
5.4
3.8
2.7
11.1
2.1
10.0
1.7
9.1
1.9
9.5
1.7
9.9
2.1
10.4
2.0
10.3
3.1
11.2
0.9
0.1
0.9
0.1
0.9
0.1
1.1
0.2
1.0
0.1
1.0
0.2
1.1
0.2
0.9
0.3
0.8
0.6
0.9
1.1
1.0
1.4
1.4
0.8
1.6
1.8
1.4
1.2
1.5
1.2
1.1
0.5
9.4
12.3
8.7
13.7
8.9
13.7
9.2
15.9
8.4
15.7
8.5
15.2
8.2
15.0
11.3
15.6
3.2
2.3
4.0
2.4
4.1
2.2
4.1
1.9
4.2
2.2
4.0
3.0
3.8
3.1
4.6
2.3
0.2
0.1
100.0
0.1
0.2
100.0
0.1
0.1
100.0
0.1
0.1
100.0
0.1
0.3
100.0
..
..
0.1
0.1
0.1
0.1
100.0
100.0
100.0
TABLE 7.9
WORKER'S REMITTANCES
(US$ Million)
COUNTRY
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
1,252.45
27.75
9.86
33.12
12.96
44.24
16.25
12.87
516.16
60.35
105.07
38.74
49.07
17.26
137.02
150.34
126.46
1,238.51
25.42
7.54
40.64
11.62
60.22
15.18
10.91
525.94
51.67
97.76
32.47
47.79
17.50
114.02
157.80
119.79
1,093.36
25.92
5.65
28.88
7.13
47.85
11.85
7.57
493.65
46.07
99.36
29.32
51.12
16.73
2.19
101.19
122.49
95.75
1,317.73
35.90
4.91
27.71
6.90
57.86
13.40
11.52
554.08
61.49
178.26
51.99
90.09
28.96
7.22
109.96
141.09
114.65
1,227.28
33.23
5.67
26.06
3.65
45.43
11.72
14.08
503.22
64.44
161.93
48.98
81.19
28.95
2.81
109.74
141.92
106.19
1,078.05
29.16
3.59
18.98
3.05
38.38
7.97
9.68
418.44
46.11
164.39
44.91
93.07
22.90
3.51
97.94
146.25
94.11
1,237.68
34.31
4.14
16.62
2.65
52.40
7.16
12.17
474.86
61.97
207.70
75.13
101.01
28.54
3.02
98.83
166.29
98.58
875.55
33.31
3.46
11.93
3.09
106.36
5.26
12.94
318.49
44.67
125.09
38.07
70.57
14.69
1.76
73.59
81.95
55.41
913.49
29.36
3.86
10.47
1.58
135.25
5.60
13.29
309.85
46.42
147.79
47.30
87.04
12.80
0.65
73.27
79.96
56.79
1,021.59
23.87
4.90
9.20
3.93
123.39
5.74
13.38
304.43
38.11
190.04
48.11
129.69
12.21
0.03
81.39
134.81
88.40
II. Encashment*
215.03
323.73
352.20
548.37
Total (I+II)
1,467.48 1,562.24 1,445.56 1,866.10
* : Encashment and Profit in Pak Rs. of Foreign Exchange Bearer
Certificates (FEBCs) & Foreign Currency Bearer Certificates (FCBCs)
233.89
1,461.17
331.42
1,409.47
251.87
1,489.55
184.64
1,060.19
70.24
983.73
64.98
1,086.57
(Contd.)
I. Cash Flow
Bahrain
Canada
Germany
Japan
Kuwait
Norway
Qatar
Saudi Arabia
Sultanat-e-Oman
U.A.E.
Abu Dhabi
Dubai
Sharjah
Others
U.K.
U.S.A
Other Countries
TABLE 7.9
WORKER'S REMITTANCES
(% Share)
COUNTRY
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
Cash Flow
Bahrain
Canada
Germany
Japan
Kuwait
Norway
Qatar
Saudi Arabia
Sultanat-e-Oman
U.A.E.
Abu Dhabi
Dubai
Sharjah
Others
U.K.
U.S.A
Other Countries
Total
2.22
0.79
2.64
1.03
3.53
1.30
1.03
41.21
4.82
8.39
3.09
3.92
1.38
10.94
12.00
10.10
100.00
2.05
0.61
3.28
0.94
4.86
1.23
0.88
42.47
4.17
7.89
2.62
3.86
1.41
9.21
12.74
9.67
100.00
2.37
0.52
2.64
0.65
4.38
1.08
0.69
45.15
4.21
9.09
2.68
4.68
1.53
0.20
9.25
11.20
8.76
100.00
2.72
0.37
2.10
0.52
4.39
1.02
0.87
42.05
4.67
13.53
3.95
6.84
2.20
0.55
8.34
10.71
8.70
100.00
2.71
0.46
2.12
0.30
3.70
0.95
1.15
41.00
5.25
13.19
3.99
6.62
2.36
0.23
8.94
11.56
8.65
100.00
2.70
0.33
1.76
0.28
3.56
0.74
0.90
38.81
4.28
15.25
4.17
8.63
2.12
0.33
9.08
13.57
8.73
100.00
2.77
0.33
1.34
0.21
4.23
0.58
0.98
38.37
5.01
16.78
6.07
8.16
2.31
0.24
7.99
13.44
7.96
100.00
3.80
0.40
1.36
0.35
12.15
0.60
1.48
36.38
5.10
14.29
4.35
8.06
1.68
0.20
8.41
9.36
6.33
100.00
3.21
0.42
1.15
0.17
14.81
0.61
1.45
33.92
5.08
16.18
5.18
9.53
1.40
0.07
8.02
8.75
6.22
100.00
2.34
0.48
0.90
0.38
12.08
0.56
1.31
29.80
3.73
18.60
4.71
12.69
1.20
0.00
7.97
13.20
8.65
100.00
(Contd.)
TABLE 7.9
WORKERS REMITTANCES
(US $ Million)
July-March
2008-09
2009-10
5,657.61
6,549.87
114.58
116.10
58.54
82.79
73.05
62.56
3.21
4.69
324.27
332.75
17.77
27.33
245.79
272.99
1,113.58
1,342.77
208.55
210.98
1,210.15
1,497.24
439.31
829.38
735.50
624.28
34.81
42.11
0.53
1.47
406.43
660.97
1,291.47
1,317.71
590.22
620.99
COUNTRY
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
I. Cash Flow
Bahrain
Canada
Germany
Japan
Kuwait
Norway
Qatar
Saudi Arabia
Oman
U.A.E.
Abu Dhabi
Dubai
Sharjah
Others
U.K.
U.S.A
Other Countries
2,340.79
39.58
20.52
13.44
5.97
89.66
6.55
31.87
376.34
63.18
469.49
103.72
331.47
34.05
0.25
151.93
778.98
293.28
4,190.73
71.46
15.19
26.87
8.14
221.23
8.89
87.68
580.76
93.65
837.87
212.37
581.09
42.60
1.81
273.83
1,237.52
727.64
3,826.16
80.55
22.90
46.52
5.28
177.01
10.19
88.69
565.29
105.29
597.48
114.92
447.49
34.61
0.46
333.94
1,225.09
567.93
4,152.29
91.22
48.49
53.84
6.51
214.78
18.30
86.86
627.19
119.28
712.61
152.51
532.93
26.17
1.00
371.86
1,294.08
507.27
4,588.03
100.57
81.71
59.03
6.63
246.75
16.82
118.69
750.44
130.45
716.30
147.89
540.24
26.87
1.30
438.65
1,242.49
679.50
5,490.97
136.28
87.20
76.87
4.26
288.71
22.04
170.65
1,023.56
161.69
866.49
200.40
635.60
28.86
1.63
430.04
1,459.64
763.54
6,448.84
140.51
100.62
73.33
4.75
384.58
28.78
233.36
1,251.32
224.94
1,090.30
298.80
761.24
28.58
1.68
458.87
1,762.03
695.45
7,810.95
153.27
79.07
100.71
5.10
432.05
24.94
339.51
1,559.56
277.82
1,688.59
669.40
970.42
47.84
0.93
605.59
1,735.87
808.87
48.26
46.12
45.42
16.50
II. Encashment*
Total (I+II)
2,389.05
4,236.85
3,871.58
4,168.79
* : Encashment and Profit in Pak Rs. of Foreign Exchange Bearer
Certificates (FEBCs) & Foreign Currency Bearer Certificates (FCBCs)
12.09
4,600.12
2.68
5,493.65
2.40
6,451.24
0.48
0.45
1.02
7,811.43
5,658.06
6,550.89
TABLE 7.9
WORKERS REMITTANCES
COUNTRY
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
Cash Flow
Bahrain
Canada
Germany
Japan
Kuwait
Norway
Qatar
Saudi Arabia
Oman
U.A.E.
Abu Dhabi
Dubai
Sharjah
Others
U.K.
U.S.A
Other Countries
Total
1.69
0.88
0.57
0.26
3.83
0.28
1.36
16.08
2.70
20.06
4.43
14.16
1.45
0.01
6.49
33.28
12.53
100.00
1.71
0.36
0.64
0.19
5.28
0.21
2.09
13.86
2.23
19.99
5.07
13.87
1.02
0.04
6.53
29.53
17.36
100.00
2.11
0.60
1.22
0.14
4.63
0.27
2.32
14.77
2.75
15.62
3.00
11.70
0.90
0.01
8.73
32.02
14.84
100.00
2.20
1.17
1.30
0.16
5.17
0.44
2.09
15.10
2.87
17.16
3.67
12.83
0.63
0.02
8.96
31.17
12.22
100.00
2.19
1.78
1.29
0.14
5.38
0.37
2.59
16.36
2.84
15.61
3.22
11.77
0.59
0.03
9.56
27.08
14.81
100.00
2.48
1.59
1.40
0.08
5.26
0.40
3.11
18.64
2.94
15.78
3.65
11.58
0.53
0.03
7.83
26.58
13.91
100.00
2.18
1.56
1.14
0.07
5.96
0.45
3.62
19.40
3.49
16.91
4.63
11.80
0.44
0.03
7.12
27.32
10.78
100.00
2008-09
(% Share)
July-March
2008-09
2009-10
1.96
2.03
1.77
1.01
1.03
1.26
1.29
1.29
0.96
0.07
0.06
0.07
5.53
5.73
5.08
0.32
0.31
0.42
4.35
4.34
4.17
19.97
19.68
20.50
3.56
3.69
3.22
21.62
21.39
22.86
8.57
7.76
12.66
12.42
13.00
9.53
0.61
0.62
0.64
0.01
0.01
0.02
7.75
7.18
10.09
22.22
22.83
20.12
10.36
10.43
9.48
100.00
100.00
100.00
TABLE 7.10
GOLD AND CASH FOREIGN EXCHANGE RESERVES HELD AND CONTROLLED BY STATE BANK OF PAKISTAN
( US $ Million)
Total
Period
June*
December*
Cash
June*
(2)
December*
Gold(1)
June*
December*
1960
246
272
194
220
52
52
1961
257
238
204
185
53
53
1962
237
249
184
196
53
53
1963
302
279
249
226
53
53
1964
259
219
206
166
53
53
1965
200
208
147
155
53
53
1966
265
197
212
144
53
53
1967
167
159
114
106
53
53
1968
182
239
128
185
54
54
1969
299
311
245
257
54
54
1970
287
184
233
130
54
54
1971
199
171
144
116
55
55
1972
285
286
225
226
60
60
1973
463
489
396
422
67
67
1974
403
472
336
405
67
67
1975
486
418
419
351
67
67
1976
614
539
546
471
68
68
1977
431
534
363
466
68
68
1978
1,010
832
696
444
314
388
1979
904
1,210
414
279
490
931
1980
2,019
1,815
831
627
1,188
1,188
1981
1,866
1,589
1,080
803
786
786
1982
1,460
1,527
862
971
598
598
1983
2,758
2,770
1,975
2,010
783
760
1984
2,489
1,715
1,788
1,074
701
641
1985
1,190
1,452
585
847
605
605
1986
1,638
1,446
968
793
670
653
1987
1,784
1,405
919
545
865
860
1988
1,326
1,258
479
440
847
818
1989
1,227
1,419
502
705
725
714
1990
1,451
958
766
277
685
681
1991
1,390
1,208
674
500
716
708
1992
1,761
1,629
1,069
950
692
679
1993
1,369
2,061
604
1,371
765
690
1994
3,337
3,922
2,545
3,132
792
790
1995
3,730
2,758
2,937
2,039
793
719
1996
3,251
1,780
2,465
1,092
786
688
1997
1,977
2,200
1,287
1,567
690
633
1998
1,737
1,737
1,125
1,122
612
615
1999
2,371
2,080
1,828
1,536
543
543
2000
2,149
1,998
1,547
1,396
602
603
2001
2,666
4,161
2,100
3,595
566
566
2002
5,439
8,569
4,772
7,902
667
667
2003
10,700
11,532
9,975
10,807
725
725
2004
11,883
10,756
11,052
9,925
831
831
2005 **
11,227
10,933
10,310
10,030
917
903
2006
12,810
12,697
11,542
11,429
1,268
1,268
2007
16,414
15,536
15,070
13,804
1,344
1,732
2008
11,465
9,625
9,539
7,834
1,926
1,791
2009
12,190
15,149
10,255
12,863
1,935
2,286
* : Last day of the month.
** : December 2005
(1) : Gold exclude unsettled claims of Gold on RBI since 2005
(2) : Cash includes Sinking fund, Foreign currencies cash holdings and excludes unsettled claims on RBI since 2005
TABLE 7.11
EXCHANGE RATE POSITION (Pakistan Rupees in Terms of One Unit of Foreign Currency)
(Average During the Year)
1995-96 1996-97 1997-98
Country
Currency 1991-92
1992-93
1993-94
1994-95
Australia
Austria
Bangladesh
Belgium
Canada
China
Denmark
Dollar
Schilling
Taka
Franc
Dollar
Yuan
Krone
19.1123
2.1433
0.6518
0.7327
21.3864
4.5781
3.8958
18.2623
3.3550
0.6628
0.8061
20.7982
4.5996
4.3059
20.8851
2.5433
0.7536
0.8559
22.5554
4.3316
4.5298
22.9083
2.9358
0.7673
1.0045
22.3750
3.6803
5.2534
25.4912
3.2639
0.8204
1.1185
24.6581
4.0354
5.9354
30.5300
3.4694
0.9128
1.1854
28.5449
4.6988
6.3775
France
Germany
Holland
Hong Kong
India
Iran
Italy
Franc
Mark
Guilder
Dollar
Rupee
Rial
Lira
4.4402
15.0838
13.3928
3.2047
0.9611
0.3699
0.0201
4.8939
16.5751
14.7394
3.3574
0.9405
0.3507
0.0190
5.2027
17.9039
15.9401
3.9011
0.9609
0.0179
0.0185
5.9623
20.6804
18.4547
3.9902
0.9814
0.0176
0.0198
6.6921
22.9718
20.5247
4.3345
0.9783
0.0192
0.0212
Japan
Kuwait
Malaysia
Nepal
Norway
Singapore
Sri Lanka
Yen
Dinar
Ringgit
Rupee
Krone
Dollar
Rupee
0.1896
86.4030
9.3259
0.5832
3.8505
14.8944
0.5831
0.2177
87.2127
10.1692
0.5741
4.0096
15.9865
0.5660
0.2843
101.5740
11.5288
0.6121
4.1305
19.0212
0.6120
0.3277
104.3749
12.1848
0.6178
4.6915
21.2485
0.6201
Sweden
Switzerland
S.Arabia
Thailand
UAE
UK
USA
Krona
Franc
Riyal
Baht
Dirham
Pound
Dollar
4.1506
16.9154
6.6442
0.9626
6.7874
43.7454
24.8441
3.9886
18.3825
6.9407
1.0028
7.0923
42.0315
25.9598
3.8009
20.8077
8.0642
1.1567
8.2415
45.1600
30.1638
34.1379
35.6217
42.2162
EMU
Euro
IMF
SDR
* : Composite Rate
1998-99
1999-00
2000-01
29.3472
3.4242
0.9513
1.1683
30.4828
5.2154
6.3310
29.3962
3.8557
0.9686
1.2952
31.0445
5.6548
7.0348
32.5665
3.7715
1.0285
1.2866
35.1611
6.2470
6.9724
31.3747
3.7942
1.0794
1.2934
38.4434
7.0601
6.9916
7.2196
24.4163
21.7451
5.0391
1.0894
0.0225
0.0250
7.1856
24.0995
21.3938
5.5762
1.1285
0.0246
0.0246
7.9685
26.7081
23.7008
6.0440
1.0935
0.0266
0.0271
7.9156
26.5372
23.5571
6.6573
1.1862
0.0295
0.0268
7.9536
26.6543
23.6655
7.4906
1.2529
0.0332
0.0269
0.3281
112.5264
13.2905
0.6102
5.3528
23.6411
0.6281
0.3376
129.6859
15.5861
0.6837
6.0509
27.4575
0.6823
0.3411
141.7916
12.5285
0.7034
5.8345
27.0557
0.7038
0.3797
153.8993
12.1327
0.6858
6.1371
27.6043
0.6869
0.4809
169.4791
13.6289
0.7503
6.3421
30.5305
0.7144
0.5109
190.4592
15.3871
0.7893
6.4483
33.1605
0.7026
4.1543
24.7362
8.2475
1.2174
8.4214
48.6951
30.8517
5.0484
28.0734
9.0606
1.2176
9.2329
51.9192
33.5684
5.5230
28.8164
10.4440
1.2176
10.6639
63.0683
38.9936
5.5260
29.3698
11.5178
1.1562
11.7623
71.1450
43.1958
5.9379
34.1098
15.5868
1.3438
15.9133
84.7395
58.4378
46.1616
49.6416
55.2477
58.4654
5.8006
6.0786
32.5174
32.5626
12.4882
13.8125
1.2313
1.3490
12.7583
14.0979
76.8085
82.4937
46.7904
51.7709
(50.0546) *
63.6850
70.1077
74.7760
(Contd.)
TABLE 7.11
EXCHANGE RATE POSITION (Pakistan Rupees in Terms of One Unit of Foreign Currency)
(Average during the Year)
2004-05 2005-06 2006-07
2007-08
2008-09
Average (Jul-Mar)
2008-09 2009-10
47.6760
na
0.8723
na
53.5778
7.7526
-
56.1958
na
0.9088
na
61.9742
8.6128
-
58.2931
na
1.1423
na
67.5867
11.4930
-
57.2858
na
1.1333
na
67.0459
11.3850
-
73.7292
na
1.2091
na
78.5428
12.2480
-
na
na
na
7.7127
1.3389
0.0066
na
na
na
na
7.7772
1.3746
0.0066
na
na
na
na
8.0273
1.5417
0.0067
na
na
na
na
10.1246
1.6468
0.0081
na
na
na
na
10.0276
1.6442
0.0080
na
na
na
na
10.7858
1.7817
0.0084
na
0.5558
202.3816
15.6244
0.8169
9.1841
35.6797
0.5813
0.5216
205.3258
16.0515
0.8296
9.2141
36.4149
0.5872
0.5122
209.8118
17.0649
0.8575
9.7161
39.1651
0.5649
0.5711
228.2954
18.9021
0.9593
11.6417
43.6846
0.5676
0.8012
281.2742
22.3290
1.0285
12.4113
53.5502
0.7024
0.7918
282.1313
22.1965
1.0269
12.4051
53.1377
0.7050
0.9159
291.6088
24.3771
1.1136
14.2240
59.2139
0.7303
7.5195
44.2489
15.3488
15.6727
100.1672
57.5745
8.2949
49.0657
15.8027
1.4763
16.1586
110.2891
59.3576
7.7867
46.8551
15.9608
1.5005
16.2972
106.4344
59.8566
8.6143
49.2385
16.1656
1.6789
16.5107
117.1852
60.6342
9.8890
56.6736
16.6973
1.8786
17.0391
125.2948
62.5465
10.4330
70.0527
20.9341
2.2651
21.3856
126.0915
78.4983
10.5073
69.1958
20.7452
2.2454
21.1973
126.4971
77.7888
11.6943
79.8424
22.2838
2.5058
22.7531
134.6501
83.5628
EMU
Euro
54.9991
61.3083
68.6226
IMF
SDR
78.0627
79.3198
83.2470
na : Common currency Euro is in use of these countries
75.5359
88.5631
72.8661
86.9594
79.1763
90.7726
92.1700
98.6265
Country
Currency
2001-02
2002-03
2003-04
Australia
Austria
Bangladesh
Belgium
Canada
China
Dollar
Schilling
Taka
Franc
Dollar
Yuan
Krone
32.1607
3.9960
1.0826
1.3633
39.1719
7.4149
7.3987
34.2101
na
1.0108
na
38.8234
7.0613
8.2524
41.0626
na
0.9842
na
42.8526
6.9497
9.2250
44.7141
54.8940
0.9774
na
47.5567
7.1676
10.1527
44.7564
na
0.9121
na
51.4986
7.4161
9.7699
France
Germany
Holland
Hong Kong
India
Iran
Italy
Franc
Mark
Guilder
Dollar
Rupee
Rial
Lira
8.3867
28.1084
24.9556
7.8720
1.2787
0.0307
0.0284
na
na
na
7.4990
1.2219
0.0073
na
na
na
na
7.3970
1.2682
0.0069
na
na
na
na
7.6176
1.3253
0.0067
na
Japan
Kuwait
Malaysia
Nepal
Norway
Singapore
Sri Lanka
Yen
Dinar
Ringgit
Rupee
Krone
Dollar
Rupee
0.4884
200.7861
16.1621
0.8033
7.0288
33.9503
0.6624
0.4888
194.5677
15.3944
0.7515
8.1021
33.3406
0.6057
0.5203
194.3681
15.1532
0.7802
8.2191
33.5098
0.5920
Sweden
Switzerland
S.Arabia
Thailand
UAE
UK
USA
Krona
Franc
Riyal
Baht
Dirham
Pound
Dollar
5.9117
37.1824
16.3792
1.4000
16.7231
88.5691
61.4258
6.6910
41.4643
15.5961
1.3742
15.9261
92.7433
58.4995
107.4327 106.6410 119.4486

119.9599 119.0398 131.0320
PublicDebt
RecentdevelopmentswithregardtothesovereigndebtsituationofcountriesrangingfromIcelandto
theUnitedArabEmirates,andmorerecently,ofcountriesintheEurozone,mostprominentlyGreece,
havebeenarudeawakeningforglobalfinancialmarkets.Afteraprotractedperiodofbenignneglect,
policymakers as well as investors are beginning to scrutinize more carefully the health of sovereign
publicfinances.
Lessons from previous debt crises are being relearnt. Escalating public debt does not bode well for
macroeconomic stability and growth as it exerts upward pressure on interest rates and crowdsout
domestic private investment. For developing countries, the higher interest cost associated with
domestic debt places a substantial strain on budgetary resources, with a negative spillover effect on
social sector and development outlays and a slowdown in growth momentum. For external debt,
creditorsmaychargealowerinterestrate(asisthecasewithmostmultilateralandbilateraldonors),
but the exchange rate risk inherent in the accumulation of foreign currency debt leaves a country
vulnerable to developments on the external account and in international markets. Therefore,
policymakersarefacedwithchoicesnotonlyofwhatlevelsofpublicdebttoaccumulate,butalsothe
compositionoftheportfoliowithregardstosource,availability,costsandriskswhichareconsistentwith
thegovernmentsmediumtermfiscal,monetary,andexchange(externalaccount)priorities.
90
Fig-8.1: Emerging Market Countries: Gross Government Debt, 2010

( in % of GDP)
80
Pakistan
70
60
EMCAverage
50
40
30
20
10
Chile
Russia
Saudi Arabia
China
Bulgaria
Belarus
Peru
Indonesia
Romania
Emerging EUR
Ukraine
Colombia
South Africa
Croatia
Mexico
Emerging Asia
Thailand
Turkey
Malaysia
Emerging LAC
Poland
Argentina
Pakistan
Brazil
Hungary
India
Source:IMFWEODatabase
In the aftermath of the global financial crisis and economic slowdown, most countries have acquired
109
substantial amounts of debt as a result of large budgetary outlays and fiscal stimulus targeted at
addressing the hardest hit economic sectors, instilling confidence in markets, and reviving overall
economicactivity.Byaugmentingalreadyhighlevelsofpostcrisispublicdebt,mostcountriesnowface
a daunting challenge in dealing with increased debt burdens. The problem is more pronounced in
developedcountries,specificallyintheEurozone.Fiscaldeficitsinadvancedeconomieshaveincreased
toapproximately9percentofGDP1.DebttoGDPratiosintheseeconomiesareexpectedtoexceed100
percent of GDP in 2014 based on current policies, some 35 percentage points of GDP1 higher than
beforethecrisis.Bycontrast,thepublicdebtaccumulationinemergingeconomieshasbeenlower,with
publicdebtratiosofapproximately30to40percentofGDPintheseeconomies(SeeFig8.1).Giventhe
highereconomicgrowthinemergingeconomiesledbystrongdomesticdemand,thereisamplefiscal
spacetoplacethedebtburdensonadecliningpathwithrelativeease.
Althoughsomewhatinsulatedfromthefinancialcrisis,Pakistantoohaswitnessedariseinpublicdebtin
therecentpast.Fiscalprofligacyintheshapeoflargesubsidies,policyinactionwithregardstorisingoil
prices in 2007, weak revenue collection, pressure on budgetary resources placed by a heightened
securitysituation,andeffortstoeliminatetheintercorporatedebtintheenergysector,haveledtoa
relativelyrapidincreaseinpublicdebt.ThecumulativeeffectofthedepreciationoftheRupeeagainst
the US dollar, on the one hand, and the weakness of the US dollar against third currencies (including
Special Drawing Rights, SDR) in which a significant portion of Pakistans external public debt is
denominated,havealsoplayedasubstantialpartintheoverallincrease.
Based on projections for the end of FY10, Pakistan has one of the highest public debttoGDP ratio
amongstemergingeconomies(asshowninFig8.1).However,policyresponsesinFY10,awithdrawalof
pressure on the external account and a relatively stable exchange rate, in addition to a limit on
borrowing from the central bank have all helped stem the rapid increase of public debt witnessed in
FY09.
8.11OutstandingPublicDebt
ThedefinitionofpublicdebtusedintheEconomicSurveyofPakistanisinconformitywithinternational
conventions.TotalPublicDebt(TPD)includesdomesticdebtpayableinPakRupeeaswellastheshort,
mediumandlongtermPublicDebtportionofExternalDebt&Liabilities(expressedinRupeeterm).In
addition, funds obtained from International Monetary Fund (IMF) for the purpose of budgetary
financinghavealsobeenincludedfromthecurrentfiscalyear.Thestockofpublicdebtdoesnotinclude
the debt and liabilities of the central bank, which includes financing for balance of payment (BoP)
support. Further, publically guaranteed debt and government guarantees issued for commodity
operationsarealsonotincluded.
Usingthisstandarddefinition,TotalPublicDebt(TPD)postedagrowthof12.2percentduringthefirst
nine months of the current fiscal year and reached Rs. 8,160 billion at the end of March 2010. This
increase in the stock of public debt is significantly lower than the rapid increase of 22 percent in the
previousfiscalyear.
ThedomesticcurrencycomponentincreasedbyRs.631billionor16.3percenttoendatRs.4,491billion
in comparison to Rs. 3,860 billion of endJune 2009. This increase accounted for 71 percent of the
aggregateincreaseinTPD.Ontheotherhand,therewasanadditionofRs.253billioninthestock of
World Economic Outlook, April 2010, International Monetary Fund
110
PubliccDebt
foreigncu
urrencydebtwhichmakessuptheremaaining29perccent.Itisinteerestingtono
otethatincon
ntrast
to FY09, the
t increase in the stock of TPD during the current year has mostly
m
been through dom
mestic
sources.A
Arelativelysttableexchanggerate,appreeciationofthedollaragain
nstothermajjorcurrenciess,and
limited acccess to multtilateral and bilateral deb
bt creating flo
ows has neceessitated thiss shift in finaancing
mix.Publiicdebtisincrreasinglycom
mposedofdomesticcurrencydebt,theeshareofwh
hichhasrisenfrom
53percen
ntasofendJu
une2009to5
55percentinMarch2010..
Table8.1:PublicDebt
DomesticC
CurrencyDebt
ForeignCu
urrencyDebt
TotalPubliicDebt
DomesticC
CurrencyDebt
ForeignCu
urrencyDebt
TotalPubliicDebt
DomesticC
CurrencyDebt
ForeignCu
urrencyDebt
TotalPubliicDebt
DomesticC
CurrencyDebt
ForeignCu
urrencyDebt
Memo:
ForeignCu
urrencyDebt(inUS$Billion)
ExchangeR
Rate(Rs./US$,E.O.P)
GDP(inRs.Billion)
TotalRevenue(inRs.Billion)
*Asofend
dMarch,2010
FY05
FY06
FY07
FY08
(Inbillion
nsofRs.)
2337
2610
3275
1973
2140
2705
4310
4750
5980
(Inpercen
ntofGDP)
30.7
30.1
32.0
25.9
24.7
26.4
56.5
54.8
58.4
(Inpercento
ofRevenue)
217
201
218
183
165
180
400
366
399
(Inpercento
ofTotalDebt)
54.2
54.9
54.8
45.8
45.1
45.2
2178
1856
4034
33.5
5
28.5
5
62.1
1
242
2
206
6
448
8
54.0
0
46.0
0
31.1
1
59.7
7
6500
900
0
FY09
FY
Y10*
3860
3417
7277
4491
4
3
3669
8
8160
30.3
26.8
57.1
30.6
3
2
25.0
5
55.6
209
185
393
208
2
170
3
379
53.0
47.0
55.0
5
4
45.0
32.8
35.3
40.2
42.2
4
43.5
60.2
60.6
67.3
81.0
8
84.4
7623
8673
10243
12739
14
4668
1077
1298
1499
1851
2
2155
Source:EAD
D,BudgetWing
g,MoFandDPCOstaffcalcullations
Thedryingupofexterrnalfunding sourceshas putahaltto therapidlyiincreasingexpansioninfo

oreign
a project based,
b
limited
d capacity to
o deliver on these
debt. As most of the foreign currrency loans are
e
comm
mitments. Th
his has madee the
projects has resulted in unutilized lending piipelines of existing
ments under the IMF SBA
A program mo
ore visible du
uring the firstt three quartters of 200910. It
disbursem
shouldbeenotedhere thatonlyap
portionoftheelasttwotran
nches(US$1,,083million) hasbeenuseedfor
budgetaryyfinancingan
ndhence,con
nstitutesapaartoftheforeeigncurrencyycomponentofTPD.Whilethe
remainingg funds received from IM
MF are reflectted on the baalance sheet of the centrral bank (SBP
P) and
hence, do
o not come under
u
the am
mbit of publicc external deebt. The SBA has primarilyy been securred to
support the
t Balance of Paymentss position byy supplementting the foreeign exchange reserves of
o the
country.
OutoftheetotalincreaaseinTPD,Rss.148billion or17
percent is
i attributed
d to depreciiation of naational
currency againsttheU
UnitedStatessDollardurin
ngJuly
2009Marrch2010asP
PKRlost4.2p
percentofits value
duringthiisperiod.Thisimpactofdepreciationo
onthe
publicdeb
btstockhasb
beenmutedinthecurrenttfiscal
Table8.2:Translatio
onalImpactonP
PublicDebt,FY1
10
Currrency
Rs.Biillion
PKRvs.Dollar
14
48
Dolla
arvs.ThirdCurreencies
9..3
NetImpact
138
8.7
*AsofendMarch2
2010 Source:DP
PCOstaffcalcula
ations
111
yearasopposedto20percentdepreciationofthedomesticcurrencyin200809.However,appreciation
ofthedollaragainstmajorinternationalcurrenciescausedatranslationalgain(reductioninstockdueto
exchange rate movement) of US$ 111 million or Rs 9.3 billion in the outstanding stock of foreign
currencypublicdebt.ThenetimpactofcurrencymovementsonTPDforthefirstthreequartersofFY10
stood at Rs 138.7 billion. Fig 8.2 depicts the net impact of translational losses on account of Rupee
depreciationagainstthedollar,andmovementsofthedollaragainstotherinternationalcurrenciesfrom
FY00FY10.Onacumulativebasis,exchangeratelossesamounttoRs1605billionor20percentofthe
current outstanding stock of TPD2. Losses during FY08 and FY09 were significantly higher, owing to a
combinationofalossinvalueoftheRupee,aswellasaweakeningdollarininternationalmarkets.
Fig8.2:NetTranslationalImpactonTotalPublicDebtFY00FY10*
600
Rs.Billion
500
400
CumulativeLossesFY00FY10:
Rs. 1605billion
300
200
100
0
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10
*:AsofendMarch 2010
Source:DPCOStaffCalculation
The quantum of increase on the domestic front in the first nine months of 200910 is nevertheless
alarming. The resurgence of SBP borrowing in the last two months of the third quarter has been the
principal source. However, with the governments commitment to adhere to net zero quarterly
borrowinglimits,thisrisingtrendinthestockofcentralbankdebtisexpectedtostabilizebytheendof
this fiscal year. The shortfall in undisbursed amounts of foreign currency debt was met by a heavy
relianceondomesticbankandnonbanksources.Thegovernmentwasabletoaccessthedebtcapital
markets due to favourable current environment and interest rates. As a result, healthy investment in
government securities and sizeable accruals in major NSS instruments accounted for much of the
increaseinRupeedebt.
8.12ServicingofPublicDebt
Servicing on public debt has aggregated to Rs. 640.2 billion at endMarch 2010. As percent of the
projectedGDPfor200910,thepublicdebtservicingisnow4.4percent.InterestpaymentsofRs.428.5
billionhavebeenincurredondomesticdebt,whereasRs.45billionofthepaymentwasonaccountof
foreign debt. Huge repayments of about Rs. 166.7 billion were made to retire the maturing foreign
currencydebt.Almost46percentofthegovernmentrevenueshavebeenusedtoserviceinterestand
principalpaymentsonpublicdebtduringJuly2009toMarch2010.
Note: Due to unavailability of detailed data the currency composition is assumed to be constant for years before 2007.
112
PublicDebt
Fig8.3:PublicDebtServiceas%ofTotalRevenue
FY05FY10*
50%
40%
30%
20%
10%
0%
FY05
FY06
FY07
FY08
FY09
FY10
Source:DPCO
*:Asofend March2010
Table8.3:PublicDebtServicing,July'09March'10
(inbillionsofRs.)
InterestPayments
473.5
InterestonDomesticDebt
428.5
InterestonForeignDebt
45.0
RepaymentofForeignDebt
166.7
PublicDebtServicing
640.2
(inpercentofGDP)
InterestPayments
3.2
2.9
0.3
1.1
PublicDebtServicing
4.4
(inpercentofRevenue)
InterestPayments
33.8
30.6
3.2
11.9
PublicDebtServicing
45.7
Source:BudgetWing,MoF
As GDP growth does not necessarily translate into a

proportionate increase in revenues, the burden
placed by public debt service obligations on
government resources is more aptly measured by
publicdebtserviceasapercentageofgovernmentrevenues.Weakgrowthinrevenuecollectionanda
fasterrateofaccumulationofdebtduring200708ledtoasharpincreaseinpublicdebtservicingasa
percentageoftotalrevenuesinthefollowingyear.Servicingofpublicdebtamountedto47percentof
total revenues during FY09. However, a subsequent reduction in the pace of debt creation and a
marginaleasinginmonetarypolicystancehaveseenthisindicatorfalltoapproximately46percentin
thefirstthreequartersofFY10.
8.13DynamicsofPublicDebt
OwingtoarevisionintheGDPgrowthforthelasttwoyears,theTPDtoGDPratiohasbeenadjustedto
58.4 percent and 57.1 percent in 200708 and 200809 respectively. For 200910, this ratio in
percentagetermsrestedat55.6percentasofMarch31.Theratiohasdeclinedby1.5percentagepoints
from the previous fiscal year, which has mainly been achieved on account of slowmoving external
inflows.Intermsoftotalrevenues,publicdebtasofendMarchhasimprovedslightlyto3.8times,from
3.9 times in 200809. In real terms, the growth of public debt has been fairly restrained, following a
spikeinFY08.9.7percentgrowthinrealtermswitnessedinFY08,coupledwithnegativerealgrowthof
revenues,ledtoadrasticincreaseinthecountrysdebtburden.
Table8.4:DynamicsofPublicDebtBurden,FY05FY10*
Year
GDPDeflator
Fiscal
Primary
Balance
Balance
FY05
7.7%
FY06
7.0%
FY07
10.5%
FY08
16.2%
FY09
20.3%
FY10
10.1%
*:AsofendMarch2010
3.3%
4.3%
4.3%
7.6%
5.2%
5.1%
1.3%
2.3%
1.5%
2.8%
0.3%
0.5%
RealGrowth
ofDebt[A]
1.7%
0.1%
0.3%
9.7%
1.4%
2.1%
RealGrowthof
Revenue[B]
RealGrowthof
DebtBurden
[AB]
5.7%
7.3%
12.6%
12.8%
10.1%
10.4%
0.7%
10.4%
3.1%
1.8%
6.3%
4.3%
Source:DPCOStaffCalculations
113
AsshowninTable8.4,effortstodecreasethefiscaldeficithavepaiddividendintheformoflowerreal
growthofdebt.Further,positiverealgrowthinrevenuesaboveandbeyondthegrowthindebtduring
theFY09andFY10hastranslatedtoarealreductioninthedebtburden.Itmustbenotedhowever,that
thedecelerationintherealgrowthofdebtwasalsoinfluencedbyveryhighlevelsofinflationwitnessed
inFY09.AsinflationarypressuresintheeconomywerefairlylowerinFY10,therealgrowthindebthas
begun to increase marginally. During the first nine months of the current year, total public debt
increasedby2.1percentinrealterms,whereasendofyearrevenuecollectionisprojectedtogrowby
6.3percent;leadingtoadeclineinthedebtburdenofapproximately4.3percent.
Calculation of real (inflationadjusted) cost of Table8.5:RealCostofBorrowing

Year
External
Domestic
Public
borrowing reflects not only the interest paid on
Debt
Debt
Debt
outstanding debt, but also the price levels and
(inpercent)
exchange rate movements and their impact on the
FY05
4.1
0.8
2.3
portfolio. Historically, external debt has been a
FY06
4.8
1.1
1.6
cheaper source of borrowing for Pakistan. However,
FY07
4.4
5.8
1.1
rupee depreciation against the dollar has had a
FY08
3.3
4.5
4.0
FY09
3.4
3.7
0.5
massive impact on the cost of external debt in
FY10*
5.7
0.2
2.6
various years. The real cost of borrowing from
*:AsofendMarch2010
Source:DPCOstaffcalculations
externalsources,whichisusuallynegative,increased
toashighas3.4percentinFY09owingmostlytotheRupeelosing20percentofitsvalueagainstthe
dollar.Witharelativelystableexchangerate,andtheconcessionalnatureofPakistansexternalloans,
thecostofborrowingforFY10stoodat5.7percentinrealterms.Thecostofborrowingfromdomestic
sourceshasincreasedto0.2percentinthefirstthreequartersofFY10;however,thisincreaseispartly
influencedbylowerinflationarypressuresascomparedtoFY09wherethecostfromdomesticsources
was3.7percentinrealterms.
8.2DomesticDebt
In order to bridge the gap between revenue and expenditure on a governments balance sheet,
sovereigns all over the globe rely on debt creating flows, both external and internal. The foreign
currency component of financing generally depends on factors beyond the reach and control of
governments whereas the domestic sources can be approached at all times, even though at a higher
cost.Theprimeexampleinthiscaseisborrowingfromthecentralbank(referredtoasseignorage,or
deficitmonetisation).
AsforPakistan,stagnantexternalflowshaveimpliedahigherrelianceondomesticfundingsources.The
absenceofefficientandliquiddebtcapitalmarketshasmeantthatthegovernmenthasbeencompelled
towards deficit monetization, which runs counter to its stated aim of improving further the debt
dynamicsofthecountry.Thevulnerabilityofdebtservicechargestointerestratevariationsincreases
withthepilingupofshortermaturitiesindomesticdebt.Additionally,extensivegovernmentborrowing
mayinduceinflationthroughtheexpansionofmoneysupply.
Despite the dangers of excessive reliance on domestic debt, it is important to note that government
borrowing through domestic sources is vital in stimulating investment and private savings, as well as
strengtheningdomesticfinancialmarkets,sinceitprovidesdepthandliquiditytothemarkets.
114
PublicDebt
8.21OutstandingDomesticDebt
Domesticdebt isbroadly classifiedas permanent,floatingand unfundeddebt.Asofend March2010,
theoutstandingstockofdomesticdebtstoodatRs.4,490.7billion(SeeTable8.6).Duringthefirstnine
months of the current fiscal year 200910, Rs. 630.8 billion was added to the stock that yielded an
overallgrowthof16.3percentinthedomesticdebtportfolioofthecountry.ThedomesticdebttoGDP
ratioroseto30.6percentbyendMarch2010,anincreaseof0.3percentagepointsoverendJune2009,
inresponsetorelativelystablenominalGDPgrowth.
Table8.6:OutstandingDomesticDebt,FY05FY10*
FY05
FY06
PermanentDebt
FloatingDebt
UnfundedDebt
Total
PermanentDebt
FloatingDebt
UnfundedDebt
Total
PermanentDebt
FloatingDebt
UnfundedDebt
Memo:
GDP(inbillionofRs.)
*:AsofendMarch2010
526.3
778.2
873.2
2,177.7
514.9
940.2
881.7
2,336.8
8.1
12.0
13.4
33.5
6.8
12.3
11.6
30.7
24.2
35.7
40.1
6,499.8
22.0
40.2
37.7
7,623.2
FY07
FY08
(inbillionsofRs.)
562.7
616.9
1,107.6
1,637.4
940.0
1,020.3
2,610.3
3,274.6
(inpercentofGDP)
6.5
6.0
12.8
16.0
10.8
10.0
30.1
32.0
(inpercentofTotalDebt)
21.6
18.8
42.4
50.0
36.0
31.2
8,673.0
10,243.0
FY09
FY10*
685.9
1,903.5
1,270.5
3,859.9
779.3
2,299.7
1,411.7
4,490.7
5.4
14.9
10.0
30.3
5.3
15.7
9.6
30.6
17.8
17.4
49.3
51.2
32.9
31.4
12,739.0
14,668.0
The shortterm nature of domestic debt is evident by an ever increasing share of floating debt in the
total stock. As of endMarch 2010, more than half of the domestic debt is composed of government
debtinstrumentshavingtenorsofayearorlesser.Thecontributionofpermanentandunfundeddebt
hasdecreasedto17.4percentand31.4percent,incomparisontopreviousyearsshareof17.8percent
and32.9percentrespectively.Highdependenceonshorttermdebtleavesthedomesticdebtportfolio
exposedtorefinancingrisk.
8.21(i)PermanentDebt
ThepermanentdebtonaccountofhealthyinflowsinPakistanInvestmentBonds(PIBs)tothetuneof
Rs.52.4billiongrewby13.6percent.AnalmostequaladditionwasjointlycontributedbyPrizeBonds
(Rs. 27.4 billion) and Ijara Sukuk (Rs. 14.4 billion) during the period under review. Meanwhile, the
governmentsuccessfullyretiredthematuringFederalInvestmentBonds(FIBs).
TheStateBankofPakistan(SBP)conductedfourPIBauctionsintheongoingfiscalyearwiththetargetof
Rs. 10 billion per auction. The market participated with vigor surpassing the target in almost every
auction.AlthoughIjaraSukuk(issuedin200809)madeaonetimeappearanceduringtheperiodunder
review, this fairly new instrument mobilized enormous funds from the Islamic market. Such a strong
inputsuggeststheuntappedpotentialofthebuddingIslamicmarketandcallsforacontinuationofthis
initiativeintheyearstocome.
115
EconomicSSurvey200910
(Rs.billion)
Fig8.4:MajorDomesticDebtInsttrumentsFY0
05FY10
4,200
3,900
3,600
3,300
3,000
2,700
2,400
2,100
1,800
1,500
1,200
900
600
300
0
NSS
PIBs
MRTBs
MTBs
FY05
FY06
F
FY07
FY0
08
FY09
FY10
Source:Bud
dgetWing,DPC
COStaffCalculation
e with the po
olicy steps taaken in the previous
p
yearr to draw a line between debt
Moreoverr, compliance
securities maarket.
creation and
a monetarry policy execcution has im
mparted certaainty to the government
g
Thesesteepsincludepublicationof yearlyauctio
oncalendars andtheirpeeriodicalrevission,adheren
nceto
volumebaasedauctionssandthedeccisionofcuto
offyieldsforp
primaryauctiionsbytheM
MinistryofFin
nance.
Going forward, such measures can
c
be the building blo
ocks of a wellintegrated
w
d and articu
ulated
macroeco
onomicpolicyycoveringfisccal,monetaryyanddebtsecctorsoftheeeconomy.
8.21(ii)FFloatingDebtt
Thestockkoffloatingd
debtexperien
ncedthehighestgrowtho
of20.8percen
ntin200910
0(July2009M
March
2010) am
mong the major categoriess of domesticc debt and ended at Rs. 2,299.7
2
billion as of Marcch 31,
2010. Bullk of this increase is attriibuted to hefty net proceeeds from Market
M
Treasu
ury Bills (MTB
Bs) of
aboutRs.311billionfaallingundertheambitoffloatingdebt.Themarketp
preferenceoffgovernmenttdebt
instrumen
nts, owing to
o risk aversio
on and absen
nce of privatee sector cred
dit demand, greatly
g
assistted in
augmentingtheparticipationinMTTBsauctionovverandabovethetargeteedamounts.
entralbankbo
orrowingthro
oughMarketRelatedTreaasuryBills(M
MRTBs)waslim
mited
Ontheottherhand,ce
toRs.85.7
7billiondurin
ngJuly2009ttoMarch201
10,whichisaresultofthegovernmentstargetundeerthe
SBAofpu
ursuingapositionofnetzzeroquarterlyyborrowingffromSBP.Th
hegrowthof 7.5percentiinthe
stockofM
MRTBsduringgthefirstthreeequartersoff200910alb
beithigherthaan5.2percen
ntwitnessedinthe
previousyyearhasundo
oubtedlyreceededfromtheerateofincreeaseof133p
percentrecord
dedin20070
08.
Subduedcreditdeman
ndfromthep
privatesectorhasbeenanunderlyingth
hemeoftheyyearandaprimary
causeofh
hugeincreme
entsincaseo
ofmarketdeb
btinstruments(PIBsand MTBs).Banksspreferredto
olock
inathigheerratesowin
ngtoageneraalperceptionofaninteresstratepeakin
nthemarket.Furthermore,the
lossesborrnebythebaankingsectorronaccount ofnonperformingloanskkeptthemaw
wayfromreso
orting
to the prrivate sector requirementts, even thou
ugh negligible. With the gradual resu
urgence of private
sector creedit demand lately and market
m
expecctation of an interest ratee hike at thee back of renewed
116
PublicDebt
inflationary pressures, banks have started concentrating on the 3months paper. This may disrupt the
ongoingtrendofheavyinvestmentsinMTBsinfuture.
8.21(iii)Unfundeddebt
The unfunded category of internal debt, composed of NSS instruments, has recorded a modest
expansionof11.1percentduringtheongoingfiscalyear(tillMarch2010).SpecialSavingsCertificates
attractedRs.81.7billionfollowedbyBahboodSavingsCertificatesandRegularIncomeScheme.Massive
retirementsinDefenceSavingsCertificatesturnedthenetaccrualtoanegativeRs.35billionduringthe
periodunderreview.
TheCentralDirectorateofNationalSavings(CDNS)launchedtradablebondswiththenameofNational
SavingsBondshavingmaturityof3,5and10yearsinJanuary2010.Thestockofthesebondsstoodat
Rs.3.7billionasofMarch31,2010withanalmost95percentconcentrationinthe3yeartenor.
The NSS contains a number of instruments with similar features, however targeting different market
segments. Out of eight instruments, three schemes have a 3year maturity, four are a 10year
instrumentandtwoarea5yearinstrument.FromtheincrementalborrowingofRs.172billion,Rs.59
billion or 34.6 percent are generated through Pensioners Benefit Account and Bahbood Savings
Certificatescarryingveryhighinterestrates(SeeTable8.7).
Table8.7:NationalSavingsSchemes
Schemes
Maturity
(years)
SavingsAccount
SpecialSavingsAccount
Pensioners'BenefitAccount
DefenceSavingsCertificates
SpecialSavingsCertificates
RegularIncomeCertificates
BahboodSavingsCertificates
NationalSavingsBonds
PrizeBonds
Total
3
10
10
3
5
10
3,5,10
QuotedRate
(inpercent)
Outstanding
Variance
Percentage
ShareinTotal
31Mar10
MarJun
(inpercent)
(inmillionsofRs.)
8.50%
15,568
(538)
0.31%
11.67%
118,400
30,750
17.96%
14.16%
124,043
14,163
8.27%
12.15%
222,156
(35,458)
20.71%
11.67%
341,100
52,150
30.46%
12.00%
125,047
34,045
19.89%
14.16%
352,639
45,105
26.35%
12.50%
3,650
3,650
2.13%
8.50%
224,765
27,325
15.96%
1,527,367
171,191
100%
Source:CDNS,BudgetWing,MoFandDPCOstaffcalculations
TheembeddedputoptioninmostoftheschemesundertheNSSumbrellacanbeapotentialsourceof
severeliquiditycrisisasaprobableratehikewillimmediatelybecapitalizeduponinthepresenceofa
put option facility. Moreover, automatic rollovers, cash accounting and zero coupon in NSS result in
inconsistent fiscal numbers. For instance, the zero coupon DSCs of almost Rs. 80 billion issued in late
1990sdidnotappearinthebudgetuntiltheywerematuredrecentlyinthelastthreeyears,hittingthe
budget by more than Rs. 400 billion. This cost might have been spread during the 10 year tenor, had
there been an accrual accounting practice prevalent in the CDNS in particular and government in
general.
CDNS was established by the government with the intention of mobilizing savings of retail markets,
however,nonbankinstitutionalinvestmenthastraditionallydominatedthiscategoryofunfundeddebt.
These institutional investors also invest in wholesale markets and benefit from the interest rate
117
arbitragebetweenthetwomarkets.
8.22DomesticDebtBurden
Interest payments on domestic debt largely reflect the servicing cost on previous stock. The interest
paymentsfortheperiodofJuly2009March2010aggregatedtoRs.428.5billion.
Table8.8:DomesticDebtBurden
Fiscal
(inbillionsofRs.)
Year
Domestic
Interest
Debt
Payments
FY05
2,177.7
176.3
FY06
2,336.8
202.5
FY07
2,610.3
326.9
FY08
3,274.6
442.6
FY09
3,860.5
580.5
FY10*
4,490.7
428.5
*:AsofendMarch2010
Tax Revenue
26.7
25.2
36.7
42.1
48.2
41.6
InterestPaymentsas%of
Total
Total
Current
GDP
Revenue
Expenditure
Expenditure
(mp)
19.6
15.8
18.7
2.7
18.8
14.4
18.1
2.7
25.2
19.5
23.8
3.7
29.5
19.4
23.8
4.3
31.4
22.9
28.4
4.6
30.6
21.1
24.9
2.9
Asapercentageofmajormacroeconomicindicators,interestpaymentshavestarteddeterioratingsince
200708.Thisweakeninghasmeantthatpaymentsowingtointerestexpensehaveconsumedamajor
chunk of limited budgetary resources in the past few years. Additionally, this trend indicates that
interestpaymentshaveemergedasthelargestcomponentofcurrentexpenditureinthefiscalaccount.
In continuation of this trend, interest payments on domestic debt in proportion to tax revenue
amountedto41.6percentinthefirstninemonthsof200910.30.6percentofthetotalrevenueshave
beenusedtopayofftheinterestdueoninternaldebt.Similarly,theshareofinterestexpenditureon
domestic currency debt in total and current expenditures has become 21.1 percent and 24.9 percent
respectively.TheratioofinterestpaymentstoprojectedGDPhasdepictedaslightimprovementduring
July2009March2010,decreasingfrom4.6percentin200809to2.9percentasofMarch31,2010(See
Table8.8).
8.3ExternalDebt&Liabilities
Pakistansexternal debtandliabilities (EDL)includeallforeigncurrencydebtcontracted bythepublic
andprivatesector,aswellasforeignexchangeliabilitiesoftheCentralBank.EDLhasbeendominated
bypublicsectorexternaldebtduetoachroniccurrentaccountdeficitandsubstantialforeignfinancing
throughloansfrommultilateralandbilateraldonors.Publicsectorexternaldebtincludesfinancingfor
BalanceofPaymentssupportaswellasforeigncurrencyfinancingofthebudgetdeficit.Debtobligations
of the private sector are fairly limited and have been a minor proportion of EDL. The explicit
concessional terms of loans (low cost and long tenors) contracted with international financial
institutionsordonorcountrieshaveconcealedtheinherentcapitallossassociatedwithforeigncurrency
debt to some extent. On the contrary, after accounting for the exchange rate loss, foreign currency
loans from multilateral and bilateral donors are contracted at a lower rate as compared to domestic
currency debt (an average cost differential of approximately 1.1 percent over the last 19 years).
Consequently, government has historically remained favourable in terms of borrowing through these
channelsgiventhemacroeconomicimportanceofforeignfinancingflowsinPakistan.
8.31OutstandingExternalDebt&Liabilities
During the first nine months of the current fiscal year 200910, Pakistans external debt and liabilities
118
PublicDebt
increasedbyUS$2billionor3.8percent.TheoutstandingstockasofendMarchFY10stoodatUS$54
billionasopposedtoUS$52billionattheendofFY09.Inabsoluteterms,thefirstthreequartersofFY10
havewitnessedthelowestincreaseinthestockofEDLduringthelastthreeyears.
Table8.9:Pakistan:ExternalDebtandLiabilities
1.PublicandPublicallyGuaranteedDebt
A.MediumandLongTerm(>1year)
ParisClub
Multilateral
OtherBilateral
EuroBonds/SaindakBonds
MilitaryDebt
CommercialLoans/Credits
B.ShortTerm(<1year)
IDB
2.PrivateNonGuaranteedDebt(>1year)
3.IMF
ofwhich
CentralGovt.
MonetaryAuthorities
TotalExternalDebt(1through3)
(ofwhich)PublicDebt
4.ForeignExchangeLiabilities
TotalExternalDebt&Liabilities(1through4)
(ofwhich)PublicDebt
OfficialLiquidReserves
TotalExternalDebt(1through3)
1.PublicandPublicallyGuaranteedDebt
A.MediumandLongTerm(>1year)
B.ShortTerm(<1year)
3.IMF
4.ForeignExchangeLiabilities
TotalExternalDebt&Liabilities(1through4)
OfficialLiquidReserves
Memo:
GDP(inbillionsofRs.)
ExchangeRate(Rs./US$,PeriodAvg.)
ExchangeRate(Rs./US$,EOP)
GDP(inbillionsofUSdollars)
*:endMarch'10
FY05
FY06
FY07
31.1
30.8
13.0
15.4
0.8
1.3
0.2
0.2
0.3
0.3
1.3
1.6
32.8
32.6
12.8
16.8
0.8
1.9
0.1
0.2
0.2
0.2
1.6
1.5
35.3
35.3
12.7
18.7
1.0
2.7
0.1
0.1
0.0
0.0
2.3
1.4
1.6
34.0
31.1
1.4
35.4
32.1
9.8
31.1
28.4
28.1
0.2
1.5
1.3
32.3
9.0
6,500
59.4
59.7
109.5
(InbillionsofU.S.dollars)
FY08
FY09
FY10*
40.2
42.2
42.4
39.5
41.6
41.8
13.9
14.0
14.0
21.6
23.1
23.2
1.2
2.0
2.5
2.7
2.2
1.6
0.0
0.2
0.2
0.1
0.2
0.3
0.7
0.7
0.6
0.7
0.7
0.6
2.9
3.3
3.2
1.3
5.1
7.2
1.1
1.5
1.4
1.3
5.1
6.1
35.9
39.0
44.5
50.7
52.7
32.8
35.3
40.2
42.2
43.5
1.3
1.3
1.7
1.3
1.2
37.2
40.3
46.2
52.0
53.9
33.8
36.5
40.7
42.2
43.5
10.8
13.3
8.7
9.5
11.2
(InpercentofGDP)
28.2
27.3
27.0
31.3
30.4
25.8
24.7
24.5
26.0
24.4
25.6
24.7
24.0
25.6
24.1
0.1
0.0
0.4
0.4
0.3
1.2
1.0
0.8
3.2
4.1
1.1
0.9
1.0
0.8
0.7
29.2
28.2
28.1
32.0
31.1
8.5
9.3
5.3
5.9
6.4
7,623
8,673
10,243 12,739 14,668
59.9
60.6
62.5
78.5
84.5
60.2
60.6
67.3
81.0
84.4
127.4
143.0
164.5
162.3
173.6
Source:SBP,EADandDPCOstaffcalculations
Positive developments in the trade balance, stable and robust workers remittances, and the relative
strengthoftheU.Sdollaragainstotherinternationalcurrencieshaveassistedinlimitingthegrowthof
EDL.However,lackofforeigncurrencyfinancingflowshasalsoplayedapartintheconstrainedgrowth
ofEDL,withtheburdenofdeficitfinancingshiftingtodomesticsources.
FollowingisabreakupofthedevelopmentsinthevariouscategoriesofEDL:
119
8.31(i)PublicandPublicallyGuaranteedExternalDebt
PublicandPublicallyguaranteed(PPG)debtconsistsof Table8.10:CompositionofEDL*,FY10
all loans and bonds contracted by the government, or Component
Percent
inwhichthegovernmentisaguarantor.Theseinclude; Public&PublicallyGuaranteed
78.5%
medium and longterm obligations from multilateral
ParisClub
26.0%
and bilateral creditors, Pakistani Sovereign bonds,
Multilateral
43.0%
military, and commercial debt; and shortterm debt
OtherBilateral
4.6%
which is contracted mostly through the Islamic
ShortTerm
1.1%
DevelopmentBank.Theoutstandingstockofmedium
Other
3.8%
andlongtermdebtremainedfairlystagnantduringthe PrivateNonGuaranteed
5.9%
first three quarters of FY10, registering a net increase IMF
13.4%
ofUS$200milliontostandatUS$41.8billionbyend ForeignExchangeLiabilities
2.3%
March FY10. Multilateral debt, which is the single Memo:
largest component of Pakistans EDL, did not witness TotalEDL(InbillionsofUS$)
53.9
anysignificantchangesduringtheperiodunderreview. * EDL:ExternalDebt&Liabilities
The projectbased nature of loans contracted under
this category hinges on Pakistans ability to instill
projectefficiency.Also,limitedaccesstoincreasedavenuesofmultilateralfinancinghasmeantthatthe
increaseinmultilateraldebthasbeenlimitedtoUS$100million.
The second largest portion of PPG debt is contracted from bilateral sources which include Paris Club
donors as well as other countries outside the Paris Club. While no net change was witnessed in the
outstanding stock of Paris Club debt, net inflows from otherbilateral sources amounted to US$ 500
million by endMarch FY10 mostly on account of US$ 200 million budget support made available
throughtheSaudiFundforDevelopment.
Other major developments in the outstanding stock of PPG debt include the repayment of US$ 600
millionInternationalSukukBondinJanuary2010.TheoveralllackofincreaseinthestockofPPGdebt,
although encouraging, signals limited access to foreign currency debt creating flows from multilateral
andbilateralsources.ThedearthofsuchfinancingflowshasmeantthattheGovernmenthashadtorely
ondisbursementsundertheIMFSBAandissuanceofdomesticdebttomeetitsfinancingrequirements.
Going forward, with repayments to the IMF beginning in FY12, access to concessional financing from
multilateralandbilateralsourcesmustbesecured.Increasedefficiencywithregardstoprojectdelivery
willassistinaugmentingthesefundingsources.
8.31(ii)IMFDebt
Similar to FY09, foreign currency debt flows during the year have been dominated by disbursements
undertheIMFSBA.ThethirddisbursementofSDR766.7million(US$1.2Billion)wasmadeonAugust7,
2009 followed by a fourth disbursement of the same amount on December 23, 2009. The recently
disbursed tranches contain an element of budgetary support as opposed to the strictly BoP support
natureofprevioustranches.TheoutstandingstockofIMFdebtnowstandsatUS$7.2billionasopposed
to US$ 5.1 billion at the end of FY09, growing by approximately 40 percent. Out of this outstanding
amount,US$1,083millionisforthepurposeofbudgetarysupport,whiletheremainderisbeingusedto
strengthen the countrys Balance of Payments. The latest tranche of approximately US$ 1.13 billion
dollarswasreceivedonMay19,2010.
120
PublicDebt
8.31(iii)PrivateNonGuaranteedDebtandForeignExchangeLiabilities
Private nonguaranteed debt by endMarch FY10 stood at US$ 3.16 billion, decreasing by US$ 200
millionor5.5percentinthefirstthreequarters.Outofthisamount,US$137millionisforprivatenon
guaranteed bonds while the remainder consists of loans. It is worth noting that substantial private
sectordebtplaysakeyroleinthefearsofadebtcrisisloomingoverdevelopedcountries,speciallythe
Euro zone. The exposure of Pakistans private sector to external debt is limited, thus reducing the
vulnerabilityoftheoveralldebtstock.ForeignExchangeLiabilities,whichmostlyconsistofCentralBank
Deposits,remainedfairlystable,withtheoutstandingstockdecreasingbyamarginalamountofUS$100
million.
8.32CommitmentsandDisbursementsofExternalDebt
Therehasbeenasignificantchangeinthepatternofcommitmentsforprojectandnonprojectaid.The
share of project aid was 35.9 percent during 200809, which increased to 67 percent by endMarch
2010.Unlikepreviousyears,theshareofprojectaidintotalcommitmentshasincreasedduringcurrent
financialyear.
Commitments of foreign economic assistance were $6,388 million during 200809, while total
commitments amounted to $4,730 million during the first nine months of the current fiscal year i.e.,
JulyMarch,200910. About66 percentoftotalcommitments duringJulyMarch200910werein the
shape of project aid while the remaining comprised nonproject aid. The share of BOP/Budgetary
supportintotalnonprojectaidwas17.8percent,TokyoPledges7.1percentandIDB(ST)6.9percent.
Disbursement of foreign economic assistance during 200809 was $4,688 million and $2,135 million
during JulyMarch, 200910. During JulyMarch 200910, disbursements of $2134.8 million were for
different purposes like Programmeloans/Budgetary Support ($561.3 million), Project Aid ($700.1
million), short Term Credits i.e. Trade Financing ($321.7 million), Earthquake Reconstruction &
Rehabilitation ($140.0 million), Tokyo Pledges ($358.0 million), IDPs ($51.5 million), and Afghan
Refugees Relief Assistance ($2.3 million). A summarized table of commitments and disbursements of
foreigneconomicassistanceisgiveninTable8.11.
Table8.11:CommitmentsandDisbursements,FY10*
Particulars
Commitments
200809
200910
(JulyMarch) (P)
Amount
%Share
Amount %Share
I.ProjectAid
2,296
35.9
3,175
67.1
II.NonprojectAid
4,092
64.1
1,555
32.9
a)NonFood
125
2
0
0
b)FoodAid
18
0.3
0
0
c)Budgetary
3,350
52.4
1,229
26
Support/(BOP)
d)IDB(ST)
597
9.3
324
6.8
e)AfghanR.R.A.
2
0
2.2
0
Total(I+II)
6,388
100
4,730
100
*AsofendMarch2010
(US$millions)
Disbursements
200809
200910
(JulyMarch) (P)
Amount %Share Amount %Share
1,272
27.1
840.1
39.3
3,415
72.8
1,295
60.7
175
3.7
0
0
0
0
0
0
2,582
55.1
971
45.5
656
2
4,688
14
322
15.1
0
2.2
0.1
100
2135
100
Source:EconomicAffairsDivision
121
8.33TranslationalImpactduring200910
Whilethestockconsistsofvariouscurrencies,forall
intents and purposes the Pakistans External Debt
exposure is 100 percent dollarized, i.e. all loan
proceedsareconvertedintoPakRupeesatthetime
ofdisbursementandnoexchangecoverisarranged.
This effectively means that the external debt
portfolioisvulnerabletothemovementofUSDollar
exchange rate visvis other currencies and rupee
exchangeratevisvisUSD.AsPakRupeeisnotan
internationallytradedcurrency,theothercurrencies
are bought and sold via selling and buying of USD.
Historically, Pakistan has suffered significant losses
(increaseindebtstockduetocurrencymovements
Table8.12:HistoricalTranslationalImpact
Year
Translational
(Loss)/Gain*
1993
8
1994
(881)
1995
(1,729)
1996
2,485
1997
911
1998
1,683
1999
(685)
2000
(467)
2001
2,463
2002
(1,833)
2003
(1,437)
2004
(1,541)
2005
253
2006
(197)
2007
(67)
2008
(3,121)
2009
(53)
2010**
242
AverageLossPerYear
(220.3)
*:Estimated,**:Asof endMarch2010
Note: Due to unavailability of detailed data the
currency composition is assumed to be constant for
yearsbefore2007.
as opposed to increased inflows). Since 1993,

Pakistanhassufferedanaveragetranslationallossof
approximately US$ 248 million per year. However,
the magnitude of these losses has been more
significant since 200001, with a peak of US$ 3.1
billionintranslationallossessufferedin200708.Itis
important to note that even in years where
translational losses have been limited, Pakistan has
not been able to capitalize on favourable
movements in international currency markets.
Furthermore, these figures only measure the losses
causedbymovementsinUSDollarvs.Thirdcurrency
andnotlossescausedbyappreciationofthedollaragainstthePakRupee.
TherelativestrengthofthedollaragainsttheEuro,Yen,andPoundSterlinghashadapositiveimpacton
Pakistans EDL. During the first nine months of FY10, Pakistan witnessed a translational gain of
approximately US$ 242 million. Sharp appreciation of the dollar against these major international
currencies caused a reduction in the USD equivalent of Pakistans foreign currency public debt of
approximately US$ 924 million in the third quarter of FY10 alone. Going forward, continuing fears of
highlevelsofdebtintheEurozonearelikelytomaintaintherelativestrengthofthedollar.However,
the historic losses due to international exchange rate movements underline the need for a
comprehensive currency hedging framework to be put in place. In this regard, the Debt Management
CommitteehasundertakentheformulationofastrategytohedgethemarketriskinherentinPakistans
externaldebtportfolio.
8.34ExternalDebtServicing
Servicing of external debt and liabilities during the first nine months of FY10 amounted to US$ 4.3
billion. Out of this amount, US$ 3.6 billion was for principal repayments during the period, while the
interest cost on external debt and liabilities reached US$ 771 million. When compared to a stock of
approximatelyUS$55.2billionattheendofFY09,therelativelysmalleramountofinterestpayments
122
PublicDebt
made during the first three quarters of FY10 signal Table8.13:Pakistan'sExternalDebtServicing($millions)

towards the concessional nature of most of the
Years
Actual
Amount
Total
AmountPaid
RolledOver
foreignloanscontractedbyPakistan.Thebulkofthe
FY05
2,783
1,300
4,083
servicing,approximately63percent,wasonbehalfof
FY06
2,896
1,300
4,196
public and publically guaranteed debt, with foreign
FY07
2,870
1,300
4,170
exchangeliabilitiesandprivatenonguaranteeddebt
FY08
3,122
1,200
4,322
making up a small portion of the total servicing
FY09
4,728
1,600
6,328
amount.Principalrepaymentsofpublicandpublically
FY10*
4,346
1,023
5,369
Source:SBP
guaranteed external debt also include the US$ 600 *AsofendMarch2010
millionrepaymentoftheInternationalSukukBondinJanuary2010.
8.35ExternalDebtBurdenandSustainabilityIndicators
Toattainaholisticpictureoftheburdenplacedbyexternaldebtontheeconomy,historicalchangesin
the burden, and to ascertain future direction and threats to the sustainability of the debt stock, an
analysisofratioslinkinglevelsofdebtanddebtservicingtomacroeconomicfundamentals,specifically
of the external account of the economy is mandatory. Managing the levels of external debt, and the
risksassociatedwiththemposepolicymakerswithadifferentsetofchallenges.WhileEDLexpressedas
a percentage of GDP might be a common means of measuring the indebtedness of an economy,
repaymentcapacityismoreaccuratelycapturedthroughexpressingthelevelsofdebtasapercentage
oftheeconomysforeignexchangeearningsandreserves.Additionally,analysisofthecurrentaccount
deficit provides important clues as to the future direction of the external debt path. A nil current
accountdeficitbeforeinterestpaymentandhighergrowthinForeignExchangeEarnings(FEE)compared
totheinterestratepaidonEDLwillensureadeclineinEDLburdenovertime.
Table8.14:ExternalDebtSustainabilityIndicators,FY05FY10*
FY05
FY06
FY07
FY08
FY09
FY10*
EDL/GDP
32.30%
29.20%
28.20%
28.10%
32.00%
31.10%
EDL/FER
2.8
2.8
2.7
4.0
4.1
3.6
EDL/FEE
1.3
1.2
1.2
1.3
1.5
1.5
EDLService/FEE
15.3%
13.5%
12.8%
11.7%
17.3%
11.8%
NonInterestCurrentAccountDeficit
2.9%
0.5%
2.9%
3.8%
7.1%
4.4%
STD/EDL
0.8%
0.5%
0.1%
1.5%
1.3%
1.1%
GrowthinEDL
1.8%
5.1%
8.3%
14.6%
14.3%
2.3%
GrowthinFEE
21.1%
16.3%
5.3%
13.0%
4.2%
3.2%
*:DebtStockasofendMarch2010,FEEendofyearprojection
FEE=ForeignExchangeEarnings,STD=ShortTermDebt,FER=ForeignExchangeReserves
Source:DPCOStaffCalculations
InspiteofamarginalincreaseinthestockofEDLinthefirstthreequartersofFY10,EDLasapercentage
ofGDPhasdeclinedto31.1percent;areductionof100bpsinninemonths.However,asthefigureof
EDLisforendMarch2010,andtheGDPisprojectedforthewholeyear,aslightincreaseinthisindicator
isexpectedinQ4FY10.Historically,Pakistanhashadverylimitedrelianceonshorttermexternaldebt,
therebyreducingtherefinancingrisktothecountrysdebtstock.ByendMarchFY10,STDdeclinedto
1.1percentoftotalEDLasopposedto1.3percentinFY09.
An overall improvement in the external account, coupled with limited foreign currency debt creating
flows,hasledtoadeclineinthegeneralexternalindebtednessofthecountry.Amarginaldecreasein
EDL/FERreflectstherecentconsolidationofforeignexchangereserves,andageneralimprovementof
123
the countrys repayment capacity. Growth in exports and robust workers remittances has led to a
reductioninEDLandEDLserviceaspercentagesofFEE.Ifsuchperformanceissustainedwithregardsto
exportsand currenttransfers,therepayment burdenontheeconomywillbesignificantlylessened.A
reduction in the noninterest current account deficit also eases pressures on the debt portfolio going
forward.However,thepresenceofachronicnoninterestcurrentaccountdeficitneedstobeaddressed
to ensure sustainability of the external debt stock, particularly in light of a rebound in international
commodityprices.
Although Pakistans stock of outstanding External Debt consists mostly of longterm concessional rate
loansfrommultilateralandbilateraldonors,theadditionoftheIMFSBAwhichincludestrancheswitha
shorter repayment horizon and relatively higher interest rates has skewed the maturity profile of the
debtportfolio.Themajorityofrepaymentsaretobemadeintheperiod20112025.
8.36InternationalCapitalMarkets
Accesstointernationaldebtcapitalmarketshasbeenemployedbymanyemergingmarketeconomies
successfully. Although the cost is higher than the concessional financing provided by multilateral
institutions and the risk of adverse impact from currency movements remains, borrowing from global
capitalmarketsisseenasavitalstepinthedevelopmentoffinancialmarketsdomesticallyandinsetting
abenchmarkforsovereignpaper.
Table8.15:PerformanceofPakistansSovereignIssues(asofMay18,2010)
Issuer
Maturity
Amount
(US$million)
IslamicRepublicofPakistan
Mar31,2016
500
IslamicRepublicofPakistan
Jun1,2017
750
Coupon
(%)
7.125
6.875
Spreadover
UST(bps)
544
541
Source:JPMorgan
Pakistanhassuccessfullytappedtheinternationalmarketsinthepast.Thesovereignissuesof2016and
2017 are currently trading at 544 bps and 541 bps over UST (as of May 18, 2010) respectively. This
showsthattheyawningspreadshaverecoveredsharplyonlyrecentlyinresponsetoagradualrecovery
intheinternationalcapitalmarkets.
Fig8.5:Performanceof PakistanSovereignIssuesagainstEMBI+
140
120
100
80
60
40
Pakistan6.875%due2017Price
Pakistan7.125%due2016Price
EMBIPLUSESPPrice
20
0
2Jul07
2Jan08
2Jul08
2Jan09
2Jul09
2Jan10
Source: JPMorgan
124
PublicDebt
The fiscal year 200910 was characterized by the repayment of a maturing International Ijara Sukuk
BondworthUS$600milliondueon27January,2010withnonewissue.Pakistandoesnotconsiderthis
foray a viable option in the shortterm given the still high yields on the existing issues. However, it is
importanttokeeptheinvestorbaseintact.ThetrendintheperformanceofPakistansovereignissuesis
nearly in line with the Emerging Markets Bond Index Plus (See Figure8.5). The 2016 and 2017 issues
have fared well in the recent months owing to some stability on the domestic horizon due to
governmentsconsistenteffortstoputtheeconomybackontrack.Pakistanplanstocontinueaccessing
international markets, though opportunistically, so that the presence of Pakistani paper in these
marketsremainsvisible.
125
TABLE 8.1
INTERNAL DEBT OUTSTANDING (AT END OF PERIOD)
(Rs million)
Fiscal Year/
Type of Debt
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10*
%Change
2009-10/
2008-09
Permanent Debt
349,212
424,767
468,768
570,009
526,179
514,879
562,540
616,766
685,939
779,182
13.6
Floating Debt
737,776
557,807
516,268
542,943
778,163
940,233
1,107,655
1,637,370
1,903,487
2,299,737
20.8
Un-funded Debt
712,010
792,137
909,500
914,597
873,248
881,706
940,007
1,020,379
1,270,513
1,411,690
11.1
1,798,998
1,774,711
1,894,536
2,027,549
2,177,590
2,336,818
2,610,202
3,274,515
3,859,939
4,490,609
16.3
Permanent Debt
19.4
23.9
24.7
28.1
24.2
22.0
21.6
18.8
17.8
17.4
Floating Debt
41.0
31.4
27.3
26.8
35.7
40.2
42.4
50.0
49.3
51.2
Un-funded Debt
39.6
44.6
48.0
45.1
40.1
37.7
36.0
31.2
32.9
31.4
42.7
39.9
38.9
35.9
33.5
30.7
30.1
32.0
Total
Memorandum Items:
Total Debt as % of GDP (mp)

* : End-March 2010
(Percent Share in Total Debt)
30.3
30.6
TABLE 8.2
PUBLIC AND PUBLICLY GUARANTEED MEDIUM AND LONG TERM EXTERNAL DEBT DISBURSED
AND OUTSTANDING AS ON 31-03-2010
Country/Creditor
Public and Publicly Guaranteed Debt (I+II+III+IV)
i) MULTILATERAL
ADB
IBRD
IDA
Other
EIB
IDB
IFAD
NORD. DEV. FUND
NORD. I. BANK
OPEC FUND
ii) BILATERAL
a) Paris Club Countries
AUSTRIA
BELGIUM
CANADA
FINLAND
FRANCE
GERMANY
ITALY
JAPAN
KOREA
NETHERLANDS
NORWAY
RUSSIA
SPAIN
SWEDEN
SWITZERLAND
UNITED KINGDOM
UNITED STATES
b) Non Paris Club Countries
BAHRAIN
CHINA
KUWAIT
LIBYA
SAUDI ARABIA
UNITED ARAB EMIRATES
iii) BONDS
iv) COMMERCIAL BANKS
Debt Outstanding
as on 31-03-2010
41,640
23,221
11,068
1,707
9,831
616
63
319
187
15
7
23
16,572
14,017
67
34
531
6
2,178
1,824
105
6,674
476
117
21
121
80
153
106
10
1,514
2,555
1,882
105
5
442
121
1,572
275
Source: Economic Affairs Division
TABLE 8.3
COMMITMENTS AND DISBURSEMENTS OF LOANS AND GRANTS (BY TYPE)
Plan/
Fiscal Year
VI. 5th Plan
1978-79
1979-80
1980-81
1981-82
1982-83
Sub-Total
VII. 6th Plan
1983-84
1984-85
1985-86
1986-87
1987-88
Sub-Total
VIII. 7th Plan
1988-89
1989-90
1990-91
1991-92
1992-93
Sub-Total
IX. 8th Plan
1993-94
1994-95
1995-96
1996-97
1997-98
Sub-Total
Project Aid
CommitDisbursements
ments
Non-Project Aid
Non-Food
CommitDisbursements
ments
Food
BOP
Commitments
Disbursements
Commitments
Disbursements
Commitments
Relief
Disbursements
(US $ million)
Total
Commit- Disbursements
ments
1,064
1,002
591
887
1,115
4,659
599
808
676
536
744
3,363
190
121
182
320
174
987
213
161
103
174
299
950
55
55
73
110
120
413
50
21
66
89
80
306
86
419
16
10
531
86
419
16
10
531
61
111
293
178
643
61
111
293
178
643
1,395
1,658
973
1,620
1,587
7,233
948
1,470
972
1,102
1,301
5,793
1,580
1,804
1,810
2,035
1,903
9,132
695
903
1,055
1,006
1,223
4,882
166
161
186
331
390
1,234
149
125
93
205
219
791
88
196
163
130
230
807
177
79
245
57
218
776
155
150
135
130
164
734
155
150
135
130
164
734
1,989
2,311
2,294
2,626
2,687
11,907
1,176
1,257
1,528
1,398
1,824
7,183
1,979
2,623
1,935
2,219
1,204
9,960
1,262
1,312
1,408
1,766
1,895
7,643
663
201
346
43
182
1,435
537
386
451
316
232
1,922
392
258
134
322
454
1,560
542
287
136
284
309
1,558
146
217
50
413
146
217
50
413
132
140
111
105
57
545
132
140
111
105
57
545
3,312
3,439
2,576
2,689
1,897
13,913
2,619
2,342
2,156
2,471
2,493
12,081
1,822
2,714
2,219
1,351
776
8,882
1,961
2,079
2,151
1,821
1,552
9,564
3
57
1
1
62
15
23
21
1
1
61
329
279
395
405
578
1,986
251
258
383
409
622
1,923
411
750
1,161
303
211
625
1,139
19
29
10
2
1
61
19
29
10
2
1
61
2,581
3,025
2,681
1,759
2,106
12,152
2,549
2,600
2,565
2,233
2,801
12,748
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
1,382
527
407
970
547
1,210
2,026
3,258
1,365
2,440
2,296
1,620
1,263
1,030
741
846
622
918
2,084
1,308
1,565
1,272
0
0
0
0
0
0
0
133
0
125
0
0
0
0
0
0
0
0
80
175
185
567
81
40
0
0
0
22
0
0
18
270
100
23
114
9
0
0
10
12
0
0
650
284
1,128
2,590
1,236
1,263
1,202
1,225
2,649
1,310
3,947
550
385
1,128
1,880
1,057
755
1,803
1,262
2,058
2,013
3,238
2
2
21
0
11
2
0
1
3
2
2
2
2
5
21
8
3
2
1
3
2
2
2,219
1,380
1,637
3,600
1,794
2,475
3,228
4,506
4,151
3,752
6,388
2,442
1,750
2,186
2,756
1,920
1,380
2,723
3,357
3,381
3,660
4,688
2009-10
(Jul-Mar)
3,175
840
1,553
1,293
4,730
2,135
Project Aid Includes Commitments and Disburesements for Earthquake Rehabilitation & Construction
BOP includes Commitment and Dibursement for IDB Short term and Tokyo Pledeges
Exclusive of IMF Loans
@ : IMF Loan.
@
@
284
469
332
47
350
115
0
425
353
597
TABLE 8.4
ANNUAL COMMITMENTS, DISBURSEMENTS, SERVICE PAYMENTS AND
EXTERNAL DEBT OUTSTANDING (Medium and Long Term)
Fiscal
Year
1960-61
1961-62
1962-63
1963-64
1964-65
1965-66
1966-67
1967-68
1968-69
1969-70
1970-71
1971-72
1972-73
1973-74
1974-75
1975-76
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Debt outstanding
(end of period)
DisUndisbursed
bursed*
171
..
225
..
408
..
661
..
1,021
..
1,325
..
1,696
..
2,099
..
2,532
..
2,959
..
3,425
..
3,766
..
4,022
..
4,427
..
4,796
1,854
5,755
1,811
6,341
1,914
7,189
2,041
7,792
2,514
8,658
2,586
8,765
2,579
8,799
2,921
9,312
3,087
9,469
3,436
9,732
4,321
11,108
5,242
12,023
6,113
12,913
7,070
14,190
7,372
14,730
8,279
15,471
9,232
17,361
9,461
19,044
9,178
20,322
9,014
22,117
9,806
22,292
7,761
22,509
8,583
22,844
6,164
25,423
5,076
25,359
3,421
25,608
2,860
27,215
3,504
28,301
3,811
28,900
5,392
30,813
4,975
32,407
5,838
35,182
6,277
39,530
6,540
41,612
7,451
Transactions during period

Commitments
479
429
645
526
832
537
628
561
656
555
873
143
543
1,268
1,115
951
1,111
963
1,395
1,658
973
1,620
1,587
1,989
2,311
2,294
2,626
2,687
3,312
3,439
2,576
2,689
1,897
2,581
3,025
2,681
1,759
2,106
2,219
1,096
1,168
3,268
1,747
2,125
3,113
4,506
3,726
3,399
5,791
@
@
Disbursements**
342
304
501
541
706
533
623
729
594
564
612
409
355
498
976
1,051
960
856
948
1,470
972
1,102
1,301
1,176
1,257
1,528
1,399
1,824
2,619
2,342
2,156
2,471
2,493
2,549
2,600
2,565
2,233
2,801
2,442
1,490
1,846
2,423
1,729
1,372
2,452
3,163
3,356
3,160
4,032
2009-10
41,839
8,959
4,406
1,813
(Jul-Mar)
.. : not available
@ : Inclusive of IMF(SAF) Loan
** : Excluding short term credits, commercial credits, bonds and the IMF
@
@
Service Payments**
Principal
Interest
Total
11
6
17
20
11
31
34
13
47
44
18
62
37
25
62
41
33
74
52
44
96
62
46
108
93
65
158
105
71
176
101
81
182
71
51
122
107
86
193
118
79
197
144
104
248
141
108
249
175
136
311
165
162
327
234
203
437
350
234
584
360
243
603
288
203
491
390
244
634
453
274
727
513
275
788
603
303
906
723
378
1,101
691
426
1,117
685
440
1,125
741
491
1,232
782
534
1,316
921
592
1,513
999
649
1,648
1,105
673
1,778
1,323
752
2,075
1,346
791
2,137
1,510
741
2,251
1,600
723
2,323
955
399
1,354
893
508
1,400
974
583
1,557
745
462
1,207
793
546
1,339
2,336
659
2,995
871
600
1,470
1,581
982
599
968
644
1,612
1,062
704
1,766
2,195
693
2,888
2,007
* : Excluding grants
550
2,558
$ Million
Debt Servicing as % of
Foreign
Export
Exchange
Receipts
Earnings
GDP
14.9
..
0.4
27.2
..
0.7
22.4
..
1.0
27.4
..
1.2
25.9
..
1.1
29.2
..
1.1
35.2
..
1.3
31.2
..
1.3
44.3
..
1.8
52.1
..
1.8
43.3
..
1.7
20.6
..
1.3
23.6
18.1
3.0
19.2
14.2
2.2
..
16.3
2.2
21.9
13.7
1.9
27.3
15.3
2.1
24.9
11.2
1.8
25.6
12.0
2.2
24.7
11.9
2.5
20.4
10.6
2.1
19.9
8.8
1.6
23.5
9.6
2.2
26.3
10.9
2.3
31.6
12.9
2.5
29.5
13.5
2.8
29.9
15.6
3.3
25.1
14.7
2.9
24.1
14.4
2.8
24.9
14.4
3.1
21.5
13.7
2.9
21.9
13.2
3.1
24.2
15.3
3.2
25.7
16.2
3.4
25.1
16.5
3.4
24.5
16.7
3.4
27.2
17.6
3.6
27.3
17.6
3.8
19.7
13.6
2.6
17.6
11.9
2.1
21.3
13.7
2.8
13.2
7.8
1.7
12.2
6.5
1.6
24.0
13.6
3.1
10.2
5.5
1.3
9.6
5.1
1.2
9.3
4.9
1.1
8.6
4.8
1.1
15.1
1.8
8.2
13.3
7.0
1.5
TABLE 8.5
DEBT SERVICE PAYMENTS OF FOREIGN MEDIUM AND LONG TERM LOANS (Paid in foreign exchange)
(US $ million)
Fiscal Year
Kind
I. PARIS CLUB COUNTRIES

Principal
Interest
Principal
2 Austria
Interest
Principal
3 Belgium
Interest
Principal
4 Canada
Interest
Principal
5 Denmark
Interest
Principal
6 France
Interest
Principal
7 Finland
Interest
Principal
8 Germany
Interest
Principal
9 Italy
Interest
Principal
10 Japan
Interest
Principal
11 Korea
Interest
Principal
12 Norway
Interest
Principal
13 Netherlands
Interest
Principal
14 Russia
Interest
Principal
15 Sweden
Interest
Principal
16 Spain
Interest
Principal
17 Switzerland
Interest
Principal
18 USA
Interest
Principal
19 UK
Interest
Principal
TOTAL (I)
Interest
II. NON-PARIS CLUB COUNTRIES
Principal
1 China
Interest
Principal
2 Czecho - slovakia
Interest
Principal
3 Kuwait
Interest
Principal
4 Libya
Interest
Principal
5 Saudi Arabia
Interest
Principal
6 UAE
Interest
Principal
TOTAL (II)
Interest
1 Australia
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
105.534
4.680
0.030
0.703
0.000
1.654
8.097
1.073
0.000
0.000
0.203
15.315
0.000
0.307
5.741
7.493
2.262
1.778
38.689
73.006
0.123
13.040
2.938
2.577
1.016
0.952
0.000
3.098
1.737
3.407
0.000
1.185
0.000
1.541
43.244
59.906
6.470
8.954
216.084
200.669
0.000
0.000
0.000
0.353
0.000
0.864
0.000
0.740
0.000
0.000
0.034
16.508
0.000
0.157
0.854
7.403
1.115
0.982
46.279
28.445
0.000
5.232
0.000
0.543
0.710
0.637
0.000
3.457
0.000
4.693
0.000
0.860
0.000
0.867
7.839
33.115
3.845
2.153
60.676
107.009
0.000
0.000
0.000
2.072
0.000
3.102
0.000
1.317
0.000
0.000
0.000
47.516
0.000
0.111
3.834
18.903
2.136
2.718
70.319
36.224
0.000
0.000
2.125
1.797
1.102
1.337
0.000
0.000
0.000
1.987
0.000
1.681
0.000
0.941
11.402
61.619
5.643
2.552
96.561
183.877
0.000
0.000
0.695
3.207
0.000
1.413
0.000
1.438
0.000
0.000
28.766
61.557
0.000
0.088
7.925
17.575
0.316
2.753
396.646
129.721
44.834
24.884
2.124
1.537
0.000
2.419
0.000
0.000
0.000
1.962
0.098
1.753
0.000
0.803
1.721
56.098
36.203
6.537
519.328
313.745
0.000
0.000
0.376
4.212
0.000
1.767
0.302
2.766
0.000
0.000
10.636
82.615
0.024
0.164
2.64
20.981
0.541
3.605
48.114
149.982
45.272
23.787
3.877
1.321
0.221
1.894
0.937
3.367
0.412
3.553
0.580
2.372
0.253
1.319
10.492
64.334
0.959
0.545
125.636
368.584
0.000
0.000
1.223
3.637
0.000
1.859
0.841
4.436
0.000
0.000
24.921
81.489
0.055
0.286
12.749
29.826
0.642
2.331
65.577
86.805
96.485
38.168
4.064
2.196
0.528
3.050
18.958
23.375
0.957
7.063
1.369
2.911
0.555
1.530
19.645
61.191
1.916
0.598
250.485
350.751
0.000
0.000
1.145
3.634
4.623
2.003
1.289
5.584
0.000
0.000
31.366
87.430
0.084
0.364
15.294
32.225
21.415
1.168
49.280
91.573
55.725
40.759
12.124
0.598
0.679
3.223
2.751
6.566
1.862
9.262
1.051
3.222
0.943
2.244
28.396
63.618
1.076
0.655
229.103
354.128
0.000
0.000
2.680
4.483
10.326
2.266
1.662
5.359
0.000
0.000
35.983
99.483
0.108
0.360
16.202
36.354
24.039
1.294
46.528
103.564
56.254
22.623
12.124
0.460
0.654
3.656
2.859
6.436
2.768
9.042
0.857
3.149
1.467
3.363
20.261
62.136
0.110
0.382
234.882
364.410
0.000
0.000
1.698
2.153
0.281
0.952
0.833
4.257
0.000
0.000
14.355
42.720
0.041
0.104
6.846
15.070
0.205
0.465
42.547
137.479
29.886
9.770
1.251
0.580
0.275
3.130
1.364
3.165
1.434
2.711
0.392
1.249
0.725
1.631
9.500
27.542
0.072
0.256
111.705
253.234
163.019
29.702
3.767
0.000
1.478
0.000
0.000
0.000
0.000
0.466
0.000
0.000
168.264
30.168
90.810
20.699
0.000
0.000
1.226
0.000
0.000
0.000
0.000
0.057
0.000
0.336
92.036
21.092
35.228
25.661
0.000
0.000
3.030
0.900
0.000
0.000
13.079
2.900
1.000
0.824
52.337
30.285
14.798
13.980
0.000
0.000
5.395
2.195
0.000
0.000
5.424
1.285
1.000
0.824
26.617
18.284
13.868
13.310
0.000
0.000
5.733
2.032
0.000
0.000
5.373
1.122
0.000
0.678
24.974
17.142
18.967
7.377
0.000
0.000
7.054
2.203
0.000
0.000
3.383
1.162
0.000
1.015
29.404
11.757
14.148
11.623
0.000
0.000
7.079
2.369
14.229
1.789
0.000
1.168
0.000
1.784
35.456
18.733
14.148
10.060
0.000
0.000
7.408
2.438
1.823
0.060
0.000
1.171
0.000
2.122
23.379
15.851
13.074
8.473
0.000
0.000
5.355
1.800
0.100
0.029
0.833
0.584
0.000
2.123
19.362
13.009
2009-10
(Jul-Mar)
2.144
2.183
0.373
1.086
0.874
0.816
14.001
48.273
0.057
0.053
5.183
10.123
0.223
0.213
41.678
68.876
4.665
5.055
1.252
0.534
0.159
3.112
1.193
3.102
1.507
1.376
0.257
1.03
0.859
0.767
6.422
22.412
0.059
0.061
80.906
169.072
13.074
39.53
6.205
2.343
0.1
0.07
58.278
4.015
2.122
77.657
48.080
(Contd.)
TABLE 8.5
DEBT SERVICE PAYMENTS OF FOREIGN MEDIUM AND LONG TERM LOANS (Paid in foreign exchange)
(US $ million)
Fiscal Year
Kind
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
245.272
75.061
322.704
77.419
112.724
51.049
7.962
2.043
2.956
0.612
8.3
0.243
699.918
206.427
236.757
74.020
294.377
99.280
118.566
50.918
7.468
1.802
3.504
0.795
270.712
11.039
931.384
237.854
261.303
89.089
273.293
110.839
127.293
59.761
8.362
1.827
4.066
1.690
271.712
12.039
946.029
275.245
330.746 290.259
119.058
97.158
296.781 243.627
111.589
64.652
143.618 126.149
73.878
64.170
8.413
7.188
1.951
1.433
6.942
4.544
3.726
4.126
25.000 791.501
22.866
28.026
811.500 1463.268
333.068 259.565
2009-10
(Jul-Mar)
III. MULTILATERAL
Principal
Interest
Principal
2 IBRD
Interest
Principal
3 IDA
Interest
Principal
4 IFAD
Interest
Principal
5 IDB
Interest
Principal
6 IDB (ST)
Interest
Principal
TOTAL (III)
Interest
IV. DEVELOPMENT FUNDS
Principal
1 NORDIC
Interest
Principal
2 OPEC Fund
Interest
Principal
3 Turkey (EXIM Bank)
Interest
Principal
4 E.I. Bank
Interest
Standard charted Principal
4
Bank
Interest
Principal
TOTAL (IV)
Interest
V. GLOBAL BONDS
Principal
1 Euro Bonds
Interest
Principal
2 Saindak Bonds
Interest
Principal
3 US Dollar Bonds (NHA
Interest
Principal
TOTAL (V)
Interest
Principal
TOTAL (I+II+III+IV+V)
Interest
Total
VI. OTHERS
Principal
1 NBP's
Interest
Principal
2 Bank of Indosuez
Interest
Principal
3 NBP Bahrain
Interest
Principal
4 ANZ Bank
Interest
Principal
5
Cash (ST)
Interest
Principal
IMF
6
Interest
Principal
TOTAL (VI)
Interest
Principal
Total (I+II+III+IV+V+VI)
Interest
Grand Total (P+I)
1 ADB
247.044
151.188
227.914
153.780
66.534
27.935
7.685
2.206
23.246
3.955
241.442
151.668
233.789
132.161
72.592
30.054
7.354
1.996
23.083
2.061
265.981 1370.429
172.738 179.919
249.499 287.173
110.541
94.797
83.452
97.926
39.885
45.063
7.504
7.712
1.751
2.106
9.679
3.208
1.046
0.731
572.423
339.064
578.260
317.940
616.115 1766.448
325.961 322.616
1.918
2.087
8.003
0.749
0.000
5.981
0.000
0.254
2.023
1.065
6.597
0.754
0.000
2.514
0.000
0.234
2.232
0.723
6.504
0.707
9.959
0.388
0.000
0.939
2.375
0.565
5.178
0.595
0.000
0.000
0.637
1.722
2.519
0.685
4.800
0.546
12.900
1.875
0.679
2.592
2.442
0.917
4.561
0.591
25.800
2.776
1.345
3.324
2.482
1.007
4.204
0.571
12.900
0.648
2.094
4.262
2.562
0.875
4.935
0.495
0.000
0.000
2.600
3.847
1.281
0.281
2.849
0.387
0.000
0.000
1.583
1.626
9.921
9.071
8.620
4.567
18.695
2.757
8.190
2.882
20.898
5.698
34.148
7.608
21.680
6.488
10.097
5.217
5.713
2.294
0.200
0.000 155.458 155.459 155.458 155.459
0.000
0.000 500.000
62.685
62.340
62.023
39.181
57.644
91.561 145.000 207.667 151.439
7.716
4.526
0
0
0
0
4.527
4.527
0.000
1.533
6.544
0
0
0
0
0.282
0.282
0.000
21.903
21.903
21.903
21.903
21.903
0
21.903
21.903
21.963
16.573
7.118
4.594
3.326
4.414
0
5.684
5.684
3.680
29.819
26.429 177.361 177.362 177.361 155.459
26.43
26.43 521.963
80.791
76.002
66.617
42.507
62.058
91.561 150.966 213.633 155.119
996.511 766.021 961.069 2497.945 1048.787 1400.880 1258.698 1106.288 2122.011
659.763 526.610 609.497 700.034 659.909 699.531 805.560 932.179 683.221
1656.274 1292.631 1570.566 3197.979 1708.696 2100.411 2064.258 2038.467
0.000
0.000
5.130
2.262
0.000
0.000
2.500
1.392
0.000
0.000
3.195
0.975
0.000
8.500
2.500
1.535
0.000
0.870
9.585
1.012
0.000
1.410
0.000
0.000
0.000
0.866
6.245
0.213
9.286
0.621
0.000
0.000
3.111
0.981
0.000
0.000
4.286
0.983
0.000
0.000
16.280
7.416
2.945
1.118
0.000
0.000
0.000
0.469
4.286
0.552
16.280
10.370
2.979
1.077
0.000
0.000
0.000
0.000
4.286
0.856
17.280
11.370
3.016
0.804
0.000
0.000
4.286
0.474
0.000
6.657
16.280
9.105
2.988
0.335
0.000
0.000
3.571
0.111
0.021
4.048
66.28
5.766
7.6
5.7
9.6
15.5
23.7
23.5
24.5
23.6
72.9
3.7
11.0
3.3
1.7
9.4
12.5
13.3
17.0
10.3
1004.141 771.716 970.654 2513.476 1072.464 1424.391 1283.243 1129.870 2194.871
663.417 537.620 612.789 701.734 669.289 712.040 818.863 949.219 693.481
1667.558 1309.336 1583.443 3215.210 1741.753 2136.431 2102.106 2079.089 2888.352
355.887
87.2
198.325
29.451
133.739
70.773
6.798
1.307
5.734
3.359
349.923
12.406
1050.406
204.496
0.749
0.119
2.848
0.502
4.204
0.983
50.000
3.170
57.801
4.774
600
106.259
21.903
1.485
621.903
107.744
1888.673
534.166
3.022
0.142
116.279
2.849
0
13.379
119.3
16.4
2007.974
550.536
2558.510
TABLE 8.6
TERMS OF FOREIGN LOANS/CREDITS CONTRACTED BY PAKISTAN
Lending Country/Agency
A. Paris Club Countries
1. Germany
2. Japan
3. France
4.Italy
Sub-Total (A):
B. Non-Paris Club
1. China
2. Kuwait
3. Saudi Arabia
4. Korea
5.UAE
Sub-Total (B):
C. Multilateral
1. I DB (ST)
2. IDB
3. IDA
5. ADB
6. OPEC
7. IBRD
8. IFAD
Sub-Total (C):
Total (A+B+C)
2006-07
Interest Rate/
Commission(%)
Amortization
(years)
5.8
197.8
50.2
253.8
0.75
1.3
LIBOR EURO 6 months -200bps
-
40
30
20
-
38.1
133.1
171.2
2.5
LIBOR 12 months +20 Bps
2.5
24
2
25
425
200.0
912.1
1443.3
10.0
100
3090.4
3515.4
LIBOR 6 months '+ 60 bps

LIBOR 6-12 months+60-2.15 bps
0.75
1-1.5& LIBOR+60bps
1.25
LIBOR 6 months + 60 bps
-
2
1-18
35
15-32
20
20
-
2008-09
Interest Rate/
Commission(%)
Amortization
(years)
Amount
(US $ Million)
138.3
98.3
236.6
0.75
LIBOR EURO 6 months -200bps
40
20
125.2
800
205.2
3.25
0-5
1.0
3
10-15
30-40
Amount
(US $ Million)
Amount
(US $ Million)
1. Germany
2. Japan
3.France
Sub-Total (A)
B. Non-Paris Club
1. Saudi Arabia
2. China
3. Korea
4. Kuwait
Sub-Total (B)
C Multilateral
1. IDA
2. ADB
3. OPEC
4. I DB
5. IDB Stort-term
6. IFAD
7.IBRD
8.EIB
Sub-Total (C)
Total (A+B+C)
2007-08
Interest Rate/
Commission(%)
Amortization
(years)
460.3
0.2-1.3
20-30
12.1
472.4
0.0
20.0
327.7
40.1
3%
2%
15
26
20.0
1%
30
352.8
224.2
259.2
1436.8
5.3
5.8
1.25-5.1
0.75+4.9%
1-1.5 &Libor+60bps
2.5
1
1-18
35
15-24
20
36.3
2314.6
3174.8
0.75
40
2009-10 ( July- March )

Interest Rate/
Commission(%)
Amortization
(years)
387.8
1130.4
1528.7
1759.7
66.3
287.8
596.5
0.75
Libor+0.6
Libor+1.85
Libor+0.55 and 3.825
Libor+2.5
35
24
20
1-18
1
173.4
0.75
30
4412.4
5779.4
Amount
(US $ Million)
249.4
103.6
353
1.2 fixed
1.6 fixed
30
280
1505.8
2 fixed and Libor 3 months +0.5

1-2 fixed and Libor 6 months +0.22
8-20
20-25
49.9
1835.70
1 fixed
25
508.4
151.7
0.75 fixed
1.5 and Libor 6 months + 0.6
35
23
140
324.4
18.8
US Swap rate 15 years +1.2

Libor Euro 6 months +2.15
-
20
1
26
149.5
1292.8
3481.5
Libor Euro 6 months + 0.15
35
TABLE 8.7
GRANT ASSISTANCE AGREEMENTS SIGNED
1999-00
I. Paris Club Countries
1. Australia
2. Austria
3. Canada
4. Germany
5. Japan
6. Netherlands
7. Norway
8. Korea
9. Switzerland
10. UK
11. USA
12. Italy
Sub-Total (I)
II
1.
2.
3.
4.
5.
Non Paris Club Countries

China
Iran
UAE
Oman
Saudi Arabia
Sub-Total (II)
III Multilateral
1. ADB
2. EEC / EU
3. Islamic Development Bank
4. IDA
5. IBRD
6. UN and Specialised Agencies
7. UNDP Special Grant
8. World Food Programme
9. UNFPA
Sub-Total (III)
IV Relief Assistance for
A. Afghan Refugees
B. Earthquake
1. AFGHANISTAN
2. ALGERIA
3. AUSTRIA
4. AZERBAIJAN
5. BHUTAN
6. BRUNEI
7. CHINA
8 .CYPRUS
9. INDONESIA
10. JORDAN
11. MALAYSIA
12. MOROCCO
13. OMAN
14. PAK-TURK FOUNDATION
15. SAUDI ARABIA
16. SOUTH KOREA
17. THAILAND
18. TURKEY
19. UK
20. ADB
21. WB (IDA)
22. Germany
23. IDB
24. MAURITIUS
Sub-Total (IV)
Grand Total (I+II+III+IV)
(US $ million)
2000-01
2001-02
2002-03
2003-04
2004-05
0.3
5.1
2.3
3.5
1.9
2005-06
2006-07
0.1
0.7
50.7
46.0
21.0
113.5
3.9
10.4
3.2
31.4
67.8
2008-09
9.4
5.5
6.6
41.6
37.3
90.5
147.0
2.6
247.3
16.5
80.8
103.1
45.7
630.6
760.7
8.2
158.8
65.4
287.0
79.0
129.4
278.9
44.1
647.5
829.3
0.7
227.5
514.3
842.5
67.7
269.4
374.4
7.7
-
6.6
50.1
31.0
-
0.2
-
0.0
-
49.4
-
0.4
7.7
56.7
31.0
100.0
100.0
50.0
50.2
0.0
0.0
49.4
0.4
2.8
1.5
5.4
0.3
175.0
68.7
21.2
0.3
0.3
10.1
11.4
1.2
5.0
58.1
55.6
114.8
3.2
67.0
27.4
26.6
5.9
130.3
2.0
20.8
0.2
11.0
2.1
2.0
371.8
20.8
247.7
0.2
922.2
11.0
441.3
2.1
404.9
0.0
945.7
1.0
0.8
1.0
51.7
20.8
43.3
73.7
1.5
3.9
111.0
116.4
14.7
33.0
4.3
1.5
0.2
0.4
75.2
0.5
35.9
2009-10
(Jul-Mar)
0.9
13.8
3.7
65.1
15.7
2007-08
136.9
118.9
142.5
377.4
331.9
794.5
272.7
567.0
1179.9
0.0
25.2
66.5
9.1
0.1
0.5
1.9
2.5
1.4
177.4
74.7
1.5
30.7
66.5
1.5
3.4
1.6
2.2
2.2
0.5
1.0
1.5
0.1
0.6
36.8
0.1
1.0
1.0
1.0
1.5
5.0
4.0
200.0
0.5
0.5
150.0
-
0.3
0.0
406.9
1426.9
133.3
-
5.5
300.0
10.0
136.7
635.2
301.6
12.2
2.2
576.2
609.9
1248.6
Source : Economic Affairs Division
TABLE 8.8
TOTAL LOANS AND CREDITS CONTRACTED
(US $ million)
1. Austria
2. Australia
3. Belgium
4. Canada
5. France
6. Germany
7. Japan
8. Netherlands
9. Norway
10. Spain
12. UK
13. USA
14. Italy
15. Sweden
Sub-Total (A)
B. Non-Paris Club Countries:
1. China
2. Korea
3. Kuwait
4. Saudi Arabia
5. Turkey (EXIM Bank)
6. Abu Dhabi Fund
Sub-Total (B)
C. Multilateral:
1. IBRD
2. IDA
3. ADB
4. IFAD
5. European Investment Bank
6. OPEC Fund
7. IDB
9. KPC
10. IDB (ST)
Sub-Total (C)
Grand-Total (A+B+C)
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
16.0
-
102.6
500.0
2.0
566
10.0
10.0
18.2
2007-08
2008-09
(Jul-Mar)
2009-10
26.0
-
50.0
6.0
198.2
-
12.1
60.5
26.0
0.0
102.6
245.0
254.2
472.5
236.0
353.0
44.4
287.0
118.2
355.0
322.2
17.0
328.0
20.0
800.0
205.0
1505.8
18.2
38.0
82.4
265.0
552.0
118.2
25.0
25.0
34.3
389.3
88.5
51.8
347.6
409.0
17.4
833.5
860.0
14.2
268.0
878.0
53.0
691.0
879.0
22.2
50.0
10.0
44.0
10.0
17.0
15.0
469.0
1,297.0
1,389.4
332.0
2,066.7
2,679.2
47.0
1,208.0
1,352.2
63.7
-
284.0
424.2
1,008.1
1.0
32.6
1.9
9.0
-
245.0
350.0
2,045.2
2,070.2
98.0
138.0
460.4
103.6
249.4
40.0
125.0
49.9
280.0
339.2
38.1
133.1
171.2
388.0
1130.0
1835.7
340.0
601.8
725.2
319.0
1166.4
835.0
54.0
100.0
912.0
1443.3
-
259.1
1436.4
36.4
8.0
121.0
10.0
200.0
5.1
224.0
115.0
1,790.0
2,281.9
2,495.4
3,079.6
425.0
3,090.3
3,515.7
173.4
1529.0
1760.0
66.0
288.0
508.4
151.7
18.8
149.5
140.0
324.4
353.0
597.0
2,314.0
4,413.4
1,292.8
3,174.5
5,779.4
3,481.5
Source : Economic Affairs Division
Poverty
Povertyisaboutdenialofopportunitiesandfulfilmentofhumanpotential.Povertyandinequalityare
closely related, and inequality appears to have been on the rise worldwide in recent decades at both
national and international levels. More than 80 percent of the worlds population lives in countries
whereincomedifferentialsarewidening.Thepoorest40percentoftheworldspopulationaccountfor
only5percentofglobalincome.Ontheotherhand,therichest20percent accountfor75percentof
worldincome,accordingtotheUnitedNationsDevelopmentProgramme.
Povertyistheprincipalcauseofhungerandundernourishment.Accordingtomostrecentestimatesof
theFood&AgricultureOrganizationoftheUnitedNations(FAO,2009),thenumberofhungrypeople
world wide has reached 963 million, or roughly 15 percent of the estimated world population. This
representsanincreaseof142millionoverthefigurefor199092.
Poverty essentially consists of two elements, a narrowlydefined income poverty and a broader
concept of human poverty (referred to as the poverty of opportunities by late Dr. Mahbub ul Haq).
Incomepovertyisdefinedasthelackofnecessitiesforminimummaterialwellbeingdeterminedbythe
nationalpovertyline.Humanpovertymeansthedenialofchoicesandopportunitiesforatolerablelife
inalleconomicandsocialaspects.
Threepovertymeasuresarecommonlyused;
a) Head count ratio (HCR): the proportion of population below the national or international poverty
lineasthecasemaybe.
b) Poverty gap ratio; a measure of poverty obtained by multiplying the head count by the average
relativedistanceatwhichthepoorarefromthepovertyline.
c) Severity of poverty measure; where the weight given to each poor person is proportional to the
squareoftheincomeshortfallofthepoorfromthepovertyline.
The head count ratio is a crude measure of poverty
because it completely ignores the gap in incomes
fromthepovertylineandthedistributionofincome
among the poor. The severity of poverty index has
moredesirableproperties.
PakistanPovertyLineinHistoricalPerspective (Rs)
Year
PovertyLine
199899
673.40
200001
723.40
200405
878.64
200506
948.47
In case of Pakistan, poverty line is caloriebased.

Expenditure on calorie intake of 2350 calories per
adult equivalent per day, alongwith consumption expenditure on nonfood items, is aggregated to
construct a poverty line. This poverty line is adjusted at the time of the poverty estimation after
accountingfortheinflationaryimpactininterveningyears.
127
PovertyOverviewGlobalProfile
GlobalPovertyTrends;19812005
Povertyismostoftenmeasuredinmonetaryterms,capturedbylevelsofincomeorconsumptionper
capita or per household. The commitment made in the Millennium Development Goals to eradicate
absolutepovertybyhalvingthenumberofpeoplelivingonlessthan$1.25adayrepresentsthemost
publicizedexampleofanincomefocusedapproachtopoverty.
Basedonincomeapproach,thelast20yearshaveseenasignificantreductioninthedepthandseverity
of extreme poverty in the developing world. In absolute terms, extreme income poverty has fallen
substantially,withthenumberofpeoplelivingonlessthan$1.25adayhavingdeclinedfromahighof
1.9 billion in 1981 to a low of 1.4 billion in 2005. In relative terms, the proportion of people living in
extremepovertymorethanhalvedfrom52to25.7percentduringthisperiod.
Asaconsequenceofthefasteconomicgrowthandincreaseinstandardsofliving,developingcountries
inAsiaandthePacificmadesignificantprogressinreducingpoverty.Fifteencountriesrepresenting93
percentofthepopulationwitnessedtheirheadcountpovertyratesreducedfrom52percentin1990to
around 25 percent in the mid 2000s (Table9.1). Decline in poverty rates were sharpest in China,
Indonesia,VietnamandThailand.InonlyoneofthecountriesshownintheTablei.e.inTurkey,didthe
povertyrateincreaseovertheperiod.
Table9.1:Povertyreductionbetween1990andthemid2000s
Headcount
NumberofPoor(Million)
povertyrates
(%)
Poverty
Initial Final
Initial
Final
Country
Period
reduction
Bangladesh
19922005
66.8
9.6
80.4
76.0
4.4
Cambodia
19942004
48.6
40.2
5.4
5.5
0.1
China(rural)
19902005
74.1
26.1
614.2
204.2
409.9
China(urban)
19902005
23.4
1.7
73.2
9.1
64.1
India(rural)
19882005
55.6
43.8
344.5
353.3
8.9
India(urban)
19882005
47.5
36.2
98.1
117.3
19.2
Indonesia(rural)
19872005
70.5
24.0
85.7
27.3
58.3
Indonesia(urban)
19872005
62.0
18.7
29.0
19.7
9.3
Iran(IslamicRepublicof)
19902005
3.9
1.5
2.2
1.0
1.2
Kazakhstan
19962005
5.0
3.1
0.8
0.5
0.3
Lao Peoples Democratic
19922002
55.7
44.0
2.5
2.5
0.0
Republic
Pakistan
19912005
64.7
22.6
76.5
37.5
39.2
Philippines
19882006
30.5
22.6
18.1
19.7
1.6
RussianFederation
19932005
2.8
0.2
4.2
0.2
4.0
SriLanka
19852002
20.0
14.0
3.2
2.7
0.6
Thailand
19882004
17.2
0.4
9.5
0.3
9.2
Turkey
19872005
1.3
2.7
0.7
1.9
1.2
VietNam
19932006
63.7
21.5
44.7
18.2
26.5
Median
48.0
22.0
Total(15countries)
%ageshareof
eachcountryin
thetotal
poverty
reduction
0.7
0.0
68.8
10.8
1.5
3.2
9.8
1.6
0.2
0.1
0.0
6.6
0.3
0.7
0.1
1.5
0.2
4.4
1492.9
896.9
596.0
100.0
Source:EconomicandSocialSurveyofAsiaandthePacific2010.ESCAP,UN
128
Poverty
Thetotalnumberofpoorinthe15countriesshowninTable1wasreducedsignificantlyto596million
from1,493millionin1990to897inthemid2000s.Almostallofthereductiontookplaceinjustafew
countriesofwhichChinarepresented79.5percentandIndonesia11.4percent.Inothercountriessuch
asCambodia,IndiatheLaoPeoplesDemocraticRepublicandthePhilippinesthecutsinpovertyrates
were insufficient to reduce the total number of poor. India had 28 million more poor in 2005 than in
1988,accordingtoESCAP(UN).
As regards poverty status in Pakistan, no unidirectional movement of head count ratio has been
observed. The HCR ratio of 30.6 percent in 199899, increased to 34.5 percent in 200001, before
decliningto23.9percentand22.3percentduring200405and200506.
Inaglobalperspective,thereductioninemploymentandincomeopportunitiessince2007hasledtoa
considerable slowdown in the progress towards poverty reduction and the fight against hunger.
EstimatesbytheDepartmentofEconomicandSocialAffairsoftheUnitedNationssuggestthat,in2009,
between 47 and 84 million more people have remained poor or will have fallen into poverty in
developingcountriesandeconomiesintransitionthanwouldhavebeenthecasehadprecrisisgrowth
continueditscourse.ThissetbackwasfeltpredominantlyinEastandSouthAsia,wherebetween29and
63millionpeoplewerelikelyaffectedofwhomabouttwothirdswereinIndia.(Source:WorldEconomic
Situation & prospects 2010, UN). By these estimates, the crisis has trapped about 15 million more
people in extreme poverty in Africa and almost 4 million in Latin America and the Caribbean. In the
outlookfor2010,theeconomicrecoveryisexpectedtoencouragearesumptionofthedecliningtrend
inglobalpovertyintheyearspriortothecrisis.Nonethelessasgrowthinincomepercapitaisexpected
tofallwellshortofprecrisislevels,povertyreductionwillstillbesignificantlylessthanitwouldhave
beenunderprecrisistrends.
CertainDevelopmentswithRelevancetoIncidenceofPoverty
After a high growth rate of 6.8 percent in 200607, Pakistan has experienced a declining rate of
economicgrowth,during200708and200809(3.7%and1.2%respectively).However,therehasbeen
anincreaseto4.1percentin200910.Asmaybeseen,thegrowthratedeclined,giventheinternational
economiccrisisduring200809althoughitwasnotnegativeasincaseofsomeothercountries.
Inflation which was declining over 200405 to 200607, started increasing since 200708 and touched
the peak of 20.77 percent in 200809 in line with the world inflation trend. Inflation has subsided in
200910 but is showing an upward trend of recent. Food inflation which has immediate impact on
poverty, increased to 23.7 percent in 200809, but declined to 12 percent in 200910. However, it is
showinganupwardtrendofrecent.
Unemploymentratedecreasedto5.2percentin200708from6.2percentin200607.Howeverithas
increasedto5.5percentduring200809.Agriculturesector,thelargestsourceofemployment(45.1%)
althoughimprovedintermsofgrowthin200809isprojectedtowitnessalowergrowthratein200910
i.e. 2.0 percent. On the other hand, the Services sector, the second largest job provider (34.5%) and
havingthehighestemploymentelasticity,isexpectedtogrowat4.56percentin200910comparedwith
1.58percentin200809.
129
In spite of world economic crisis, job loss for Pakistani emigrants, among others in countries of
destination,andworldforecastforlowerworkersremittances,workersremittancesincaseofPakistan
areshowingarobustupwardtrend;estimatedat$5.3billionin200708,$6.4billionin200809and$7.3
billionduring200910(JulyApril).
A major factor in operation over the past two years which could have possibly mitigated pressure on
povertyhasbeenthesubstantialincreaseinsupportpricesofwheat,thelargeststaplefoodcrop,which
wereraisedtoRs950/40KgfromRs625/40KginSeptember2008.Primafacie,theincreaseinsupport
prices in conjunction with a much larger commodity procurement program run by the government
(underwhich9.2milliontonsofwheatwasprocuredin200809)hasledtoasubstantialcashinjection
intotheruraleconomy.
Ontheflipside,however,therearemoreconsumersthanproducers,andtheincometransfersto
the rural economy come at the expense of the urban population. While the Benazir Income Support
Programme (BISP) caters to the needs of the poorest of the poor of the society in terms of cash
assistance for day to day subsistence, it is targeted primarily towards rural areas. There is anecdotal
evidence that the ranks of the vulnerable in urban areas is increasing, especially in the lowincome
category.Tothisextent,abettertargetingorwidercoveragemaybeneeded.
Forthecurrentfinancialyear,anamountofRs.70billionwasallocated,totarget5millionvulnerable
families.ExpendituresamountingtoRs.17.8billionwereincurreduptillMarch,2010.InFY2008/09,a
totalofRs.14billionwasdisbursedto1.76millionbeneficiariesintheshapeofacashgrantofRs1000
permonth.
Box1:NewInternationalPovertyLine
Thedollaradaypovertylinehasitsrootsinthepurchasingpowerparity(PPP)exchangeratesgeneratedbythe
InternationalComparisonProgramproject,undertakenjointlybytheUnitedNationsStatisticsDivision,theWorld
Bank and the University of Pennsylvania. The PPPs were used first to construct an average poverty line for a
groupofcountriesforwhichtheInternationalComparisonprogrammeprovidedinformationandthentoconvert
this common line into national currencies in order to estimate the incidence of poverty using national
distributional data. The Programme has produced three rounds of estimates; in 1985, when the programme
covered 22 countries, with a poverty line of $1 per person per day; in 200020001, when the estimates were
revisedusingthePPPexchangeratesoftheprograms1993roundwithapovertylineof$1.08perpersonperday;
andin2005;whentheprogrammeproducednewestimatesusingits2005PPPs,withthepovertylineraisedto
$1.25perpersonperday.Eachsubsequentroundleadstoareestimationoftheincidenceofpoverty.
The potential strength of the monetary povertyline approach, entailing, for example, the dollaraday line, is
considerable;itdefinesabsolutepovertyinasimplemannerwhichisintuitivelyattractiveandseemstoprovidea
universally applicable definition for making comparisons among countries crosssectionally as well as (for single
countries)intertemporally.
GrowthPovertyNexus
Both the global crisis and deteriorating security situation in South & SouthWest Asia countries saw
economicgrowthcomeunderpressurein2009deceleratingto2.9percentascomparedto4.7percent
in 2008 (Table9.2). Barring Afghanistan, a country highly dependent on foreign aid, India achieved
130
Poverty
highest growth rate at 7.2 percent in 2009. Growth contracted in only two countries, Maldives and
Turkey.
Table9.2:RateofeconomicgrowthandinflationinSouthandSouthWestAsianeconomies,2008to2010
(Percentage)
RealGDPGrowth
Inflation
2010
2010
2008
2009
2008
2009
(Projection)
(Projection)
SouthandSouthWestAsia
4.7
2.9
6.1
11.5
11.2
8.4
Afghanistan
3.4
15.1
7.6
26.8
10.0
8.4
Bangladesh
6.2
5.9
6.0
9.9
6.7
6.0
Bhutan
5.0
5.7
6.6
6.3
7.2
8.4
India
6.7
7.2
8.3
9.1
11.9
7.5
3.3
2.0
5.0
25.5
16.0
15.0
Maldives
5.8
2.6
2.1
12.3
8.5
6.0
Nepal
5.3
4.7
3.5
7.7
13.2
7.5
Pakistan
3.7
1.2
4.1
12.0
20.8
9.0
SriLanka
6.0
3.5
6.0
22.6
3.4
8.6
Turkey
0.9
6.0
3.0
10.4
6.3
7.2
Source:EconomicandsocialsurveyofAsiaandthePacific2010(ESCAP,UN)
GDPGrowth,EmploymentandPovertyHeadcountRatio
Productiveemploymentistheeconomicfoundationofdecentwork.Increasedfocusonthegeneration
of decent work opportunities is central to achieving the goals established by the United Nations
MillenniumSummit.Accesstoproductive.Workthatprovidesanadequateincomeforworkingmenand
womenandisthesurestrouteoutofpoverty.AsshowninTable9.3thereexistsanegativecorrelation
betweenGDPgrowthrate,andpovertyheadcountandapositivecorrelationbetweenunemployment
andpovertyheadcountratio.
Table9.3:GDPGrowthRate
199899 200001 200304 200405 200506 200607 200708 200809 200910 201011 201415
World
4.9
4.5
5.1
5.2
3.0
0.6
4.2
4.3
4.6
SouthAsia
8.5
5.7
5.7
6.9
7.4
Pakistan
4.2
2.0
7.5
9.0
5.8
6.8
3.7
1.2
4.1
UnemploymentRate
World
6.3
6.2
6.0
5.7
6.0
6.1
SouthAsia
5.3
5.4
5.3
5.3
5.4
5.4
Pakistan
6.1
6.0
8.3
7.7
7.6
6.2
5.2
5.5
PovertyHeadCountRatio
SouthAsia 38.42
(2001
40.3
02)
Pakistan
30.6
34.5
23.9
22.3
22.8*
*:29.3%targettoreduceHCRof58.5%,livingonlessthan$1.25perdayin1990toreducepovertytohalfof1990
asperMDGs.
Note: In20056,Pakistanhadachievedthe2015targetofhalvingpovertyusing1990(58.5)asthebaseline
Source: (i) World economic outlook 2010. IMF (ii) global employment trends 2009 ILO (iii) Pakistan National
Accounts2010(iv)Pakistanlabourforcesurvey200809(v)Rethinkingpoverty,reportontheworldsocialsituation
2010UN(vi)PakistanEconomicSurvey.
131
Acceleratingeconomicgrowthisnecessarybutnotsufficient
Accelerating economic growth is necessary but not sufficient to bring down poverty levels. As past
experienceinthecaseofPakistanandothercountrieshasrepeatedlysuggested,periodsofhighgrowth
that have occurred at the expense of macroeconomic stability do not tend to produce the desired
outcomeswithregardstopovertyreductioninasustainablemanner.
The challenge is, as always, how to make growth more inclusive by spreading its benefits to large
segmentsofthepopulation.Theallocationofmoreresourcesfortheprovisionofbasicservicessuchas
education,healthsanitation,andhousingparticularlyforthosebelongingtolowerincomegroups,and
targeted programmes for the benefit of the poor in the broader framework of social protection, as is
beingdoneoverthepasttwoyears,remaincriticaldriversoflongrunreductionsinpoverty.
WorldEconomicGrowthProspects
Whiletheworldeconomicsituationhasbeenimprovingsincethepastsixmonths,theglobaleconomic
recovery is expected to remain sluggish, while unemployment rates are expected to stay high.
Developing countries, especially those in Asia, are expected to show the strongest recovery in 2010.
Nonetheless,growthisexpectedtoremainwellbelowpotentialandtheprecrisislevelsofperformance
inthedevelopingworld.Asaconsequence,itwilltakemoretimeandgreatereffortstomakeupforthe
significantsetbacksintheprogresstowardspovertyreductionandthefightagainsthunger,aswellas
the other Millennium Development Goals. The crisis has impacted severely, on lowincome countries
and the most vulnerable. Even given the signs of economic recovery, many are still facing declines in
household incomes, rising unemployment and the effects of dwindling government revenue on social
services.Wheretheseadverseimpactscannotbecounteredbecauseofweaksocialsafetynetsandlack
of fiscal space to protect social spending and promote job creation there is a high risk of longlasting
setbackstohumandevelopment.
InflationBehaviourandProspects
Justasthesharpriseinfoodandfuelpricesgeneratedarapidaccelerationofheadlineinflationinboth
high income and developing countries during 2008, and the unprecedented slowdown in the global
economy witnessed a mixed trend of inflation during 200809. The median rate of yearoveryear
consumer price inflation in high income countries, which peaked at 5.2 percent in mid 2008, turned
negative in July, but was 0.6 percent in November 2009. The median inflation rate in developing
countrieshasdeclinedfromapeakof12.4percentinmid2008toonly2.6percent.Notwithstandingthe
declinesinheadlineinflation,coreinflationhasremainedrelativelystableinhighincomecountries.
Inflation developments have changed drastically among middle and lowincome countries. Median
inflationinlowincomecountriespeakedat15.4percentinthemiddleof2008,butasofOctober2009it
was1.2percentwellbelowthelevelsobservedbeforethefoodandfuelboom.However,foodinflation
indevelopingcountrieshasnotbeenfallingasrapidlyasoverallpricesinthetwothirdsofdeveloping
countries for which data are available through May 2009. As a result, by the end of May 2009, food
pricesindevelopingcountrieshadrisenabout8percentfasterthannonfoodprices,whencompared
with January 2003. This suggests that the poor in these countries may not be benefiting from lower
international food prices to the same degree as the poor in richer countries and that a significant
portionofthe130millionpushedintoextremepovertyduringthefoodpricespikemaynothaveexited
povertyasmighthavebeenexpectedgiventhefallininternationalfoodprices.
132
Poverty
Table9.4:SummaryofInflation
Average
2002 2003
1992
2001
Advance
2.5
2.3
2.1
Economies
Emerging
and
Developing
8.5
3.6
4.4
Economies
Projections
2004
2005 2006
2007
2008
2009
2010
2011
2015
2.0
2.1
2.2
2.1
3.8
0.8
1.6
1.7
2.0
4.5
6.0
6.1
6.5
10.3
3.9
4.9
4.6
4.0
Source:WorldEconomicOutlookApril2010(IMF)
Table9.5:PakistanInflationProfile
200910
200102 200203 200304 200405 200506 200607 200708 200809
JulApr
1.GeneralCPI
3.54
3.10
4.57
9.28
7.92
7.77
12.0
20.77
11.49
(i)Food
2.50
2.83
6.01
12.49
6.92
10.28
17.64
23.70
12.03
2.SPI
3.37
3.58
6.83
11.55
7.02
10.82
16.81
23.41
12.96
Source;EconomicAdvisersWing,FinanceDivision
Fooditemweightageintheconsumerbasket(CPI)=40.34%
Fooditemweightageintheconsumerbasket(SPI)=about70%
Table9.6:FoodWeightsinCPI
Economy
China,PeoplesRep.of
HongKong,China
India
Indonesia
Korea,Repof
Share(%)
33.20
26.94
57.00
42.30
14.00
Economy
Malaysia
Philippines
Singapore
Taipei,China
Thailand
Pakistan
Share(%)
30.0
46.58
23.38
25.00
32.71
40.34
Source:ADB
Impactofriseinfoodpricesonpoverty
Theriseinfoodpricesisworrisomepreciselybecausefoodpriceinflationisthemostaggressiveofall
taxesithurtsthepoorthemost.Theeffectsofrisingfoodpriceswilldifferacrosshouseholds.There
will be some households that may benefit from higher prices; there may be households that are
adverselyaffected.Risingfoodpricesmayleadtoincomegainsfornetproducerswhoareinruralareas.
Thefoodpriceincreaseshouldcontributetohigherincomesforthesenetsurplusproducers.However,
to the extent that net surplus producers tend to be the relatively welloff, rising food prices may be
expectedtoadverselyaffecteventheruralpoor.Certainlytheurbanpoor,whoarefoodconsumersand
unlikelytobefoodproducers,canbeexpectedtosuffermorefromrisingfoodprices.
Inthiscontext,itisimportanttoexaminehowdifferentgroupswillbeaffectedbyrisingfoodprices.Itis
alsoimportanttoinvestigatewhatwouldbethenetimpactoffoodpriceincreasesonpoverty.Concerns
over high prices are mounting because inflation eats into real incomes and expenditures and can
undermine the gains from poverty reduction and human development that developing counties have
133
achievedoverthelastdecadeorso.
Inordertogainasenseofthevaryingimpactofincreasesinfoodpricesondifferentsubgroupsofthe
population, food expenditure shares by income quintile are examined in table below in case of
Bangladesh, India, Indonesia and Philippines which may serve as a fair proxy for Pakistan (Table9.7).
Theaverageshareoffoodintotalexpenditureisinverselyrelatedtoincomeacrossquintilegroups,as
seenfromhouseholdexpendituresurveydatafromBangladesh,India,Indonesia,andPhilippines.Itis
perfectly clear that poorer population subgroups spend a larger share of their total expenditures on
foodthanricherones.Ineachofthefourcountries,aclearmajorityoftheexpenditureofthepoorest
20% is on food. In contrast, the share of food in total expenditure tends to be around 25 percentage
points less for the richest 20%. As a result, the poorer population subgroups are more vulnerable to
risingfoodprices
Table9.7:Shareoffoodexpendituretototalexpenditure(percent)
Quintile
Bangladesh
India
Indonesia
Philippines
st
1
69.3
62.0
63.3
64.6
2nd
66.9
59.4
58.1
59.2
3rd
63.2
56.2
54.1
54.1
4th
58.7
50.8
49.0
47.7
5th
45.2
36.4
37.9
36.4
Source:SpecialReportFood,PricesandInflationindevelopingAsia(ADB).April2008
To the extent that some households produce (and consume) their own food, they will tend to be
relatively shielded from increases in food prices. In fact, those with a marketable surplus may even
benefit. Nevertheless, the household expenditure survey data used here suggest that for all quintile
groups in all four countries, a majority of food consumption is purchased. In the case of rice, for
example,typicallyanaverageofaround70%ormoreoftotalriceexpendituresispurchasedinanygiven
quintile group in rural areas. A smaller percentage is purchased for some quintile groups in rural
Bangladesh(alittlelesthan60%).However,thisisforthetoptwoquintiles.
EmploymentPovertyScenario
As a stylized fact, strong positive correlation exist between employment generation and poverty
reduction. Increasing opportunities for decent work is central to shaping an enabling environment for
the achievement of the goals of the Millennium Declaration. This will entail crucial choices about the
patternofdevelopment.Dialogue,involvingtradeunions,employersorganizationsandothers,isvital
to finding the right balance of policies for employment creation, productivity growth, and poverty
reduction.
GlobalProspects
Labour market will remain weak in the outlook. The experience of previous recessions shows that
employmentrecoverytypicallylagsoutputgrowthbyasignificantmargin.Duringthelasttworecessions
intheUnitedStates(in1991and2001),forinstance,outputstartedtorecoveraftereightmonths,while
it took 30 and 48 months, respectively, before unemployment rates were back to precrisis levels.
Recoveryfromthepresentcrisishasonlyjustbegunandlargeoutputgapsremaincharacteristicofthe
situation in most major economies. This will slow new hiring until output growth has become more
robust.
134
Poverty
Labour market conditions in developing countries are expected to remain difficult in the outlook for
threemainreasons.Firstmostofthe47millionnewworkerswhoenterlabourmarketsworldwideeach
yearwillbesearchingforjobsindevelopingcountries.InAsiaaloneforincreaseanestimated51million
additional jobs will need to be created to absorb that regions growing labour force during 2010 and
2011.
Second, as in developed countries, employment creation in developing countries is expected to lag
outputrecovery.
Third,theshifttoinformalsectorjobsduringthecrisiswilllikelybelonglastingformanyworkers.This
addsconsiderablepressureonearningsforthoseinvulnerableemploymentandwillkeepthelevelof
workingpovertyhigh,especiallyinruralareaswherejobopportunitiesarealreadyscarce.Inaddition,
ontopofvulnerableemployment,associalprotectioncoverageisrelativelylimitedandworkingpoverty
levelswillincrease.Thiswillbedifficulttoreverseasobservedinpreviouscrises.
AsregardsPakistan,whereaslabourforceemployedinagricultureandindustryincreasedinpercentage
terms it has decreased in the services sector in the year 200809 over the year 200708. This is a
significantdevelopmentintheemploymentperspective;giventhehighestemploymentelasticityinthe
services sector. However, the Services sector has recovered to a growth rate of 4.56%. Share of
agriculture, industry and services sector in Pakistan was 44.6% 20.1% and 35.3% during 200708
comparedwiththerespective
PRSPIIProfileofPropoorExpenditure
PRSPpropoorexpendituresarereportedregularlyunderfivebroadcategoriesi.e.i)MarketAccessand
Community Services; ii) Human Development; iii) Rural Development; iv) Safety Nets; and v)
Governance.Thesefivecategoriescover17propoorsectorsfortrackingofbudgetaryexpenditures.
ProPoor spending is significantly rising over recent years; from 3.77 percent of GDP in FY 200102 to
7.46 percent of GDP in FY 200809 which remained well above the projected expenditure of Rs.760
billion for the year. Aggregate propoor spending for the first nine months of current financial year
200910 amounts to Rs. 651.2 billion which has increased from Rs. 618.0 billion in the corresponding
periodofthepreviousfinancialyear200809,showinganuptrendof5.4percent(Table8).Anamount
ofRs860.0billionwasprojectedtobespentinFY2009/10whichwouldbe6.01percentofGDP.Actual
expenditureduringJulyMarchFY200910represents75percentoftheprojectedpropoorexpenditure
forthewholeFY200910andrepresents4.3percentofestimatedGDPforthecurrentfinancialyear.
An upward trend is observed in the expenditures of three categories, Human Development (17.0
percent), Rural Development (14.49 percent) and Governance (45.62 percent) between FY 200809
(JulyMarch) and FY 200910 (JulyMarch). An amount of Rs. 234.6 billion was incurred on Human
DevelopmentduringJulyMarch,200910ascomparedtoRs.200.5billioninthecorrespondingperiod
ofpreviousfinancialyear.InHumanDevelopment,allthreesectors,Education,HealthandPopulation
Planning registered growth, with Health representing the maximum YoY increase of 27.6 percent
followedbyEducationexpendituredepictingaYoYincreaseof14.12percent.
ArecurringpatternistheriseinexpenditurerelatedtoGovernance,fromRs.104.7billionduringJuly
March200910relativetoRs.71.9billionduringthesameperiodofFY200809,largelyattributableto
increaseinLaw&Orderexpenditureexplainedbytheinternalconflictandmilitancycompellinghigher
outlaysonpublicsafetyandsecurity.
135
SafetyNetshowsasignificantYoYdecrease,18.28percentwhichismostly concentratedinSubsidies,
showing26.96percentYoYdecrease.WithinSafetyNet,inFY200910,SocialSecurity&Welfarerecord
animpressivegrowthof56.6percentoverthecorrespondingperiodofpreviousyear.Expenditureon
SafetyNetmoveddownfromRs.203.5billioninFY200809(JulyMarch)toRs.166.3billioninFY2009
10(JulyMarch)whileonSocialSecurity&Welfare,itincreasedfromRs.17.3billioninFY20089to27.1
billioninFY200910.ConsistentdeclineintheoutlaysonSubsidiesreflectashiftinresourcestowards
programmes comprising Social Security and Welfare. Under the IMF Stand By Arrangement in place
sinceNovember2008,theGovernmentofPakistaniscommittedtograduallyreplacethesubsidieswith
directandtargetedassistancetothepoorandneedy.
Table9.8:SocialSectorandPovertyRelatedExpenditures
Sectors
01/02
02/03
03/04
04/05
Actual
Actual
Actual Actual
05/06
Actual
06/07
Actual
07/08
Actual
08/09
Actual
0809
(Jul
Mar)
Actual
Rs.InBillion
09/10
(Jul
09/10
Mar)
Projected
Actual
I. Market Access and

11
16.6
28.5
41.7
63.6
76.6
104.5
121.8
60
51.7
70.2
CommunityServices
i. Roads, Highways &
6.3
13.1
22.7
35.2
53.2
60
85
99.6
48.6
38.8
59.2
Bridges
ii. Water Supply &
4.6
3.4
5.8
6.5
10.3
16.6
19.5
22.2
11.4
12.9
11.0
Sanitation/Environment
II.HumanDevelopment
86.8
103.9
129.4
152.9
191.1
222.3
256.8
329.4
200.5
234.6
327.2
iii.Education
66.3
78.4
97.7
116.9
141.7
162.1
187.7
240.4
153.6
175.3
260.6
iv.Health
19.2
22.4
27
31.4
39.2
53.2
62.4
83.7
43.1
55.0
62.1
v.PopulationPlanning
1.3
3.1
4.7
4.6
10.2
7
6.7
5.3
3.8
4.3
4.5
III.RuralDevelopment
24.3
34.2
44.6
59.7
78.5
101.8
151.5
136
82.1
94
140.5
vi.Agriculture*
10.1
15.5
22.5
37.9
59.8
74.8
122.9
88.9
49.3
53.5
109.6
vii.LandReclamation
1.9
1.8
2
2.1
2.7
2.3
3.1
2.7
1.5
1.3
3.2
viii.RuralDevelopment
12.3
16.9
18.6
15.4
15
22.2
22.8
16.4
6.3
10.7
11.3
ix.
Peoples
Works
0
0
1.4
4.4
1
2.5
2.7
28
25
28.5
16,418
ProgrammeII**
IV.SafetyNets
11
15.4
17
11.4
36.1
18.8
435.2
276.1
203.5
166.3
271.6
x.Subsidies***
4.3
10.9
8.5
5.4
6
5.5
398.5
220.6
175.8
128.4
178.3
xi. Social Security &
3.7
1.3
4.1
2
7.6
4.5
22.5
29.1
17.3
27.1
73.5
Welfare
xii.
Food
Support
2
2
2.8
2.7
3.1
3.5
4.3
12.4
3.5
0
11.8
Programme
xiii. Peoples Works
0.8
0.8
0.6
0.08
0
0.02
1.9
3.3
1.7
2.5
2.9
ProgrammeI****
xiv.NaturalCalamities&
0.2
0.4
0.5
0.9
19.1
5
7.4
10
4.9
7.5
3.5
Disasters
xv.LowCostHousing
0
0.01
0.4
0.3
0.3
0.3
0.6
0.6
0.3
0.77
1.5
V.Governance
33
39
41.8
50.5
6.8
7.2
94
113.9
71.9
104.7
50.5
xvi.Law&Order
31
36.7
39.4
47.4
1.1
2.1
88
104.7
66
97.6
43.7
xvii.
Justice
2
2.2
2.4
3.1
5.6
5.1
6
9.2
5.9
7.1
6.8
Administration
Total
166.1
209
261.3
316.2
376.1
426.7
1042
977.2
618
651.2
860.0
As%ofGDP
3.77
4.33
4.63
4.81
4.93
4.89
9.7
7.46
5.7
4.3
6.01
*AgriculturesectorhasbeenincludedfortrackingPRSPexpendituresinsteadofirrigationwitheffectfromFY2008/09
**VillageelectrificationhasbeenreplacedwithPeopleWorksProgrammeIIinFY2008/09
***FoodsubsidyhasbeenrenamedassubsidywitheffectfromFY2008/09
****KhushalPakistanFundhasbeenrenamedasPeopleWorksProgrammeIfromFY2008/09
Source:FinanceDivision.
The proportionate shares of respective expenditure categories in ProPoor spending for FY 200910
illustrate a change from FY 200809 (Table 9.9). During JulyMarch, FY 200809, Safety Nets holds the
maximum percentage share, 32.93 percent, followed closely by Human Development, 32.44 percent.
RuralDevelopmentholdsthethirdlargestshare,13.28percent.
136
Poverty
Table9.9:PercentageshareinaggregateProPoorexpenditure
Actual
Sectors
2008/09
2009/10
(JulyMarch)
(JulyMarch)
I.MarketAccessandCommunityServices
60.0
51.8
II.HumanDevelopment
200.5
235.7
III.RuralDevelopment
82.1
94
IV.SafetyNets
203.5
158.37
V.Governance
71.9
104.7
Total
618.0
644.57
%share
2008/09
2009/10
(JulyMarch)
(JulyMarch)
9.71
7.94
32.44
36.02
13.28
14.43
32.93
25.53
11.63
16.08
100
100
Source:FinanceDivision
During nine months of current financial year, 200910, Human Development holds the maximum
proportionatesharei.e36.02percent,3.58percentpoints higherthanthe previousyear, followedby
Safety Nets, 25.53 percent, representing a decline of 7.4 percent points over the same period in
previous financial year. Shares of Governance i.e 16.08 percent and Rural Development i.e 14.43
percent,representanincreaseoverthepreviousfinancialyear.MarketAccessandCommunityService
holdsthesmallestsharecomparedtoothercategories,inboththeyears.
OtherInitiativestoAlleviatePoverty
(i)BenazirIncomeSupportProgramme(BISP)
BenazirIncomeSupportProgramme(BISP)caterstotheneedsofthepoorestofthepoorofthesociety
notonlyintermsofcashassistancefordaytodaysubsistencebutalsoenablingthemtoexitthevicious
cycle of poverty. An amount of Rs. 70 million was allocated for the current financial year, 200910 to
target5millionfamilies.ExpendituresamountingtoRs17.8billionwereincurreduptillMarch,2010.In
FY2008/09,atotalofRs.14billionwasdisbursedto1.76millionbeneficiariesintheshapeofthecash
grantofRs1000permonth.
Initially, the targeting of the beneficiaries was carried out through Federal and provincial
parliamentarians since there was no poverty data in the country. Since, there was an urgent need to
provide relief to the poor, it was decided by the Management board that the targeting may be done
through the Parliamentarians to identify beneficiary families. However, an inclusion and exclusion
criteria was devised, based on the information available with NADRA. The said criteria were used by
NADRAwhileprocessingtheBISPsapplicationformsrecommendedbytheparliamentarians.
Reformsofthetargetingprocess:povertysurveyaparadigmshift
Inpursuanceoftheinternationalbestpractices,itwasfeltthatamoreobjectivemethodoftargeting
thebeneficiaryfamiliesisneeded.Therefore,withthehelpofWorldBanktheGovernmenthasdecided
toreformthetargetingprocesstominimizetheinclusionandexclusionerrorsandgiveequalchanceto
each one for applying to the programme for benefits. The World Bank approved instrument named
PovertyScorecardbasedonProxyMeansTestingwhichhasbeenadoptedandanationwidePoverty
Survey was planned to identify the poor families. Hence beneficiary identification through
Parliamentarianswasstoppedon30thofApril2009.Inthiscontext,atestphaseofthesurvey,financed
by GoP has already been conducted in sixteen districts in four provinces and AJK/GB. The survey is
carriedouthousetohousethusprovidinganequalopportunitytoalltoapplyfortheBISPsbenefits.
Thequestionnaire,whichincludesquestionsaboutthehouseholdmembers,householdcharacteristics
andassets,isusedtodeterminetheirpovertystatus.Dataentryofthe15surveyeddistrictshasbeen
137
completed and a cutoff score has been decided by the BISP Management Board at 16.17. All those
falling at or below the cut off point will be paid BISP benefits. Approximately 600,000 beneficiary
familieshavebeenidentifiedduringthePilotPhaseoftheSurveyinthefifteenDistricts.Suchpresent
beneficiariesinthesedistrictswhofallbelowthecutoffscorewillcontinuetobeBISPbeneficiaries,but
othershavebeeneliminated.
A nationwide survey is targeted to be launched by June 2010 with the financial support of the World
Bank.Requestforproposals(RFPs)havebeenissuedtoshortlistedsurveyfirms.Howeverinviewofthe
fact that GOP is implementing a AghazeHuqooq Balochistan, it has been decided to complete the
survey in the Balochistan by 31st May 2010. Population Census Organization has been entrusted the
task.ForthePovertySurvey,thewholecountry,exceptBalochsitan,hasbeendividedintofiveclusters
namely;UpperPunjab&AJK,SouthernPunjab,Sindh,KhyberPukhtunkhwa&GilgitBaltistan&FATA.
The clusters have been offered for competitive biding to conduct the survey. Five firms, one for each
cluster, are being hired following Quality and Cost Selection (QCBS) method. During the targeting
process, number of evaluation activities will be carried out ensuring therein that participating
OrganizationshavefollowedtheprocessoutlinedintheTargetingManualoftheBISP.Tocarryoutthe
evaluationprocesses,quantitativeandqualitativeassessmentswillbemadethroughhiringofseparate
firmsforboththeexercises.
(a)EmergencyReliefPackages
BISPisalsoimplementinganEmergencyReliefPackageforInternallyDisplacedPersons(IDPs)ofFATA,
SwatandearthquakeaffecteesofBalochistan.AtotalofRs.28billionhasbeenpaidto3,965families
from FATA and Bajaur and Rs. 34 billion has been paid to 3,729 earthquake affected families in
Balochistan.
(b)TheRightsSource(WaseelaeHaq)Initiative
BISP also initiated "WaseelaeHaq" programme for providing the poor an opportunity of self
employment. One beneficiary has been selected out of the each sub group through a computerized
drawforawardofacashloanofRs.300,000/.Thisonetimeloanisconditionalandthebeneficiarywill
havetospenditforsomeincomegeneratingpurpose.Sixdrawshavebeenheldsofar.Asaresult,4,526
beneficiarieshavebeenpreselectedduringthesedrawsandthosefallingbelowthecutoffscorewillbe
eligiblefortheloan.Inthisregardimplementationincaseof20beneficiarieswasstartedinApril,2010.
(c)VocationalTrainingProduct
In order to transform the poor segment of society from depending upon the governments monthly
financialassistancetoselfreliance,onememberfromeachqualifyinghouseholdwillbeequippedwith
technical and vocational skills making them the earning hands. The second phase of the skill
development programme will be provision of microfinance for poor families to help them run small
businesses.
(d)HealthInsurance
Healthinsuranceisalsoamajorcomponentofthisprogrammeandwillcovertheentirefamilyincluding
householdheadandspouse,childrenupto18years,dependentparents,andunmarrieddaughtersaged
18 and above. The policy benefit will cover full hospitalization, pregnancy, daycare treatment and
diagnostictests.Thisinsurancepolicywillalsoprovideaccidentcompensationforearningmembersof
thefamily.Forthis,consultationswithdifferentministriesandprovincialgovernmentsareinprocess.
138
Poverty
(ii)PeoplesWorksProgramme(PWP)I&II
Peoples Works ProgrammeI & II cover small development schemes for provision of electricity, gas,
farm to market roads, telephone, education, health, water supply, sanitation and bulldozers hours
facilitiestotheruralpoor.BudgetallocatedforFY2009/10stoodatRs35.0billionoutofwhichRs31.
billion has been utilized during JulyMarch, FY 2009/10 compared to an expenditure of Rs.26.8 billion
duringthesameperiodinFY200809,reflectingaYoYincreaseof15.7percent.UptillMarch,2010,904
schemeswereapprovedunderPWPI,withthehighestnumberofschemesunderRoadi.e.320followed
by272schemesrelatedtoWaterSupplyand209electrificationschemes.
(iii)PakistanBaitulMal(PBM)
Pakistan BaitulMal (PBM) disburses to the destitute, needy, widows, orphans, invalids and infirm
irrespectiveoftheirgender,caste,creedorrace.PBMprovidesassistanceunderdifferentprogrammes
andschemessuchasFoodSupportProgramme(FSP),IndividualFinancialAssistance(IFA),Institutional
Rehabilitation through Civil Society Wing (CSW), National Center for Rehabilitation of Child Labour
(NCRCL),VocationalTrainingInstitutes/DastkariSchools(VTIs).
PBM disbursed an amount of Rs. 1.65 billion during JulyMarch FY 200910 relative to Rs. 2.7 billion
incurredinthecorrespondingperiodofFY200809,markingadecreaseof38.9percent.Thisreflectsa
decline in number of beneficiaries by 22.8 percent from 1,437,569 during JulyMarch FY 200809 to
1,110,264overthesameperiodinthecurrentfinancialyear.Thedeclineindisbursementsandnumber
ofbeneficiariesiscausedbythemergerofFoodSupportScheme,amajorcomponentofPakistanBait
ulMalintoBenazirIncomeSupportProgrammesinceFY200809.
(iv)EmployeesOldAgeBenefitsInstitution(EOBI)
Employees Old Age Benefits Institution (EOBI) provides monetary benefits to the old age workers
throughdifferentprogrammesincludingOldAgePension,InvalidityPension,SurvivorsPensionandOld
AgeGrants.DuringthefirsthalfofFY200910,EOBIdisbursedanamountofRs.3.2billioncomparedto
Rs. 2.7 billion over the same period in the previous financial year, representing YoY increase of 16
percent.Numberofbeneficiariesuptillthirdquarterofcurrentfinancialyearincreasedto590,246from
549,449duringthesameperiodinthepreviousfinancialyear,showinganupwardtrendof7.42percent.
DuringJulyMarch,FY200910,about65percentofthetotalamountwasdistributedthroughOldAge
Pension,33.16percentthroughSurvivorsPension,1.49throughInvalidityPensionand.29throughOld
AgeGrants.
(v)Zakat
ZakatprovidesfinancialassistancesuchasGuzaraAllowance,EducationalStipends,HealthCare,Social
Welfare/rehabilitation,Eidgrants,andMarriageassistancethroughRegularZakatProgrammeandother
ZakatProgrammeandNationalLevelSchemes.AtotalofRs.768.7millionwasdisbursedunderdifferent
programmesofZakatduringJulyMarchFY200910ascomparedtoRs.1,421millionduringthesame
period,FY2008/09registeringadecreaseof46percent.Numberofbeneficiariesrecordedadecreaseof
25percent,from538,050duringJulyMarchinthepreviousfinancialyearto404,124inthesameperiod
ofcurrentfinancialyear.
OfthetotalZakatdisbursements,52.7percentwasdisbursedunderRegularZakatProgrammes,17.25
percent under Other Zakat Programmes and 30 percent under National Level Schemes during July
March,FY200910.
139
(vi)Microfinance
Microfinance is recognized as an effective tool to pull the poor and vulnerable out of poverty and
vulnerability. It enables the poor to enhance their income earning capacity and empower them,
especially women. Microfinance comprises Microcredit, Microsavings and MicroInsurance. It is
provided as package through Microfinance Banks (MFBs), Microfinance Institutions (MFIs), Rural
Support Programmes (RSPs), and Others including Commercial Financial Institutions (CFIs) and Non
government Organizations (NGOs). Credit disbursements under Microcredit, amounting to Rs 21.7
billion were made during JulyDecember, FY 200910 as compared to Rs 18.7 billion during the same
period,FY200809showinganimprovementof16.04percent.Numberofactiveborrowersincreasedby
5.38 percent during JulyDecember, FY200910, from 1,732,879 number of beneficiaries up till second
quarterofpreviousfinancialyearto1,826,045numberofbeneficiariesduringthecorrespondingperiod
ofthecurrentfinancialyear.
MicroSavingsand MicroInsurancecomponentsof Microfinancedepictgrowthintermsof numberof
active savers and policy holders. MicroSavings recorded an increase of 58.8 percent during July
December FY 200910 over the same period in the previous financial year. This translates into an
increaseof34.8percentinthenumberofactivesavers.MicroInsuranceregisteredaYoYincreaseof
47.52percentinthenumberofactivepolicyholderswhilethevalueofsuminsuredhasmovedupfrom
Rs.34,340duringJulyDecemberFY200809toRs.43,539millionduringJulyDecemberofthecurrent
financialyear.
Povertyinequalityhouseholdconsumption
Risinginequalitycanadverselyaffectthespeedofpovertyreductionwithgrowth.Table9.10showsthat
the Gini coefficient increased between 1990 and the mid2000s in 9 of 15 countries examined, the
increasewashigherinurbanthaninruralareas.Table10showsthatinallbutthreecountriestherate
of GDP growth exceeded the rate of growth of per capita household consumption during the period
considered. The three exceptions were the Philippines where both grew at the same rate and urban
IndonesiaandPakistanwhereaveragehouseholdconsumptiongrewfasterthanpercapitaGDP.Onthe
other handtherateofgrowthof household consumptionwas zeroornegativeinthree countries the
IslamicRepublicofIran,KazakhstanandtheRussianFederation.
Table9.10:Inequalityandhouseholdconsumptiongrowthbetween1990andthemid2000s
Country
GiniCoefficient(%)
AverageAnnualGrowth
Counterfactualadditionalpoverty
Rate(%)
reduction(inmillion)
Initial
Final
Household
GDPper
Nochangein
Household
consumptio
capita
inequality
consumptiongrew
npercapita
atanadditional
1%peryear
Bangladesh
26.2
31.0
2.2
3.2
6.5
9.5
Cambodia
38.3
41.9
1.9
5.2
0.4
0.7
China(rural)
30.6
35.9
5.1
9.1
36.3
54.5
China(urban)
25.6
34.8
7.0
9.1
9.1
India(rural)
30.1
30.5
0.9
4.0
2.3
66.3
India(urban)
35.6
37.6
1.2
5.8
26.6
Indonesia(rural)
27.7
29.5
3.3
3.4
1.8
0.0
Indonesia(urban)
32.8
39.9
4.6
6.6
0.0
Iran
43.6
38.3
0.2
2.9
3.3
1.0
(IslamicRepublicof)
140
Poverty
Table9.10:Inequalityandhouseholdconsumptiongrowthbetween1990andthemid2000s
Country
GiniCoefficient(%)
AverageAnnualGrowth
Counterfactualadditionalpoverty
Rate(%)
reduction(inmillion)
Initial
Final
Household
GDPper
Nochangein
Household
consumptio
capita
inequality
consumptiongrew
npercapita
atanadditional
1%peryear
Kazakhstan
35.3
33.9
0.3
6.9
0.2
0.5
LaoPeoples
30.4
32.6
1.7
3.9
0.1
0.3
DemocraticRepublic
Pakistan
33.2
31.2
3.9
1.7
3.0
0.0
Philippines
40.6
44.0
1.6
1.6
2.6
0.0
RussianFederation
48.3
37.5
0.0
2.0
13.6
0.2
SriLanka
32.5
41.1
1.9
3.2
1.4
1.6
Thailand
43.8
42.5
3.7
4.4
0.8
0.0
Turkey
43.6
43.2
0.5
2.2
0.2
1.9
VietNam
35.7
37.8
5.7
6.0
1.6
0.0
Median
34.3
37.6
1.9
3.2
Weightedaverage
32.2
34.8
3.3
6.0
Total(15countries)
53.4
172.0
Source:Economic&SocialSurveyofAsia&Pacific2010ESCAP,UN.
AchievementofMDGoal1.Eradicateextremepoverty&hunger
Target: Halve between 1990 and 2015, the proportion of people whose income is less than
$1adayPakistancase.
Pakistan is committed to the achievement of interalia, MD goal 1: As shown in table below; poverty
reductionbasedonnationalpovertylinewasontrackupto200506andestimatedtobesohenceafter
upto200708.Prospectsforfurtherreductionwereshadowedbytheworldeconomiccrisisandasin
caseofmostworldeconomies;thespeedofpovertyreductionwouldhavebeenfasterintheabsenceof
theworldeconomiccrisis.
Table9.11:Goa1EradicateExtremePovertyandHunger PakistanCase
Indicators
Definition
Proportionof
Headcountindexbasedonthe
populationbelow officialpovertylineofRs673.54
thecaloriebased percapitapermonthin199899
foodplusnon
pricesconsistentwithattainment
foodpovertyline of2350caloriesperadult
equivalentperday
9091 200001 200405 200506
26.1
34.5
23.9
23.3
MTDF
Target
200910
MDG
Target
2015
21
13
Source:Planning&DevelopmentDivision
MDGoal1(Poverty&Hunger)inSouthAsianPerspective
South Asia is the developing subregion with the largest number of poor people: 43 percent of the
developing worlds i.e. 1.4 billion poor people live in South Asian countries. The absolute number of
peoplelivinginextremepovertyincreasedfrom548.3millionto595.6millionbetween1981and2005.
141
Ratesofpopulationgrowthinthesecountrieshaveremainedhighandhaveledtoanenlargementof
boththetotalpopulationaswellasthenumberslivinginextremepoverty.Inrecentyears,economic
growth has been relatively high in the three largest countries in the region, India, Bangladesh and
Pakistan,whichrecorded annualrates ofgrowthof GDPpercapitaabove5percentin200006.Asa
result, the subregion saw the proportion of those living in extreme poverty decline in relative terms,
fromahighof59percentin1981to40percentin2005.However,suchgrowthhasnotbeensufficiently
inclusiveandpropoortoreducetheabsolutenumberofpersonslivinginpoverty.Incomeinequalities
have grown steadily in India since the early 1980s, in both urban areas. The same pattern can be
observed in Bangladesh. South Asian countries have been unable to generate sufficient decent work
opportunitiestoliftworkingpoorpeopleoutofpoverty.
Theheadcountindexdeclinedinalmostallcountrieswithdataonincomepoverty,withtheexceptionof
Bangladesh, where the estimated proportion of people living below the $1.25 a day poverty line
increasedfrom44percentin1981to51percentin2005.InIndiaalone,thepovertyheadcountfellby
18 percentage points, from 60 percent in 1981 to 42 percent in 2005. Pakistan also experienced a
declineintheheadcountindexfrom73to23percentduringthesameperiod.Yet,Table12showsthat,
intermsofprogressinmeetingtheMillenniumDevelopmentGoaltargetofhalvingextremepovertyby
2015,severalcountriesintheregion,includingBangladesh,India,NepalandSriLankaandPakistanwill
needhigherratesofpovertyreductiontomeetthechallenge.
Table12:Proportionofthepopulationlivingonlessthan$1.25adayincountriesofSouthAsia,1981,1990and
2005,andthechangeneededtoreachthe2015target(percentage)
Annualrateof
Proportionliving
Change
change
onlessthan
neededto
neededto
$1.25aday
Annualrateof
achievethe
achievethe
2015
change
target
target
Country
1981
1990
2005
Target
(19902005)
(20052015)
(20052015)
Nepal
77
54.7
38.5
2.3
16.2
3.5
Bangladesh
44.2
49.9
50.5
24.9
0.1
25.6
7.1
India
59.8
51.3
41.6
25.7
1.4
15.9
4.8
Bhutan
47.4
51
26.8
25.5
4.3
1.3
0.5
Pakistan
72.9
58.5
22.6
29.3
6.3
a
a
SriLanka
31
15
10.3
7.5
2.5
2.8
3.2
Total(South
59.4
51.7
40.3
25.9
1.6
14.5
4.4
Asia)
Source:WorldBank,DevelopmentResearchGroup(2009)
a:By200506,thecountryhadachievedthe2015targetofhalvingpoverty,using1990asthebaseline.
Remittances,ImplicationsforPoverty
Overseas migration and the resulting remittances have served dual objectives world wide; ie, easing
pressure on employment market and providing foreign exchange for balance of payments as well as
budgetarysupport.Remittancessupplementthehouseholdincome,upliftlifestandardandthusreduce
absolutepoverty.ItisinthiscontextthatcountrieslikePhilippinehavepromotedoverseasmigrationas
an industry. Remittances help the household to increase their consumption expenditure on food,
develop expenditure on housing, skill development and establishment of small businesses thus
improvingthescopeforhigherfutureincome.
142
Poverty
RemittancesfromexpatriatePakistanisarebelievedandempiricallyprovedtohavehadamajorimpact
onthereductionintheincidenceofpoverty.Thetotalremittancesinflowsbetween199099and2009
10 have amounted to $62.0 billion. Jump in remittances is more likely to have been a result of
Government intervention such as the Pakistan. Remittance initiative which encouraged transmittal of
remittancesthroughformallyrecordedchannels.AlsothedepreciationofthePakistanrupeeattracted
remittanceinflowsforinvestmentpurposes.Thismassiveinflowofforeignremittances,whentranslated
into increased consumption expenditures and greater employment opportunities generated through
greater investments in the construction industry, the SME sector, other businesses and consumption
demandcontributedtothedeclineinpovertyinthecountry.
143
Education
10
It is widely acknowledged that education is amongst the single most important factor contributing to
povertyalleviation.Educationplaysanoverarchingroleandhasacrosscuttingimpactonallaspectsof
human life. It is a vital investment for human and economic development. Unfortunately, Pakistans
standingonthisfronthashistoricallybeenpoor,ascanbeseeninTable10.1.
Table10.1:ComparisonofPublicSectorSpendingonEducation
PublicSectorSpending
Literacyrate
Country
(As%GDP)
in(%)
Bangladesh
2.6
55.0
China
93.7
India
3.3
Indonesia
3.5
Iran
5.2
Malaysia
4.7
92.1
Nepal
3.2
57.9
Pakistan
2.1
57.0
SriLanka
90.6
Thailand
4.5
Vietnam
5.3
92.5
:notavailable
Source:WorldBank,UNDP,UNESCO,FBS,MinistryofEducation
Figuresforlatestavailableyear
WithpublicspendingoneducationasapercentageofGDPamongstthelowestinthechosensample,
the outcome with regard to literacy levels is not surprising. While the literacy rate has improved
graduallyoveraperiod,Pakistansindicatorsonthisfrontcontinuetorankatthebottomendofglobal
rankings.Withintheregion,onlyBangladeshhasaworseoutcomeonbothindicators,spendingbythe
public sector as well as literacy rate. Nepal spends a substantial fraction more than Pakistan on
education,whileitsliteracyrateismarginallyhigher.
Giventhisdismalstateofaffairs,HumanCapitalDevelopmenthasbeenaccordedamongstthehighest
prioritiesinthegovernmentsNinePointPlanof2008.
10.1Literacy
AccordingtothelatestPakistanSocialandLivingStandardsMeasurement(PSLM)Survey200809,the
overallliteracyrate(age10yearsandabove)is57%(69%formaleand45%forfemale)comparedto
56% (69% for male and 44% for female) for 200708. The data shows that literacy remains higher in
urbanareas(74%)thaninruralareas(48%),andismoreprevalentformen(69%)comparedtowomen
(45%).However,itisevidentfromthedatathatoverallfemaleliteracyisrisingovertime,butprogressis
unevenacrosstheprovinces.Whenanalyzedprovincially,literacyrateinPunjabstoodat(59%),Sindh
145
(59%), Khyber Pakhtunkhwa (50%) and Balochistan at (45%). The literacy rate of Sind and Khyber
Pakhtunkhwahasimprovedconsiderablyduring200708to200809(Table10.2).
Accordingtothedata,theoverallschoolattendance,asmeasuredbytheNetEnrolmentRate(NER)1,for
200809 was 57% as compared to 55% in 200708. All the provinces have shown an increasing trend,
withSindhrecordingthehighestincrease,followedbybothKhyberPakhtunkhwaaswellasBalochistan.
Nationally,theGrossEnrolmentRate(GER),sometimesreferredtoastheparticipationrate,whichisthe
number of children attending primary school (irrespective of age) divided by the number of children
who ought to be attending, in case of both male and female saw no change and remained at 91%
between200708and200809.SindhandKhyberPakhtunkhwahaveshownnoticeableincreaseinthe
respectiveperiod(Table10.2).
Table10.2:LiteracyRate10yrs+,GER&NERTrendinPakistan&GenderParityIndex(GPI)
Literacyrates
GERPrimary(age59)
NERPrimary(age59)
(10years&above)
REGION/PROVINCE
200607 200708 200809 200607 200708 200809 200607 200708 200809
Pakistan
Male
67
69
69
99
97
99
60
59
61
Female
42
44
45
81
83
83
51
52
54
Both
55
56
57
91
91
91
56
55
57
Rural
45
49
48
84
83
85
52
51
53
Urban
72
71
74
106
106
106
66
66
68
GPI
0.63
0.64
0.65
0.82
0.86
0.83
0.85
0.88
0.87
Punjab
Male
67
70
69
106
102
102
64
62
64
Female
48
48
50
95
92
92
59
59
60
Both
58
59
59
100
97
97
62
61
62
GPI
0.72
0.69
0.72
0.90
0.90
0.90
0.92
0.95
0.94
Sindh
Male
67
69
71
88
87
93
56
55
57
Female
42
42
45
68
72
75
43
46
49
Both
55
56
59
79
80
84
50
51
54
GPI
0.63
0.61
0.63
0.77
0.83
0.77
0.77
0.84
0.80
Khyber
Male
67
68
69
96
94
102
56
55
58
Pakhtunkhwa
Female
28
33
31
67
71
70
41
41
45
Both
47
49
50
82
83
87
49
49
52
GPI
0.42
0.49
0.45
0.70
0.75
0.69
0.73
0.75
0.64
Balochistan Male
58
66
62
89
88
93
49
47
51
Female
22
23
23
52
59
54
32
35
36
Both
42
46
45
72
75
75
41
41
44
GPI
0.38
0.35
0.37
0.58
0.67
0.55
0.65
0.74
0.64
Source:PakistanSocial&LivingStandardMeasurementSurvey200809
TheGenderParityIndex(GPI)istheratiooffemaleenrolmenttomaleenrolment.AGPIofmorethan
1
Net Enrolment Rate refers to the number of students aged 59 years that are enrolled in a primary school,
dividedbythenumberofchildrenintheagegroupforthatlevelofeducation.
146
Education
oneindicatesthat,inproportiontoeverymaleintheschool,thereismorethanonefemale.TheGPIfor
Pakistanasawholein200809,is0.65comparedto0.64in200708.ProvincewiseGPIishighinPunjab
(0.72) followed by Sindh (0.63), Khyber Pakhtunkhwa (0.45) and Balochistan (0.37), (Table 10.2). The
lower GPI with a decreasing tendency in Khyber Pakhtunkhwa deserves attention at both the federal
andprovinciallevels.
10.2EducationalInstitutionsandenrolment
i)PrePrimaryEducation
PrePrimary Education is an important component of Early Childhood Education (ECE), Prep or Kachi
classesofchildrenhavingageof34years.Anincreaseof2.6%inPrePrimaryenrolment(8.434million)
in 200809 over 200708 (8.218 million) has been observed and during 200910, it is estimated to
increaseby2.2percent.See(Table10.3).
ii)PrimaryEducation(ClassesIV)
Anumberof156,653PrimarySchoolswith465,334Teachersarefunctional(Table10.3).Anincreaseof
0.6%inPrimaryenrolment(18.468million)in200809over200708(18.360million)hasbeenobserved
andduring200910,itisestimatedtoincreaseby1.3percent.
iii)MiddleEducation(ClassesVIVIII)
Anumber40,919MiddleSchoolswith320,480Teachersarefunctional(Table10.3).Adecreaseof0.2%
in middle enrolment (5.414 million) in 200809 over 200708 (5.426 million) has been observed and
during200910,itisestimatedtoincreaseby0.6percent.
iv)SecondaryEducation(ClassesIXX)
Anumber24,322SecondarySchoolswith439,316Teachersarefunctional(Table10.3).Anincreaseof
2.9%inmiddleenrolment(2.556million)in200809over200708(2.484million)hasbeenobserved
andduring200910,itisestimatedtoincreaseby5.6percent.
v)HigherSecondary/InterColleges(ClassesXIXII)
An enrolment of 1.147 million is estimated in 200910 over 1.074 million in 200809 and 959,690 in
200708. 3,291 Higher Secondary Schools / Inter Colleges with 76,184 Teachers are functional (Table
10.3).78newschools/InterCollegeshavebeenaddedsinceJuly2008.
vi)DegreeCollegesEducation(ClassesXIIIXIV)
An enrolment of 458,835 students is expected during 200910 in Degree Colleges over 429,251 in
200809and383,810in200708.1,238DegreeCollegeswith21,176Teachersarefunctional(Table10.3)
and205newDegreeCollegeshavebeenaddedsinceJuly2008.
vii)UniversitiesEducation(ClassesXVonwards)
Anenrolmentof948,364isestimatedin200910inHigherEducationover803,507in200809.Inorder
to boostup higher education four new universities have been established during the year 200910
making the total number to 132 universities with 50,825 Teachers in both Private and Public Sectors
(Table10.3).
147
Table10.3:NumberofMainstreamInstitutions,EnrolmentandTeachersbyLevel
Enrolment
Institutions
Teachers
Year
200809
200910
200809 200910
200809
200708
200708
200708
(P)
(E)
(P)
(E)
(P)
PrePrimary 8,218,419 8,434,826 8,623,544
18,360,468 18,468,096 18,714,582 157,407 156,653 156,364
452,604
465,334
469,151
Middle
5,426,548 5,414,157 5,445,247
40,829
40,919
41,456
320,611
320,480
323,824
High
2,484,537 2,556,186 2,699,589
23,964
24,322
24,822
429,932
439,316
447,117
3,213
3,291
3,399
74,223
76,184
78,656
Primary*
Mosque
HigherSec./
959,690
Inter
Degree
383,810
Colleges
Universities. 741,092
Total
1,074,323 1,147,807
200910
(E)
429,251
458,835
1,202
1,238
1,275
20,971
21,176
21,385
803,507
948,364
124
129
132
46,893
50,825
56,839
36,574,564 37,180,346 38,037,968 226,739 226,552 227,448 1,345,234 1,373,315 1,396,972
P:Provisional
E:Estimated
Source:PakistanEducationStatistics200708,200809and200910,EMISMoEIslamabad
10.3MissingFacilitiesinPublicSchool
The Poor quality of existing learning environment is evident from the fact that a large number of
schoolsaremissingbasicinfrastructurei.e.37.7%schoolsuptoelementarylevelarewithoutboundary
wall, 33.9% without drinking water facility, 37% without latrines and around 60% schools are without
electricity. For higher accessibility of education particularly for girls in low income household and to
enhance the enrolment, existing schools should be upgrade with the provision of necessary
infrastructuretoimprovebothoutputandqualityofeducation.DetailsmaybeseeninTable10.4:
Table10.4:MissingFacilitiesinGovernmentSchools200809
Without
Without
Without
Without
Without
Province/Area
Boundary
Drinking
Building
Latrine
Electricity
Wall
Water
Punjab
505
13,378
8,279
14,551
26,825
Sindh
11,669
24,470
26,240
22,588
39,616
KhyberPakhtunkhwa
1,113
9,116
10,029
7,888
13,719
Balochistan
681
7,689
4,197
8,425
9,806
AJK
2,705
4,498
3,074
3,390
4,083
GilgitBaltistan
183
1,084
1,069
1,072
1,072
FATA
908
1,024
2,101
1,882
1,640
ICT
0
15
7
50
8
TotalPakistan
17,764
61,274
54,996
59,846
96,769
In%
10.9%
37.7%
33.9%
36.9%
59.6%
Source:NEMIS200809AEPAM,MinistryofEducation,Islamabad.
Themissingfacilitiesinpublicschoolsbecomemoreglaring,ifweanalysethemfromurbanruralangle,
asdoneinTable10.5:
148
Education
Table10.5:MissingFacilitiesPakistan:Urban/RuralDisparities200809
SchoolswithoutFacilities
Urban
Rural
Total
Electricity
Water
Latrine
BoundaryWall
InNumber
11,609
85,160
96,769
InPercentage
35.8%
65.5%
60.2%
InNumber
2,179
52,817
54,996
InPercentage
6.7%
40.6%
34.2%
InNumber
9,763
50,083
59,846
InPercentage
30.1%
38.5%
37.2%
InNumber
9,026
52,248
61,274
InPercentage
27.9%
40.2%
38.1%
Source:NEMIS200809AEPAM,MinistryofEducation,Islamabad.
10.4FinancingofEducationinthePublicSector
Public Expenditure on Education as percentage to GDP is lowest in Pakistan as compared to other
countries of the South Asian region. According to official data, Pakistan allocated 2.5% of GDP during
200607, 2.47% in 200708, 2.1% in 200809 and 2.0 % in 200910 which shows persistent declining
trend (Fig10.1). According to UNESCOs EFA Global Monitoring Report 2009, the Public Sector
expenditure on Education as percentage of GDP, in other countries of the region was 2.6% in
Bangladesh,3.2%inNepal,3.3%inIndia,5.2%inIranand8.3%ofGDPinMaldives.
Fig10.1PublicExpenditure(as%)ofGDP
2.5
1.5
2.50
2.47
2.24
2.10
2.05
200809
200910
0.5
0
200506
200607
200708
Source:MinistryofEducation
The breakup of investment in education by the Federal Government and the Provinces for the year
200910isgivenintheTable10.6
149
Table10.6:SummaryofPublicSectorBudgetaryAllocationforEducation200910*
FederalGovernment
Current
MinistryofEducation
3,718.665
HigherEducationCommission
21,500.000
Federal Government Education Institution in Cantonment
1,929.760
andGarrisons
FederallyAdministeredTribalAreas
4,143.716
GilgitBaltistan
1,408.738
AJ&K
3,794.450
SocialWelfare&SpecialEducationDivision(DGSEandPBM)
410.340
NationalVocational&TechnicalEducationCommission
226.000
OtherFederalMinistries/Divisions/Organizations
6,570.556
Total(Federal)
43,702.222
ProvincialGovernments
GovernmentofPunjab
24,778.707
GovernmentofSindh
13,919.081
GovernmentofKhyberPakhtunkhwa
2,411.730
GovernmentofBalochistan
2,008.985
Total(Provinces)
43,118.503
DistrictGovernment**
Punjab
66,223.058
Sindh
31,930.127
KhyberPakhtunkhwa
21,379.271
Balochistan
8,673.374
TotalDistrictGovernments
128,205.830
TotalProvinces&DistrictGovernments
171,324.333
GrandTotalFederal,Provincial&
DistrictGovernments
215,026.555
*:TentativeStatement
**:Provisionaldatabasedonprojection
Development
5,500.000
18,500.000
14.910
(Rs.inmillion)
Total
9,218.655
44,000.000
1,944.670
1,534.318
784.081
722.000
316.450
1,500.000
3,663.33
32,535.090
5,678.034
2,192.819
4,516.450
726.790
1,726.000
10,233.89
76,237.312
24,794.589
6,020.000
2,421.133
6,059.354
39,295.076
49,573.296
19,939.081
4,832.863
8,068.339
82,413.579
6,293.739
72,516.797
5,714.157
37,664.284
1,995.678
23,374.949
102.460
8,775.834
14,106.034
142,311.864
53,401.110
224,725.443
85,936.200
300,962.755
10.5NationalEducationPolicy2009
ThenewNationalEducationPolicy(NEP)2009hasbeenformulatedafterlengthydeliberationinitiated
waybackin2005.NEPformulationprocessremainedalmostdormantduringtheyears2007and2008,
owing to fluctuating political situation. The present Government reactivated the NEP process and
convened 15th InterProvincial Education Ministers (IPEM) Meeting in February 2009 at Islamabad to
share the draft NEP and getting implementing partners new political and bureaucratic leadership of
educationdepartmentsofprovincesaswellasotherfederatingunitsonboard.
After establishing consensus at aforesaid IPEM meeting, a summary for the Cabinet on National
EducationPolicy2009(NEP2009)wassubmittedtoCabinetDivisioninearlyMarch2009,whichwas
consideredbytheFederalCabineton8thApril2009.TheHonourablePrimeMinisterdirectedMinistry
ofEducation(MoE)tosharethePolicydocumentwithallstakeholdersforevolvingmorebroadbased
policy actions. MoE also made a presentation before the National Assembly Standing Committee on
Education, which endorsed most of the policy actions contained in NEP 2009. Finally, Cabinet in its
meetingheldonSeptember9th,2009approvedNEP2009.
Ashifthasbeenmadebymakingnationalpolicyatrulynationalratherthanafederalmatter.Forthis,
150
Education
it has been recommended that the InterProvincial Education Ministers (IPEM) Conference, with
representationofallthefederatingunits,willbethehighestbodytooverseeprogressofeducationin
thecountry.
AsperPolicydocument chapter9ImplementationFramework,implementationstrategiesandplans
aretobepreparedbytheprovincialandareaGovernments,withfullsupport,facilitationandcapacity
building by MoE, where required. The implementation of the Policy shall be the responsibility of
respectiveProvincial/AreaEducationDepartmentswithoverallsupervisionofInterProvincialEducation
Ministersforumwhichwillalsobethecompetentauthorityforanyperiodicmonitoringandadditions/
amendmentsinthePolicy,asandwhenrequired.ForsalientfeaturesofNEP2009seeBox1.
Box1:SalientFeaturesofNEP2009
Apartfromdueemphasisongovernanceissuesandanimplementationframework,somedistinctfeaturesofthe
policyarementionedasunder:
I.Access&Equity
x DakarEFAGoalsandMDGsrelatingtoEducationshallbeachievedby2015.
x Introduction of Early Childhood Education (35 years) and encouraging inclusive and childfriendly
education.
x Primaryeducationofficialageshallbe6to10years.
x EquityinEducation(gender,geographicalUrbanRuralareas)shallbepromoted.
x Grades11and12shallnotbepartofthecollegeeducationandmergedintotheschooleducation.
x GovernmentsshallestablishApnaGharresidentialschoolsineachprovincetoprovidefreehighquality
educationfacilitiestopoorstudents.
x Everychild,onadmissioninGradeI,shallbeallottedauniqueIDthatwillcontinuethroughouthisorher
academiccareer.
x Thedefinitionoffreeeducationshallincludealleducationrelatedcosts.
x Waiverofmaximumagelimitforrecruitmentoffemaleteachers,whereverrequired.
x AccesswillbeextendedbyensuringavailabilityofTechnicalandVocationalEducation(TVE)atdistrictand
tehsillevels.RelevancetoLabourMarketshallbeensured.
x Enrolmentinhighereducationsectorshallberaisedfromexisting4.7percentto10percentby2015and
15percentby2020.
II.Governance,Quality&Relevance:
x TheGovernmentshallallocate7%ofGDPtoeducationby2015andnecessaryenactmentshallbemade
forthispurpose.
x Sector Planning in Education shall be promoted and each Provincial/ Area Education Department shall
developitssector/subsectorplan,withfacilitationandcoordinationatfederallevel.
x A system for donor harmonization for aideffectiveness and improved coordination between
developmentpartnersandgovernmentshallbedeveloped.
x Fragmentedgovernanceofeducationatfederalandprovinciallevelsincludingliteracyshallbemanaged
underoneorganization.
151
x Separate academic & educational management cadres with specified training and qualification
requirementsshallbeintroduced.
x InordertobridgePublicPrivatedivide,governmentsshalltakestepstobringharmonythroughcommon
standards,qualityandregulatoryregimes.
x Deeni Madaris shall be mainstreamed by introducing contemporary studies alongside the curricula of
DeeniMadaris.
x MinimumNationalStandardsforeducationalinputs,processesandoutcomesshallbeestablished.
x InterProvincial Education Ministers (IPEM) forum shall be institutionalized, with legal mandate to
overseeimplementationofNEPandmakingamendmentsinit,whenrequired.
x Teacher training arrangements, accreditation and certification procedures shall be standardised and
institutionalised.
x Governmentsshalltakestepstoensurethatteacherrecruitment,professionaldevelopment,promotions
andpostingsarebasedonmeritalone.
x Thecurriculumdevelopmentandreviewprocessshallbestandardisedandinstitutionalised.
x UseofInformationCommunicationTechnologiesinEducationshallbepromoted.
x CurriculumWing of Ministry of Educationand provincial textbook boards shall ensure eliminationof all
types ofgender biases from textbooks. Also adequate representation of females shall be ensured in all
curriculumandtextbooksreviewcommittees.
x Awellregulatedsystemofcompetitivepublishingoftextbooksandlearningmaterialsshallbeintroduced.
x Examinationssystemsshallbestandardisedtoreducedifferentialsacrossstudentsappearingindifferent
boardsofexaminations.
x CareerCounsellingatsecondaryandhighersecondarylevelshallbeinitiated.
x MatricTechstreamshallbereintroducedandschemeofstudiesrevisedaccordingly.
x SportsactivitiesshallbeorganizedattheSecondary,HigherSecondary,CollegeandUniversitylevels.
x Matchingwithlabourmarket,developlinkageswithindustry,innovationandpromotionofresearchand
development(R&D)culturearehallmarksofNEP2009.
x The policy proposes National Qualifications Framework (NQF) with a changed program structure that
encompassesallqualificationsinthecountry,bothacademicandvocational/technical.
NationalEducationPolicy(NEP)2009considersfederalprovincialownershipandeffectivecoordination
withinthebasicprincipleofprovincialautonomy,askeytosuccessfulimplementationoftheNEP.Inthis
context, the Policy limits the federal role as facilitator and coordinator in the implementation of NEP.
The Policy provides broad Implementation framework to guide the process of Implementation.
Followingarethefourmaincomponentsoftheimplementationprocess:
x InstitutionalisationoftheInterProvincialEducationMinisters(IPEM)Forum
x PrioritisationofrecommendationsofNEPforimmediateactionatfederalandprovinciallevels
i.e.whatareasfromthepolicyneedtobeprioritizedinthe1stphaseofimplementation;
x Agreementoncoordinationmechanismbetweenfederalandprovincialgovernments;
x HarmonisationofdonorsassistanceforEducation
152
Education
The cornerstone of the NEP implementation framework is the institutionalization of InterProvincial

EducationMinisters(IPEM)Forum,ashighestbodytooverseeandmonitortheimplementationofNEP.
Followingareashavebeenprioritized:
1. InstitutionalizationofIPEM(alreadyexplainedabove)
2. NationalAuthorityforStandardsofEducation
3. InterProvincialStandingCommitteeonTextbooks
4. SettingupofSeparateManagementCadre
5. StandardizationofExaminationSystem
6. NationalUniversityofTechnologyincoordinationwithNAVTECandHEC
7. ActionPlanforNEPImplementation(SectorWidePlanning)
Therealchallengehowever,istosynchronizeandchannelizetheirsupporttohavemaximumbenefit,
avoidingoverlapping/duplicationforrealizationofobjectives,laiddowninNEP2009.
10.6HumanResourceDevelopment
Humanresourcedevelopmentisplayingavitalandparamountroleintheeconomicdevelopmentofany
county.Inthisrespect,theHigherEducationCommission(HEC)hasmadesignificantprogress.Withthe
dual objective of increasing institutional capacity and enhancing local research activities, the major
thrustofprogramsinthisareahavebeenprimarilyaimedatimprovingtheacademicqualificationsof
university faculty. Scholarships schemes are also open to individuals working in the private sector or
governmentservantsaswellasforPakistanistudents.HEChasawarded1,426undergraduateand6,653
post graduate scholarships, out of which 3,765 MS leading to Ph.D scholarships are under Indigenous
Programs. This scheme has produced more than 300 Ph.Ds in Pakistan. These scholars have joined
reputablePakistaniUniversitiesandR&DorganizationsinthePublicandPrivateSector.Itispertinentto
mention here that HECs local scholarship programmes, in addition to supporting HEC scholars also
support the local universities in upgrading the infrastructure of research facilities at universities
particularlylaboratoryequipment,chemicalsetc.
Quality of education largely depends on quality of teachers; therefore HEC focuses professional
development training of university teachers so that global quality standards and practices could be
maintainedinthehighereducationinstitutionsofPakistan.HigherEducationCommissionhasawarded
PostDoctoratescholarshipsto503universityteachers.Inaddition,11021facultymembersandsenior
universityadministratorshavebeentrainedthroughdifferentlongandshorttermcourses.
10.61HigherEducationCommission
Higher education plays a pivotal role in making an economy knowledge based and intellectual capital
orientedthatfinallycontributesasdrivingforceforinnovationandcreativityinthisageofglobalization
where sound technological base provides rapid strides in development through rational allocation of
resourcesforcompetitivevalueadditioninhumanaswellasinphysicalresources.Inordertoboostup
highereducationfournewuniversitieshavebeenestablishedduringtheyear200910.Thedetailinthis
regardisgiveninTable10.7,whereasthetrendofincreaseinthenumberofPublicandPrivatesector
Universities/DegreeAwardingInstitutions(DAI)isshowninFig10.2.
153
Table10.7
7:NewUniverssities/DAIestaablishedduringg200910
Sr#
N
Name
1.
A
AbdulWaliKhan
nUniversity,M
Mardan
DateofEstabliishment
D
O
OrdinanceNo.
IIIof2009dateed25.02.2009
(
(ActNo.XVIIId
dated24.10.20
009)
U
UniversityofW
ah,WahCanttt
A
ActNo.IVof20
009dated080
072009
Sh
haheed Benazzir Bhutto University Sherin
ngal Upper Khyber
K
Pakhtunkhwa Goveernment Regu
ulation
D
Dir,KhyberPak
N
No.IIof2009d
dated061020
009
htunkhwa
HITECUniversity,TaxilaCantt
A
ActNo.XIIof20
002dated171
112009
Sourcee:HEC
2.
3.
4.
Fig10.2:Universitties/DAIsinPaakistan
Publicsector
PriivateSector
(Innumbers)
80
60
40
20
0
200102
200203
200304
2000405
200506
6
200607
200708
200
0809
20091
10
Source:HEC
nrolmentinH
HigherEducattionInstitutio
ons.
10.62En
Enrolmen
ntatUniversitties/DegreeA
AwardingInsttitution(exclu
udingaffiliateedcolleges)hasbeenincreeasing
overtheyyears.Duringg200809,theerewere803
3,507studenttsstudyingin theuniversittieswhichind
dicate
an increase of 190.94
4 % over the total enrolm
ment of 2001
102 (276,274
4). The tendeency of increeasing
o enrolmentt is depicted
d at Fig10.3
3 whereas to
otal enrolment of studen
nts at univerrsities
number of
/DAI+ConstituentColle
egesbySecto
orsince200102isgivenin
nTable10.8.
Table10.8
8:EnrolmentattUniversities//DAI+Constitu
uentCollegesb
bySector
Year
DistanceLearning
Public
Privvate
200102
89749
142652
438
873
200203
108709
167775
552
261
200304
159257
202871
611
108
200405
187557
216454
679
953
200506
199660
242879
789
934
200607
272272
276226
915
563
200708
305962
331664
103
3466
200809P
339704
348434
115
5369
Total
276274
331745
423236
471964
521473
640061
741092
803507
Sourcee:HEC
154
Education
(Thousand000)
Fig10.3:StudentEnrolmentatUniversity(Campus+ConstituentColleges)
Male
Female
Total
900
800
700
600
500
400
300
200
100
0
200102
200203
200304
200405
200506
200607
200708
200809P
Source:HEC
10.63FundingtoHigherEducation
Since the inception of Higher Education Commission, the funding to higher education has immensely
increased. The country is facing financial constraints for the last few years, impact of which has also
beenfeltbyhighereducationsector.NonDevelopmentfundswerecurtailedduringthefinancialyear
200708.Recurringgrantallocatedduringfinancialyear200809werekeptatthelevelofpreviousyear.
For the current financial year 200910, with support of Rs. 8.0 billion from World Bank, funding the
Higher Education for Development Expenditures has been increased to Rs. 22.5 billion. The Non
DevelopmentfundshavealsobeenincreasedtoRs.21.5billion.Sofar,60%oftheallocatedfundsfor
current financial have been released. Development & non Development Expenditures on Higher
Education for five years are given below in the Table10.9 whereas the ratio of increase in Higher
EducationFundingisshowninFig10.4.
Table10.9:DevelopmentandNonDevelopmentExpenditureonHigherEducation
200506
200607
200708
ReleasedRecurring
10,493.412 14,332.521 12,536.498
ReleasedDevelopment
10,890.877 14,409.156 15,390.455
ReleasedTotal
21,384.289 28,741.677 27,926.953
*:Allocation
Fig10.4RatioofIncreaseinHigherEducationFunding
50000
(MillionRs.)
200809
200910*
15,766.425 21,500.000
16,420.408 22,500.000
132,186.833 44,000.000
Source:HEC
ReleasedRecurring
ReleasedDevelopment
45000
Rs.inmillion
40000
35000
30000
25000
20000
15000
10000
5000
0
200506
200607
200708
200809
200910P
Source:HEC
155
10.64Ph.DsProducedbyPakistaniUniversitiesovertheYears
The numbers of Ph.Ds produced by the Pakistani Universities have increased sharply from 176 in the
year2000to624in2009.ThedetailinthisregardisgiveninFig10.5.
Fig10.5Ph.DsProducedbyPakistaniUniversities
700
600
500
400
300
200
100
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009P
Source:HEC
10.7MAJORPROGRAMME/PROJECTSOFMoE
10.71PresidentsEducationSectorReforms(PESR)
Project Management Unit of Ministry of Education started a mega project in 2007 to provide missing
facilities under Presidents Education Sector Reform (PESR) Project. The project Provision of Missing
FacilitiesisbeingexecutedthroughoutthecountryexceptPunjabprovince.Asperoriginalscopeofthe
Programme, a total of 16,000 schools in 111 Districts with estimated cost of Rs. 31.7 billion were
requiredtobeprovidedwithmissingfacilitiesin5years(July2006June2011).Duringthefinancialyear
20092010, an amount of Rs. 2000 million was originally allocated for the project, which was later
curtailed to Rs. 800 million due to financial constraints. The amount has been distributed among the
Provinces (Sindh, Khyber Pakhtunkhwa and Balochistan) and Areas (FATA, FANA/GB & AJK) as per
approvedCash/WorkPlan.AsperrevisedallocationforFY200910,itwasplannedtoprovidemissing
facilitiesin1233GovernmentPrimaryandMiddleschoolsatatotalrevisedcostofRs.800million(with
majorcomponentofRs.781.53millionforcivilworks).
10.72ProjectsWingofMoEhastakenvariousinitiativesresultinginfollowingachievements:
EarlyChildhoodEducation(ECE)
x ValidationofthestandardsforECEhasbeeninitiated.
x TeacherguidecumtextualmaterialforECEhasbeendeveloped.
x AdvocacyandawarenessraisingmaterialforpromotionofEarlyChildhoodEducation(ECE)has
beendeveloped.
AdultLiteracy
x Adultliteracysupplementaryreadingmaterialaswellasinstructionalmaterialinadultliteracy
hasbeendevelopedfordisseminationtotheAdultLiteracycentersinthecountry.
x 5yearAdultLiteracyPlan(201015)forallthefourprovincialaswellasFATAandGilgitBaltistan
156
Education
(GB)hasbeendrafted.
MadrassahEducation
x Rs.50.30millionwasdistributedamongst288DeeniMadarisforsalariesoftheirteachersunder
MadrassaReformsProject
x Monitoredandevaluated78Madaristochecktheiractivitiescarriedoutforteachingofformal
subjectsfromPrimarytoHigherSecondarylevelundertheproject.
10.73During200809,seventeenprojectswerecompleted;whiletwentynewprojectswereapproved
and included in PSDP 200910. The total number of projects in PSDP 200910 comes to 101, having a
totalallocationofRs.8097.613million,outofwhich86areapprovedand15unapproved.AsumofRs.
1944.898millionhasbeenreleasedsofarduringthefirstandsecondquartersofFY10.
x FifteenEFAprojectswereapprovedatthecostofRs.1036.897million.
x Science Technical Vocational Education (STVE) Section has managed to get five projects
approvedwhereasthreeprojectsareunderprocessforapprovalattheappropriateforum.
x In Elementary Secondary and College (ESC) Section, twenty three different projects were
considered by Departmental Development Working Party (DDWP) in its meetings during the
year;outofwhichelevenwereapprovedatatotalcostofRs.613.925million.
x Central Development Working Party (CDWP) approved thirteen Projects at a total cost of Rs.
4402.616million
x MinistryofEducationsYearbook200708waspreparedanddisseminated.Similarly,fourother
bookletsonfinancingofEducationinPakistanwerealsopreparedanddistributed.
x Necessary material / feedback were provided to different ministries interalia, for Economic
Survey,PRSPII,PRSMonitoringProject,GenderReformActionPlan(GRAP)andConventionon
theEliminationofallformsofDiscriminationAgainstWomen(CEDAW).
10.74ForeignAssistanceforEducationSector
Since2008,internationaldevelopmentpartnershaveextendedforeignassistanceforthedevelopment
ofeducationsectorinPakistanasgivenbelow:
x FundedbyDFIDatacostof3.5million,GenderinEducationPolicySupportProject(GEPSP)is
being implemented by Government of Pakistan with the technical assistance of UNICEF. Its
objectiveistostrengthenMoEtoaccelerateprogresstowardsgenderparityandequalityatall
levelsofeducationby2015.
x USAIDhasassistedaprojectStrengtheningTeacherEducationinPakistan(STEP),costingUS$
2.14milliontoenhanceGovernmentscapacitytoimprovepolicyframework,coordinationand
NationalStandardsforTeacherCertificationandAccreditation.
x USAID assisted EdLinks programme (focusing on Teachers Professional Development; Student
Learning&Achievement;Governance)inSindh,Balochistan,Islamabad&FATA)costingUS$90
million.
x USAIDhasfundedPreServiceTeachersEducationProgramme(PreSTEP)launchedatacostof
US$75million.
x UnderStrategicObjectiveGrantAgreement(SOGA),USAIDallocatedadditional$121millionfor
157
basiceducationduring2009.
x Department for International Development (DFID), UK entered into agreement with
GovernmentofPakistanforjointtaskForceonEducationandallocated250million.
x Under OneUN Joint Program, Technical Working Group on Education comprising officers of
MoEprioritizedJPAreas,Outcomes,Outputs,Activities,Costsetc.beforeitisformallaunchin
associationwithUNagencies.
x GTZisassistingMinistryofEducationintheareasofEducationpolicyreview,curriculumreform
and Textbook development, through its 2.5 million project titled National Basic Education
Policyprogramme.
10.75ForeignScholarships
The Foreign Scholarships are managed through two programmes named "Cultural Exchange
Scholarships and Common Wealth Scholarships" about two hundred scholarships are offered by
selecteddonorcountries,eachyear.Achievementsduringtheperiodareasunder:
x Under the Cultural Exchange Programme, Government of Pakistan is paying subsidy to the
scholarsatthe@USDollar200forMasterandUSDollar300forPh.D.candidatespermonth
(now being increased to US Dollar 300 and US Dollar 400 respectively) in addition to the
scholarshipsofferedbythedonorscountries.(seeTable10.10)
Table10.10:ScholarshipsunderCulturalExchangeProgramme
Proceeded
Visaunder
NameofCountry
Selected
/Availed
Process
China
117
68
Turkey
16
16
Romania
10
03
04
Slovak
03
03
Mexico
01
01
Egypt
13
13
Total:
160
87
21
Presently
Studying
30
128
02
16
02
05
03
01
01
01
44
36
197
Returned
x Under the Common Wealth Scholarships UK, Canada, Brunei Darussalam, New Zealand and
Malaysia extended offer but during the said period, only UK had offered and selected 09
candidateswhohavealreadyproceeded.
x GovernmentsofMalaysiaandRepublic of Koreaoffered5and2scholarshipsrespectivelyfor
Undergraduatestudies.GovernmentofKoreaselected3students.
x Government of Bangladesh is offering 14 seats each year for MBBS/BDS for admission in
BangladeshiMedicalCollegeonselffinancebasisunderSAARCquota.Theselectedstudentspay
feesatparwithBangladeshistudents. Duringthesaidperiod,13studentswereselected who
haveproceededabroad.
10.76ScholarshipsforStudentfromotherCountries:
MinistryofEducationisimplementingthefollowingscholarshipschemes:
158
Education
a. 100ScholarshipstoBangladeshiStudentsunderPrimeMinister'sDirective
Thesewerelaunchedin200405forfiveyearsforawardof75ScholarshipstoBangladeshistudents
inthefieldsofMedicine,EngineeringandInformationTechnologyunderPresident'sDirectives.The
numberofscholarshipswasincreasedfrom75to100underthePrimeMinister'sdirectiveandthe
period was extended upto 201415. So far, 75 students were admitted under this scheme in
different institutions of Pakistan. 57 students are still studying; while 18 have gone back on
completionoftheirstudies.
b. 200ScholarshipstoStudentsfromIndianOccupiedKashmirinMedicine,EngineeringandI.T.
Undertherevisedscheme2007,fourscholarshipstoIndianOccupiedKashmiristudents(IOK)arein
thefieldofMedicine,EngineeringandInformationTechnology.Thesescholarshipswereincreased
from 100 to 200 and the period was extended upto 201516. So far, 169 students from Indian
OccupiedKashmirhavebeenadmittedindifferentinstitutionsofPakistan.Joiningreportof31IOK
studentsisawaitedfromtheconcernedinstitutions.
c. AwardofCulturalScholarshipstotheStudentsfromOtherCountries.
78studentsfromdifferentcountriesarestudyinginvariousdisciplines/institutionsofPakistan.
d. Awardof1000ScholarshiptoAfghanStudents.
This scheme has been launched in October 2009 and nominations of 202 Afghan Government
nomineesreceivedthroughMinistryofForeignAffairs,Islamabad,havebeenforwardedtodifferent
institutions for their placement in MBBS / BDS / Engineering / IT / Agriculture etc on scholarship
basis.
10.77LocalScholarships:
a) SpecialschemeforthestudentsofBalochistanandFATAtitled"ProvisionofQuality'Education
Opportunities for the students of Balochistan and FATA was launched in 2007 under the
directives of Prime Minister and President at a capital cost of Rs. 481 million. The scheme
providesfor330scholarshipsperyearinthefollowingcategories.
CadetColleges/PublicSchools70scholarships ___________ (B40,F30)

Polytechnic/CommercialColleges230scholarships________ (B138,F92)
PrivateInstitutions30scholarships ____________________ (B18,F12)
Duringtheyear200809and200910,310 and330 studentsweregivenadmissionrespectivelyin

variousqualityeducationalinstitutions.
b)
UnderPresident'sSpecialProgramfor"ProvisionofQualityEducation"for200tribalstudents
from FATA and settled areas outside Khyber Pakhtunkhwa, 198 students are studying in various
qualityeducationalinstitutionsofthecountry.
c)
40 scholarships for Minorities arealsograntedperyearforthestudentsbelongingtothe
minorities of the countries (10 in Medicine, 10 in Engineering 20 for MA/ MSC). During the years
2008and2009total80(40+40)freshscholarshipsweregrantedtotheminoritystudents.
159
TABLE 11.1
NUMBER OF EDUCATIONAL INSTITUTIONS BY KIND, LEVEL AND SEX
Primary*
Middle
Schools (000)
Schools (000)
Total Female
Total Female
1992-93
130.6 40.3
11.8
5.4
1993-94
134.1 42.4
12.1
5.5
1994-95
139.6 44.4
12.6
5.7
1995-96
143.1 40.5
13.3
4.4
1996-97
149.7 52.1
14.5
6.3
1997-98
156.3 58.1
17.4
7.5
1998-99
159.3 53.1
18.1
7.2
1999-00
162.1 55.0
18.4
7.6
2000-01
147.7 54.3
25.5 12.0
2001-02
149.1 55.3
26.8 12.8
2002-03
150.8 56.1
28.0 13.5
2003-04
155.0 57.6
28.7 13.9
2004-05
157.2 58.7
30.4 14.8
2005-06
157.5 59.8
39.4 19.3
2006-07
158.4 60.9
40.1 17.5
2007-08
157.4 64.9
40.8 20.6
2008-09 (P) 156.7 63.4
40.9 20.4
2009-10 (E) 156.4 64.6
41.5 20.8
P : Provisional
- : not available
High
Secondary VocaArts and
Professional
Schools (000) tional Institutions Science Colleges
Colleges
Total Female
Total Female
Total Female
Total Female
8.7
2.8
602
316
800
293
260
109
9.2
3.0
474
218
824
303
260
112
9.5
3.2
487
221
863
317
271
116
9.5
2.4
577
224
909
338
286
124
9.9
3.3
578
225
1,141
382
310
129
11.1
3.9
574
223
1,056
400
315
139
12.4
3.3
580
228
1,137
433
336
153
12.6
3.4
612
233
1,222
464
356
161
14.8
4.6
630
236
1,710
691
366
171
15.1
4.6
607
239
1,784
731
376
177
15.6
4.8
585
230
1,855
768
386
186
16.1
5.1
624
228
1,989
822
426
206
16.6
5.3
747
328
1,604
684
677
331
22.9
8.1
3059
1475
2,996 1,484
1,135
664
23.6
9.0
3090
1491
3,095 1,420
1,166
631
24.0
9.0
3125
1507
3,213 1,642
1,202
700
24.3
9.2
3159
1523
3,291 1,671
1,238
721
24.8
9.7
3193
1540
3,399 1,741
1,275
742
E : Estimated
* : Including Pre-Primary & Mosque Schools
(Numbers)
Universities
Total Female
27
28
34
38
41
45
46
54
59
74
96
106
108
111
120
124
129
132
-
Notes
1. All figures include Public and Private Sector data
2. Female institutions include percentage of mixed institutions
Sources:
1. Figures of Primary, Middle, High and Higher Sec. from 1992-93 to 2008-09 is based on Annual Pakistan Education Statistics Reports,
AEPAM, Islamabad
2. Figures of Inter Colleges and Degree Colleges from 2004-05 onward is based on Annual Pakistan Education Statistics Reports, AEPAM,
Islamabad
3. Figures of Private School data from 1992-93 to 1999-2000 is based on 8th Five Year Plan : Planning Division, Pakistan
4. Figures of Private School data from 2000-01 to 2004-05 is based on 'Census of Private Education Institution 1999-2000, Federal Bureau of
Statistics, Islamabad
5. Figures of Private School data of 2005-06 onwards is based on 'National Education Census, 2005', AEPAM, Ministry of Education, Islamabad
6. Figures of Technical & Vocational from 2003-04 onward is based on Pakistan Education Statistics Reports, AEPAM, Islamabad
7. Figures of Universities are provided by Higher Education Commission (HEC), Islamabad (www.hec.gov.pk)
TABLE 11.2
ENROLMENT IN EDUCATIONAL INSTITUTIONS BY KIND, LEVEL AND SEX
Primary Stage
Middle Stage
High Stage
Secondary
Arts and Science
Professional
(IX-X)
Vocational
Colleges
Colleges
Universities
(I-V)
(VI-VIII)
Year
(000 No)
(000 No)
(000 No)
(000 No)
(000 No)
(Number)
(Number)
Total Female
Total Female
Total Female Total Female
Total Female
Total
Female
Total
Female
281,200
100,400
68,301
14,856
1992-93
10,271 3,696
3,040
994
1,168
357
93
24
422
151
1993-94
10,898 4,123
3,305 1,123
1,315
421
84
18
405
149
270,000
99,600
77,119
19,342
1994-95
11,900 4,708
3,816 1,347
1,525
514
86
15
422
166
281,600
110,400
80,651
21,174
1995-96
11,657 4,590
3,605 1,270
1,447
480
86
14
440
179
293,600
119,600
82,955
23,105
1996-97
13,088 5,350
3,726 1,357
1,521
520
92
15
457
191
304,800
127,600
91,883
25,050
1997-98
14,182 5,861
4,032 1,532
1,658
605
90
18
478
201
318,400
134,000
93,780
24,848
1998-99
14,879 5,149
4,098 1,586
1,703
639
75
17
509
234
312,000
140,400
91,637
25,469
1999-00
15,784 5,660
4,112 1,615
1,726
653
91
17
562
263
316,800
148,800
114,010
27,369
2000-01
14,105 5,559
3,759 1,706
1,565
675
83
14
582
283
305,200
149,600
124,944
36,699
2001-02
14,560 5,871
3,821 1,506
1,574
644
83
15
582
285
300,400
148,000
276,274
101,770
2002-03
15,094 6,132
3,918 1,551
1,589
658
94
19
625
306
320,800
158,400
331,745
128,066
2003-04
16,207 6,606
4,321 1,737
1,800
709
105
14
691
338
329,007
163,059
423,236
178,723
2004-05*
18,190 7,642
4,612 1,885
1,936
780
114
21
307
141
453,275
220,118
471,964
195,555
2005-06
17,757 7,710
5,322 2,191
2,188
905
239
90
891
444
355,705
209,806
521,473
212,997
2006-07
17,993 7,848
5,431 2,264
2,373
974
251
94
942
473
380,012
224,263
605,885
255,695
2007-08
18,360 8,032
5,427 2,279
2,484 1,022
256
96
960
452
383,810
226,517
741,092
342,125
5,414 2,298
2,556 1,071
265
99
1,074
508
429,251
246,686
803,507
356,233
2008-09 (P) 18,468 8,144
5,445 2,335
2,700 1,136
274
103
1,148
533
458,835
261,140
948,364
436,086
2009-10 (E) 18,715 8,297
P : Provisional
E : Estimated
Notes:
2. All figures includes Non Formal Basic Education (NFBE) and Deeni Madaris data
3. Female institutions include percentage of mixed institutions
Sources:
1. Figures of Primary, Middle, High and Higher Sec. from 1992-93 to 2007-08 is based on Annual Pakistan Education Statistics Reports, AEPAM, Islamabad
2. Figures of Inter Colleges and Degree Colleges for 2004-05 and onwards is based on Annual Pakistan Education Statistics Reports, AEPAM, Islamabad
3. Figures of Private School data from 1992-93 to 1999-2000 is based on 8th Five Year Plan : Planning Division, Pakistan
4. Figures of Private School data from 2000-01 to 2004-05 is based on 'Census of Private Education Institution 1999-2000', Federal Bureau of Statistics, Ibd
5. Figures of Private School data of 2005-06 onward is based on 'National Education Census, 2005' AEPAM, Ministry of Education, Islamabad
6. Figures of Technical & Vocational from 2003-04 onward is based on Pakistan Education Statistics Reports, AEPAM, Islamabad
7. Figures of Universities from 1992-93 to 2007-08 was downloaded from website of HEC, Islamabad (www.hec.gov.pk)
TABLE 11.3
NUMBER OF TEACHERS IN EDUCATIONAL INSTITUTIONS IN PAKISTAN, BY KIND, LEVEL AND SEX
Primary SchoolsMiddle Schools High Schools
Secondary VocaArts and Science
Professional
Universities
(Thousands) (Thousands) (Thousands)
tional Institutions
Colleges
Colleges
(Number)
*
(Number)
(Number)
(Number)
Total Female Total Female Total Female
Total
Female
Total
Female
Total
Female
Total
Female
1992-93
332.5 122.5 119.0 66.3 165.6 68.1
9,153
2,605
25,485
9,138
8,269
3,058
5,728
747
1993-94
359.1 138.6 132.8 78.2 217.4 88.5
7,965
1,603
27,666
9,825
8,754
3,178
5,217
918
1994-95
375.2 146.7 144.6 80.9 227.6 102.6
6,949
1,708
29,843
10,515
9,128
3,264
5,316
939
1995-96
377.5 145.1 159.1 85.0 217.6 89.8
7,291
1,799
32,898
11,729
9,969
3,657
5,417
927
1996-97
374.3 151.7 156.7 91.4 224.7 98.8
7,422
1,845
32,190
11,690
9,950
3,660
5,162
919
1997-98
397.0 164.7 168.4 101.0 252.9 112.9
6,923
1,870
39,267
15,767
10,930
4,105
5,515
976
1998-99
422.6 173.8 178.5 108.2 231.6 107.5
7,133
1,858
35,187
14,298
10,777
4,139
4,911
837
1999-00
402.4 169.8 193.9 117.6 247.8 115.8
9,253
1,959
39,268
15,764
11,065
4,221
5,914
1,174
2000-01
408.9 183.6 209.7 127.8 260.3 125.3
9,441
1,959
48,054
21,506
11,019
4,218
5,988
1,302
2001-02
413.9 183.5 230.1 139.3 270.2 126.1
7,192
1,863
55,146
23,016
10,598
4,164
5,160
1,247
2002-03
433.5 191.7 236.3 145.8 278.0 131.9
7,273
1,623
57,681
24,146
11,164
4,410
6,180
1,375
2003-04
432.2 195.3 239.4 146.6 276.9 134.2
7,042
1,325
57,881
24,190
11,245
4,505
37,428
2004-05
450.1 206.5 246.7 151.5 282.1 138.6
7,356
1,450
57,661
24,366
15,653
6,690
37,469
2005-06
454.2 210.6 310.8 201.6 417.1 209.9
14,565
4,658
69,425
33,959
20,568
10,485
37,509
2006-07
456.0 212.6 313.5 203.3 421.7 213.0
14,622
4,676
71,246
34,996
20,768
10,587
44,537
2007-08
452.6 216.0 320.6 208.2 429.9 219.6
14,914
4,770
74,223
36,162
20,971
10,690
46,893
2008-09 P 465.3 216.2 320.5 209.0 439.3 225.5
15,264
5,061
76,184
37,149
21,176
10,794
50,825
2009-10 E 469.2 218.2 323.8 211.5 447.1 231.1
15,508
5,207
78,656
38,312
21,385
10,900
56,839
- : not available
P : Provisional
E : Estimated
* : Including Pre-primary and Primary Schools
Note:
2. All figures include Non Formal Basic Education (NFBE) and Deeni Madaris data
Sources:
1. Figures of Primary, Middle, High and Higher Sec. from 1992-93 to 2006-07 is based on Annual Pakistan Education Statistics Reports, AEPAM, Islamabad
2. Figures of Inter Colleges and Degree Colleges for 2004-05 onward is based on Annual Pakistan Education Statistics Reports, AEPAM, Islamabad
3. Figures of Private Schools data from 1992-93 to 1999-2000 is based on 8th Five Year Plan : Planning Division, Pakistan
4. Figures of Private Schools data from 2000-01 to 2004-05 is based on 'Census of Private Education Institution 1999-2000', Federal Bureau of Statistics, Ibd
5. Figures of Private Schools data of 2005-06 and onwards is based on 'National Education Census, 2005', AEPAM, Ministry of Education, Islamabad
6. Figures of Technical and Vocational from 2003-04 onward is based on Pakistan Education Statistics Reports, AEPAM, Islamabad
7. Figures of Universities from 1992-93 to 2007-08 was downloaded from website of HEC, Islamabad (www.hec.gov.pk)
HealthandNutrition
11
InPakistan,investmentsintheHealthsectorareviewedasanintegralpartofthegovernmentspoverty
alleviation endeavour. An improvement in the overall health sector indicators of a country has
important ramifications not just for the quality of life of its citizens, but for economic development
generally,throughthechannelsofproductivityenhancementandpovertyalleviation.
Whiletherehasbeennoticeableimprovementinsomehealthindicatorsovertheyears,onthewhole,
Pakistanrankspoorlyonthiscount.Overall,lifeexpectancyinPakistanremainslowerthanmanyinits
peergroup,whileinfantaswellasmaternalmortalityratesareamongstthehighest.
TheNationalHealthPolicyofPakistanof2009seekstoimprovethehealthindicatorsofthecountry.It
aimstodosobydeliveringasetofbasichealthservicesforallbyimprovinghealthmanpower,gathering
and using reliable health information to guide program effectiveness and design, and strategic use of
emerging technology. It also aims to improve health status of the population by achieving policy
objectives of enhancing coverage and access of essential health services, measurable reduction in the
burden of diseases and protecting the poor and under privileged population subgroups against risk
factors.Severalprogramsareunderwaywithmajorthrusttoimprovehealthcare,coverageandtohelp
inachievingMillenniumDevelopmentGoals(MDGs).Specialattentionisbeinggiventothetrainingof
nursesandseveraltrainingcentresarealreadyinoperation.
TheachievementofMillenniumDevelopmentGoals(MDGs)isapriorityareaforPakistan,especiallyin
the health sector. Pakistan is committed to meeting these goals by 2015 by launching new policy
initiatives.Throughamajorhealthinterventionprogramandstrategies,itisaimedtoreducetheunder
fivemortalityrateto52per1000,infantmortalityrateto40per1000,andmaternalmortalityratioto
140by2015.Whereastheproportionof1yearoldchildrenimmunizedagainstmeaslesistargetedto
beincreasedto85%andtheproportionofbirthsattendedbyskilledhealthpersonnelto90%by2015.
Inaddition,planshavebeenformulatedtocombatTB,Malaria,HIV/AIDSandHepatitis,alongwithother
communicablediseases.
11.1HealthIndicators
InPakistan,healthstatusofthepopulationatlargehasimprovedconsiderablyovertime.However,by
internationalcomparison,thestatusismixed,butgenerallyimprovementsonthisfronthavelaggedin
thecaseofPakistan.Recentcrosscountrystudiesofvitalhealthindicatorsshowawidevariationin
epidemiological pattern between different Asian countries. Compared with Bangladesh, India and Sri
Lanka,forexample,Pakistansinfantmortalityrateishigher.Whilelifeexpectancyisalsohigherexcept
for Sri Lanka, the overall population growth at 2.1% (latest, revised) is the highest in the region.
Similarly,otherindicatorsshowthatalotofprogresswillhavetobemadetomeaningfullyimprovethe
healthstatusofthepopulation.
161
Table11.1:Indicators
Country
LifeExpectancy
(2008)
InfantMortality
MortalityRateunder5
PopulationAvg.
Rateper1000
per1000
Annual(%)Growth
(2009)
(2009)
(2009)
66.5
65.1
95.2
2.1
63.7
30.1
78.6
1.55
74.1
18.5
12.9
0.94
66.1
59.0
69.3
1.29
66.7
47.5
71.6
1.28
73.1
20.2
29.4
0.66
68.9
17.6
15.1
0.62
71.1
20.5
27.2
1.96
74.4
15.8
11.3
1.72
70.8
29.9
31.8
1.14
Source:WorldBank,U.S.CensusBureau,Internationaldatabase;PlanningCommission
Pakistan
India
SriLanka
Bangladesh
Nepal
China
Thailand
Philippines
Malaysia
Indonesia
11.2HealthExpenditure
Despiteanearlythreefoldincreaseinpublicsectorexpendituresince2001,spendingonhealthremains
abysmallylowandhasdeclinedasapercentageofGDP.Totalpublicsectorexpenditureonhealth,for
boththefederalaswellasprovincialgovernmentscombined,inthecurrentfiscalyearisprojectedtobe
0.54percentofGDP,whichisamongstthelowestofallothercountriesatasimilarincomelevel.
Table11.2:Health&NutritionExpenditures(200001to200910)
(Rs.billions)
PublicSectorExpenditure(FederalandProvincial)
Health
Percentage
FiscalYears
Expenditureas%
TotalHealth
Development
Current
Change
ofGDP
Expenditures
Expenditure
Expenditure
200001
24.28
5.94
18.34
9.9
0.72
200102
25.41
6.69
18.72
4.7
0.59
200203
28.81
6.61
22.21
13.4
0.58
200304
32.81
8.50
24.31
13.8
0.57
200405
38.00
11.00
27.00
15.8
0.57
200506
40.00
16.00
24.00
5.3
0.51
200607
50.00
20.00
30.00
25
0.57
200708
60.00
27.22
32.67
20
0.57
200809
74.00
33.00
41.10
23
0.56
200910
79.00
38.00
41.00
7
0.54
Source:PlanningandDevelopmentDivision
Fig-11.1: Health & Nutrition Expenditure

78000
69000
60000
51000
42000
33000
24000
Year
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
1998-99
1997-98
1996-97
1995-96
15000
Source:Planning andDevelopmentDivision
162
HealthandNutrition
11.3HealthFacilities:
WhilePakistanenjoysavastnetworkofhealthcarefacilities,coverage,accessibility,costandqualityof
healthcareremaincriticalissues.Aneffectivefighthasbeenlaunchedinpreventionandcontrolofboth
communicable and non communicable diseases in order to have an impact in the scenario of double
burden of diseases in the country. The health care system in Pakistan comprises the public as well as
privatehealthfacilities.Inthepublicsector,districtshavebeengivenpowerfordevelopingtheirown
strategies,programmesandinterventionsbasedontheirlocalneeds.Intheprivatesector,therangeof
health care facilities includes accredited hospitals and clinics, medical practitioners, homeopaths and
hakeems.Inaddition,nongovernmentalorganizations(NGOs)andPakistanscorporatesectorarealso
active in the health and social sector, the latter under their Corporate and Social Responsibility (CSR)
mandate.Theyhavebeensuccessfultoalargeextentinraisingthelevelofawarenessofpositivehealth
behaviour among the people. The human resource available for health care registered till December
2009inthecountryincluded139,555doctors,9,822dentistsand69,313nurses.Thecurrentpopulation
doctorratiois1,183personsperdoctorand16,914personperdentist.Healthcareisalsoprovidedto
the public through a vast health infrastructure facilities now consisting of 968 hospitals, 4,813
dispensaries,5,345BasicHealthUnits,572RuralHealthCentresand293TBCentresetc.However,the
healthcaresystemasawholeneedstobestrengthenedfurtheratalllevels.
Table11.3:HealthcareFacilities
HealthManpower
Registereddoctors
Registereddentists
Registerednurses
PopulationperDoctor
PopulationperDentist
PopulationperBed
200708
128,093
8,215
62,651
1245
19417
1544
200809
133,984
9,013
65,387
1212
18,010
1575
200910
139,555
9,822
69,313
1183
16914
1592
Source:MinistryofHealth
11.4PhysicalTargetsandAchievementsDuring200910
Theheathsectorperformanceintermsofphysicalinfrastructurei.e.RuralHealthCentres,(RHC)Basic
HealthUnits(BHU)andhospitalbedshasbeenencouraging.Thetargetsforhealthsectorduring2009
10 included the establishment of 50 Basic Health Units (BHUs), 10 Rural Health Centres (RHCs), up
gradationof20existingRuralHealthCentres(RHCs),50BasicHealthUnits(BHUs)andadditionof5000
hospital beds. The manpower development targets cover the output of 5000 Doctors, 500 Dentists,
4000 Nurses and 5000 paramedics. Under the preventive program, 7.5 million children have to be
immunizedand22millionpacketsoforalRehydrationSalt(ORS)aretobedistributedduring200910.
The achievements have been largely in vicinity of the targets. Targets and achievements for the year
200910aregiveninTable11.4
Table11.4:PhysicalTargetsandAchievementsDuring200910
Targets (Nos)
SubSector
200910
A.RuralHealthProgramme
i.NewBasicHealthUnits(BHUs)
50
ii.NewRuralHealthCentres(RHCs)
10
iii.UpgradationofexistingRHCs
20
iv.UpgradationofexistingBHUs
50
Estimated
Achievements(Nos)
Achievements
(%)
35
7
15
45
87
70
75
90
163
Table11.4:PhysicalTargetsandAchievementsDuring200910
Targets (Nos)
SubSector
200910
B.BedsinHospitals/RHCs/BHUs
5000
C.HealthManpowerDevelopment
i. Doctors
5000
ii. Dentists
500
iii. Nurses
4000
iv. Paramedics
5000
v. TBAs
550
vi. TrainingofLHWs
110,000
D.PreventiveProgramme
i. Immunization(MillionNos)
7.5
ii.OralRehyderationSalt(ORS)
22
(MillionPackets)
Estimated
Achievements(Nos)
4000
Achievements
(%)
80
4500
350
3200
4500
450
100,000
90
70
80
90
82
90
7
19
93
86
Source:Planning&Development Division
11.5HealthPrograms
Public health intervention include a number of programmes which are federally led With provincial
implementationarms.TheseincludetheNationalprogrammeofTBcontrol,MalariaandHiv./Aids
a)ExpandedProgrammeonImmunization(EPI)
The expanded programme on immunization (EPI) aims at protecting children by immunizing
themagainstChildhoodTuberculosis,Poliomyelitis,Diphtheria, Peruses,Measles,Tetanusand
also their mothers against Tetanus The Government of Pakistan provides support to the
programmethroughPCIs;thecurrentPCIisunderprocessfortheperiod200910to20132014
The Government has allocated Rs. 6000 million for the current year 200910 to improve the
health status of children and their mothers.. This ensures the commitment of the Federal
Government for provision of vaccines, syringes, cold chain equipment, operational vehicles,
printed material and launching of health education/ motivation campaign. The program has
beenabletoachievemajorachievementsas
x Surveillanceforacuteflaccidparalysis(AFP)hasmetglobalstandardsnationally.
x Pentavalentcombinationvaccine(DPT+HepB+Hib)hasbeenintroducedinthecountry.
ThiscombinationbroughtnewvaccineHaemophilusInfluenzaTypebintheprogramme.
x Measlescatchupcampaigncarriedoutinalloverthecountrywherein64million(100%of
thetarget)childrenwerevaccinated.
x GovernmenthasbroughtGAVIsupportforPentavalent(DPTHepBHib)vaccineforthe
countryundercofinancingmechanism.GAVIwillpayUS$136millionandthecountrywill
bearUS$15millionunderGAVIPahse2support.
x GAVI has also extended its support for the Immunization Services Strengthening through
StateBankofPakistanandutilizationofthesefundsisthroughPC1.
x Pakistanhasmadetremendousprogresstowardsachievingpoliotargetsandglobalexperts
164
HealthandNutrition
havereaffirmedthatcountrycouldbethenextpoliofreecountryintheworld.Thenumber
ofcaseshasbeenreducedfromthousandstojust89casesin2009andpolioremainsinjust
afewstrongholdsacrossthecountry.
x Successful negotiations with the World Bank to support cost of polio vaccine through an
IDABuyDownCredit,provisionofpoliovaccineissecureduntilearly2011.Successislinked
withindicatorsfailingwhichcreditwillbeconvertedtoloan.
b)AIDSControlProgramme
InPakistan,thetrendofHIVepidemichasshiftedfromalowprevalencestatetoconcentrated
statewhichisderivedfromthefactthatHIVprevalenceinsomeofthehighriskgroupshasbeen
foundtobemorethan5%andexistingbehaviourpatternssignifyittobeahighrisksituation.
Based on the surveillance data and epidemiological modeling, the NACP has estimated that
thereareabout97,400HIVpositivepeople,approximately0.1%ofthetotaladultpopulation.
TheGovernmentofPakistanexpandeditsresponsetoHIV/AIDSbytranslatingthestrategicplan
intoactionthroughtheEnhancedHIV/AIDSProgramme(200309)withassistanceoftheWorld
BankatacostofRs.2.85billion.However,basesonthefindingsofMidTermReview;arevised
National Strategic Framework was designed and the revised PC1s (201014) were developed
accordingly at a cost of Rs. 7.83 billion with the World Bank support. The mission is a more
comprehensivenationalHIVresponseandtargetingeffortstowardsachievementofMillennium
DevelopmentGoal6.
SignificantachievementsoftheProgrammeduringtheyearinclude:
a. Service delivery projects for high risk groups in the provinces covering almost 20% of the
targetpopulation.
b. CoordinationwiththeUNsystem,internationalandbilateraldonors
c. Operationalizationof20treatmentcentresforHIVpatientsinFederalareaandProvinces,
providingfreeofcosttreatmentofopportunisticinfectionsandARVsto1300patients.
d. RevivalofGermanfundedSafeBloodTransfusionproject.
e. RevisionofnationalHIVestimatesandprojectionsusingmodelingwithUNAIDSsupport.
f.
OngoingHIVsecondgenerationsurveillanceamongFSWsinsixmajorcitiesofPunjab,and
SindhwithUNAIDScollaborationforMDGreporting.
g. OperationalizationofNationalMonitoring&EvaluationframeworkforHIVresponse.
c)NationalProgramforMalariaControl
Malariaisthe2ndmostprevalentanddevastatingdiseaseinthecountryandhasbeenamajor
causeofmorbidityinPakistan.Reductionofmalariaburdeninthecountryisbothanationaland
provincial priority. For next five years (20092013) federal and provincial governments have
allocated Rs. 658.62 million and 1006 million respectively for malaria control activities in
country. Major activity to be undertaken in the forthcoming fiscal year 201011 in particular.
165
WorldBankfundedPC1onNutritioninprocess.
d)NationalT.B.ControlProgramme(NTCP)
The total No of TB cases is 76,668 and the percentage of TB Cases Detection and care rate is
80%. To realize the targets TBDOTS program is now integrated in district health system. The
LHWs, health staff, NGO workers and community volunteers undertake DOTS. Technical
guidelinesandtrainingmodulesareinplace. The government aimsatdevelopingastrategic
plan including expansion of laboratory network; standardization of laboratory equipment and
supplies;developmentofguidelinesforqualityassuranceofsputummicroscopy;establishinga
system annual feedback from the district where TBDOTS interventions are already showing
visibleresultsasindicatedbytherecentreportsofSTOPT.B.
e)NationalProgrammeforPreventionandControlofBlindness
The Programme is in line with VISION 2020 the global initiative of WHO for elimination of
preventablecausesofblindnessbytheyear2020.TheProgrammeaimstoupgradetheexisting
eyecarefacilitiesatthegovernmenthospitalsacrossPakistanthroughprovisionoflateststate
oftheartophthalmicequipmentneededforearlydiagnosisandprompttreatmentofdiseases
leading to blindness. The equipment being provided by the National Programme also includes
Laser Machines (YAG & Argon Lasers) for the DHQ Hospitals, thus making possible the
availabilityofthislatesttreatmentatdoorstepsofpeople.TheProgrammehassofarupgraded
63EyeDepartmentswiththeprovisionoflateststateoftheartophthalmicequipmentallover
Pakistan.Ophthalmicsubspecialtyclinicshave beenestablished atthreeCentresofExcellence
and highly qualified human resource in ophthalmology and allied vision sciences is being
developed at these centres. Furthermore, 72 DHQ hospitals all over Pakistan have been
endowed with YAG Laser and 45 with Green Argon laser equipment thus making Pakistan the
onlycountryintheregiontohavethesefacilitiesatsecondaryleveldistricthospital.
f)NationalProgrammeforFamilyPlanning(FP)&PrimaryHealthCare(PHC)
The programs aims to delivery basic health services at the doorsteps of the poor segments of
the society through deployment of lady health workers (LHV).These workers are providing
services to their communities in the field of child health, nutrition, family planning and
treatmentofminorailment. AllocationforCurrentFiscalYear200910isRs.7,000.000million
and funds Released (July, 2009 to March 2010) Rs. 3,913.277 million. The expenditure July to
February,2010isRs.3,245.153million
Programmeperformanceduringthecurrentfiscalyearinclude;
x 10,000moreLHWswere planned to beselected,trainedandinductedin theProgramme.
ThenumberofLHWsinductedduringcurrentfiscalyearis8,045.
x The4thindependent(ThirdParty)EvaluationoftheProgrammewascompletedwhichwasa
twoyearstudyandsignificantintermsofvalidatingProgrammeimpactandperformance.
g)CancerTreatmentProgramme
PakistanAtomicEnergyCommission(PAEC)hasbeenplayingavitalroleinthehealthsectorby
usingthenuclearandotheradvancedtechniquesfordiagnosisandtreatmentofcancerousand
allied disease .Presently more than 13 Nuclear Medicine & Oncology Centers equipped with
166
HealthandNutrition
excellentfacilitiesareworkingunderPAECandservingwithcontinuouslyintegrateprogramsin
diagnosisofdifferentkindsofcancer/allieddiseases.Majordisciplinesavailableandoperative
in different PAEC nuclear medical centers include the disciplines of Nuclear medicine; Clinical
Oncology; Surgical Oncology; Clinical Laboratories; Radiology; Medical Physics and Bio
Engineering etc. Besides management of the operations of major disciplines in different PAEC
nuclear medical centers, Directorate General of Medical Sciences, PAEC Headquarter is also
working on Human Resource Development Programme. This will provide trained and expert
personnelineachfieldofcancerdiagnosisandtreatment.
h)DrugAbuse
DrugAbuseisWidespreadinoursocietyandhasaffectedPakistaninmayways.Itaddstothe
cost of our already over burdened health care system. Pakistan has a high abuse rate for
opiates.TheUnitedNationOfficeofDrugsandCrime(UNODC)estimatesthat40%oftheheroin
andmorphinetraffickedoutofAfghanistantransitthroughPakistan.
A new Drug Abuse Control Master Plan (201014) has been prepared to meet the growing
challenges.ExpenditureunderthisplanisexpectedtobeRs.10994million,outofwhich25%
willbemetfromGovernmentofPakistanfundswhileremaining75%fromtheforeigndonors
assistance
Objectives of the plane have been defined and achievable targets set with emphasis on both
supply and demand reduction activities A strategy with key objectives as (i) Supply reduction
through strengthening law enforcement. (ii) Control production, trafficking and distribution of
narcotic substance.(iii) Enhance efforts to forfeit druggenerated assets and curb money
laundering(iv)DemandReductionthroughacceleratedinitiativesandreductioninthenumber
ofdrugaddictsthroughprevention,treatmentandrehabilitationmeasures.
Currentlythereare12ongoingprojectswhicharebeingimplementedatthecostofRs.611.013
millionwith296.233millionbyGovernmentofPakistanandRs.315.480millionasforeignaid.
Besides,6newProjectsarealsoapprovedfor200910withtotalcostofRs.67.337million.A
newAntiNarcoticsPolicy2010isunderprocesstoaddresstheprevailingdrugsituationinthe
country. This new Policy outlines a number of objectives targeting supply reduction, demand
reductionandinternationalcooperation.
SeizureofNarcoticDrugs
Seizuresofnarcoticdrugsfortheperiod1stJuly2009to31stDecember,2009isasunder:
Table11.5:SeizureofDrugs
S.No.
KindofNarcotics
1
2
3
4
Opium
Morphine
Heroin
Hashish
QuantityofDrugs
(SeizedinKgs)
26023.689
1661.000
2087.342
206017.337
Source:MinistryofNarcoticsControl
167
11.6FoodandNutrition
Nutritionadequacyisoneofthekeydeterminantofthequalityofhumanresource.Despitetherapid
progressinthetechnologyoffoodproductionandprocessing,malnutritioncontinuetobeamajorarea
of concern for public health. The problem of malnutrition encompasses three macronutrient
deficiencies,Iron,VitaminAandIodine.Theytogethercontributetogreatdealofallhealthandreduced
levelofdevelopmentalactivitiesinchildrenandadults.Thebasiccausesofthesedeficienciesislackof
adequateintakethroughthedietscompoundedbypoorbioavailabilityAdequatedietprovidesgood
nutritionforhealthylifeandhumandevelopment.Millionsofpeoplearoundtheworldaremalnutrition
duetoinadequatedietaryintakeandillness.MalnutritionpersistsinPakistanespeciallyamongyoung
childrenandwomeninthechildbearingagegroups.Itaffectsphysicalandmentalhealth,thusresulting
inpooreducationperformance,lowlabourproductivityandpoverty.Apart,about50%infantandchild
deaths relate to malnutrition. The factors involved in malnutrition are food security, infant and child
feedingpractices,healthcare,watersupply&sanitationandeducationetc.Nutritioninterventionsare
lowcostpreventiveactionandspecificinterventionforfoodsecurityalongwithnutritionalawareness
andsafetynetsarebeingtakentoaddressthenutritionalissues.
Availabilityofmajorfooditemshad beenmaintainedduringthe year.However,theshortfallofsugar
was covered by taking necessary measures to meet the requirements. The average caloric availability
remained around 2441 and protein at 72.9 grams per capita/day against the average requirement of
2350caloriespercapitaperday.Theavailabilityofessentialfooditemsovertheperiodisbrieflygivenin
Table11.6:
Table11.6:FoodAvailabilitypercapita
Year/
200809 200910
Items
194950 197980 198990 199900 200304 200506 200607 200708
units
(E)
(T)
Cereals
Kg
139.3
147.1
160.7
165
150.7
151.4
148.8
166.3
166.1
159.8
Pulses
Kg
13.9
6.3
5.4
7.2
6.1
7.9
7.2
7.2
6.1
7.2
Sugar
Kg
17.1
28.7
27
26.4
33.6
25.3
32.2
31.5
25.6
30.8
Milk
Ltr
107
94.8
107.6
148.8
154
162.6
170.1
172.1
175.2
176.2
Meat
Kg
9.8
13.7
17.3
18.76
18.8
19.7
20.6
20.1
20.8
21.6
Eggs
Dozen
0.2
1.2
2.1
5.1
4.6
5.2
5.4
5.3
5.7
6.0
EdibleOil
Ltr
2.3
6.3
10.3
11.1
11.3
12.7
12.8
13.3
13.4
13.3
Caloriesperday
2078
2301
2324
2416
2381
2386
2349
2470
2456
2441
Proteinperday
62.8
61.5
67.4
67.5
67.8
69.5
69.0
72
72.5
72.9
T:Targets
E:Estimates
a)NutritionactivitiesandPrograms
Primary Health Care (PHC) coveringnutritionalactivitiesby micronutrientsupplementationto
womenofchildbearingage,VitaminAdropsadministeredtochildren6to60months,growth
monitoring,counsellingonbreastfeeding&weaningpracticesandnutritionawarenessthrough
Lady Health Workers (LHWs). Micronutrient Deficiency Control Program through food based
approachesformajor
b)Micronutrientdeficienciesi.e.Iodine,IronandVitaminA&D,arebeingimplementedbythe
privatesectorandcoordinatedbyMinistryofHealth.
a. SaltIodizationinprivatesectorhasbeenstrengthenedinmorethan68districtsalongwith
awarenessmaterial.
168
HealthandNutrition
b. WheatFlourFortificationbeingexpandedto128flourmillsinthecountryandmassmedia
campaignforconsumereducation.
c. Vitamin A & D fortification in vegetable ghee/oil throughout the country which is
mandatory.
c)SchoolNutritionProgramhasbeendesignedasasocialsafetynetandincentivestoimprove
thenutritionalstatusofGovernmentRuralPrimarySchoolgoingchildrenalongwithtoincrease
enrolmentandreducegenderdisparityanddropoutrates.Theprogramisstillunapprovedand
hasprioritytoinitiateinthenextyear.
d) Food Quality Control System: Reference laboratory for quality has been established at
NationalInstituteOfHealth,Islamabad.
e) Food Support Program: Poor household food support program of Pakistan Baitulmal has
beenintegratedintoBenazirIncomeSupportProgram(BISP)forwidercoveragethroughoutthe
country.
f)FoodSecurity:SpecialProgramforfoodsecurityandproductivityenhancementisbeingrun
bytheMinistryofFoodandAgriculturetomeetfoodrequirementandconsumptiondemandof
thepeople.
169
TABLE 12.1
NATIONAL MEDICAL AND HEALTH ESTABLISHMENTS, Progressive (Calendar Year Basis)
(Number)
BHUs
Sub
Health
Centres
..
3
..
..
..
..
..
..
..
..
..
249
249
255
290
373
536
544
554
645
736
774
1,587
1,982
2,366
2,647
2,902
3,150
3,454
3,818
4,213
4,414
4,526
4,663
4,902
4,986
5,143
5,121
5,155
5,185
5,171
5,230
5,308
5,290
5,301
5,334
5,336
5,349
5,310
5,345
Maternity
& Child
Health
Centres
348
422
449
488
524
554
558
650
650
668
668
668
675
662
690
696
715
726
748
772
812
823
817
794
787
778
773
798
998
1,027
1,050
1,057
1,055
849 *
853 *
859 *
853 *
853 *
852 *
855 *
856 *
879 *
862
907
906
907
906
903
908
906
Population
Total
per
Beds
Bed
1960
342
22,394
2,038
1961
345
22,394
2,063
1962
361
22,775
2,087
1963
365
23,429
2,088
1964
365
23,664
2,126
1965
379
25,603
2,022
1966
389
26,200
2,033
1967
391
27,291
1,678
1968
398
27,112
2,079
1969
405
27,618
2,100
1970
411
28,976
2,061
1971
495
34,077
1,804
1972
496
35,337
1,792
1973
521
35,655
1,848
1974
517
35,866
1,893
1975
518
37,776
1,852
1976
525
39,129
1,843
1977
528
40,518
1,834
1978
536
42,469
1,804
1979
550
44,367
1,779
1980
602
47,412
1,716
1981
600
48,441
1,752
1982
613
50,335
1,735
1983
626
52,161
1,723
1984
633
53,603
1,724
1985
652
55,886
1,699
1986
670
57,709
1,689
1987
682
60,093
1,666
1988
710
64,471
1,593
1989
719
66,375
1,587
1990
756
72,997
1,444
1991
776
75,805
1,425
1992
778
76,938
1,464
1993
799
80,047
1,443
1994
822
84,883
1,396
1995
827
85,805
1,416
1996
858
88,454
1,407
1997
865
89,929
1,418
1998
872
90,659
1,440
1999
879
92,174
1,448
2000
876
93,907
1,456
2001
907
97,945
1,427
2002
906
98,264
1,454
2003
906
98,684
1,479
2004
916
99,908
1,492
2005
919
101,490
1,483
2006
924
102,073
1,508
2007
945
103,285
1,544
2008
948
103,037
1,575
2009
968
103,708
1,592
.. : Not available
Source: Ministry of Health
* : The decrease in MCH since 1993 as against last year is due to exclusion/separation of family welfare centres from MCH
structure in NWFP
Year
Hospitals
Dispensaries
1,195
1,251
1,374
1,514
1,626
1,695
1,754
1,834
1,751
1,846
1,875
2,136
2,137
2,566
2,836
2,908
3,063
3,220
3,206
3,367
3,466
3,478
3,459
3,351
3,386
3,415
3,441
3,498
3,616
3,659
3,795
3,993
4,095
4,206
4,280
4,253
4,513
4,523
4,551
4,583
4,635
4,625
4,590
4,554
4,582
4,632
4,712
4,755
4,794
4,813
Rural
Health
Centres
..
1
..
..
..
..
..
..
..
..
..
87
87
90
102
134
173
186
200
211
217
243
283
302
319
334
349
383
417
448
459
465
470
485
496
498
505
513
514
530
531
541
550
552
552
556
560
562
561
572
TB
Centres
..
18
..
..
..
..
..
..
..
..
..
79
82
84
89
89
95
95
95
98
98
99
98
98
96
100
101
104
211
211
220
219
228
233
242
260
262
262
263
264
274
272
285
289
289
289
288
290
293
293
TABLE 12.2
REGISTERED MEDICAL AND PARAMEDICAL PERSONNEL (Progressive) AND
EXPENDITURE ON HEALTH, (Calendar Year Basis)
(Number)
RegisRegisRegisRegisterRegisterYear
tered
tered
tered
ed Mided Lady
Population per
Expenditure(Mln. Rs)^*
Doctors Dentists
Nurses
wives
Health
DevelopNon-Deve***
***
***
Visitors
Doctor
Dentist
ment
lopment
1961
612
..
..
..
..
75,470
..
21.13
69.00
1962
797
2
..
..
..
59,636
..
34.10
78.00
1963
1,049
17
..
..
..
46,615
..
34.55
80.00
1964
1,325
81
..
..
..
37,970
..
75.22
78.00
1965
1,591
151
..
..
..
32,533
..
46.47
84.00
1966
2,008
195
..
..
..
26,524
..
35.31
86.00
1967
2,588
233
..
..
..
21,170
..
70.80
92.00
1968
2,668
273
..
..
..
21,128
..
59.79
99.00
1969
3,322
332
..
..
..
17,459
..
67.99
128.00
1970
3,913
384
..
..
..
15,256
155,468
61.70
151.00
1971
4,287
446
..
..
..
14,343
137,870
57.62
141.10
1972
4,802
511
..
..
..
13,190
123,953
95.55
171.90
1973
5,138
549
..
..
..
12,824
120,018
175.67
210.10
1974
5,582
610
946
522
51
12,164
111,311
363.00
278.00
1975
6,018
650
1,985
1,201
118
11,628
107,661
629.10
360.64
1976
6,478
706
2,526
1,637
197
11,133
102,153
540.00
439.20
1977
7,232
733
3,204
2,577
246
10,278
101,405
512.00
558.60
1978
8,041
781
3,892
3,106
341
9,526
98,079
569.00
641.60
1979
9,079
846
4,552
3,594
453
8,695
93,309
717.00
661.89
1980
10,777
928
5,336
4,200
547
7,549
87,672
942.00
794.82
1981
13,910
1,018
6,110
4,846
718
6,101
83,369
1,037.00
993.10
1982
17,174
1,121
6,832
5,482
928
5,087
77,948
1,183.00
1,207.00
1983
20,865
1,222
7,348
6,031
1,144
4,308
73,560
1,526.00
1,564.00
1984
25,633
1,349
8,280
7,078
1,374
3,605
68,490
1,587.00
1,785.12
1985
30,044
1,416
10,529
8,133
1,574
3,160
67,041
1,881.50
2,393.81
1986
34,034
1,558
12,014
10,315
2,144
2,865
62,580
2,615.00
3,270.00
1987
38,580
1,636
13,002
11,505
2,384
2,594
61,180
3,114.41
4,064.00
1988
42,862
1,772
14,015
12,866
2,697
2,396
57,963
2,802.00
4,519.00
1989
47,289
1,918
15,861
13,779
2,917
2,228
54,927
2,681.00
4,537.00
1990
52,862
2,068
16,948
15,009
3,106
2,082
52,017
2,741.00
4,997.00
1991
56,546
2,184
18,150
16,299
3,463
1,993
50,519
2,402.00
6,129.65
1992
61,017
2,269
19,389
17,678
3,796
1,892
49,850
2,152.31
7,452.31
1993
63,976
2,394
20,245
18,641
3,920
1,848
48,508
2,875.00
7,680.00
1994
67,167
2,584
21,419
19,759
4,107
1,803
46,114
3,589.73
8,501.00
1995
70,670
2,747
22,299
20,910
4,185
1,455
44,478
5,741.07
10,613.75
1996
75,201
2,933
24,776
21,662
4,407
1,689
42,675
6,485.40
11,857.43
1997
79,437
3,154
28,661
21,840
4,589
1,636
40,652
6,076.60
13,586.91
1998
83,661
3,434
32,938
22,103
4,959
1,590
38,185
5,491.81
15,315.86
1999
88,082
3,857
35,979
22,401
5,299
1,578
35,557
5,887.00
16,190.00
2000
92,804
4,165
37,528
22,525
5,443
1,529
33,629
5,944.00
18,337.00
2001
97,226
4,612
40,019
22,711
5,669
1,516
31,579
6,688.00
18,717.00
2002
102,611
5,058
44,520
23,084
6,397
1,466
29,405
6,609.00
22,205.00
2003
108,130
5,531
46,331
23,318
6,599
1,404
27,414
8,500.00
24,305.00
2004
113,273
6,128
48,446
23,559
6,741
1,359
25,107
11,000.00
27,000.00
2005
118,062
6,734
51,270
23,897
7,073
1,310
25,297
16,000.00
24,000.00
2006
123,169
7,438
57,646
24,692
8,405
1,254
20,839
20,000.00
30,000.00
2007
128,076
8,215
62,651
25,261
9,302
1,245
19,417
27,228.00
32,670.00
2008
133,956
9,012
65,387
25,534
10,002
1,212
18,010
32,700.00
41,100.00
2009
139,555
9,822
69,313
26,225
10,731
1,183
16,814
37,860.00
41,000.00
.. : Not available
Source: 1. Ministry of Health
^* : Expenditure figures are for respective financial years 2009 = 2009-10
2. Planning & Development Division
*** : Registered with Pakistan Medical and Dental Council and Pakistan Nursing Council
Note : Data regarding registered number of Doctors/Dentists is vulnerable to few changes as it is affected by change of province or if there
is any change in registration status from time to time
TABLE 12.3
DATA ON EXPANDED PROGRAMME OF IMMUNIZATION VACCINATION PERFORMANCE (0-4 YEARS),
(Calendar Year Basis)
Vaccine/doz
B.C.G.
POLIO
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
5,582,202 4,995,429 5,070,031 4,777,166 5,114,865 4,862,494 5,203,061 5,364,136 5,790,371 5,884,435 6,133,378
0 2,031,138
I 5,253,847
II 4,558,892
III 4,131,112
IV
BR
57,204
1,787,968
4,581,262
4,026,744
3,811,685
1,734,707
4,583,673
4,079,328
4,023,674
-
460,488
1,842,279
4,543,243
4,014,687
3,780,170
-
226,529
2,132,474
4,819,735
4,281,717
4,035,457
-
138,207
2,352,552
4,512,848
4,098,187
3,916,351
-
105,640
2,625,604
4,858,592
4,387,392
4,159,987
-
77,721
2,846,229
5,250,568
4,869,878
4,738,953
-
49,428
3,098,116
5,645,107
5,178,706
5,070,490
-
33,007
3,428,749
5,556,128
5,034,410
4,819,065
-
46,615
3,650,026
5,884,871
5,402,701
5,277,352
-
60,917
35,842
COMBO
I
II
III
- 3,999,759 5,071,729
- 3,720,089 4,612,518
- 3,656,495 4,356,169
D.P.T
I 5,070,103 4,693,198 4,688,768 4,558,086 4,768,665 4,427,751 4,581,347 5,275,075 1,710,723
II 4,530,162 4,140,534 4,175,545 4,038,630 4,227,754 4,025,465 4,126,599 4,886,576 1,523,243
III 4,273,184 3,918,198 4,112,538 3,795,573 3,982,974 3,839,571 3,918,794 4,756,441 1,479,364
BR 169,623
44,768
46,518
22,626
5,959
2,418
105
284
55
H.B.V
I
II
III
- 1,772,217 4,482,628 4,212,720 4,458,183 5,053,306 1,617,799

- 1,290,550 3,892,582 3,879,701 4,065,343 4,692,279 1,441,447
- 965,850 3,576,321 3,616,543 3,840,703 4,571,006 1,401,189
Pentavalent
I
II
III
- 5,924,991
- 5,461,294
- 5,338,521
T.T
I 4,282,256 4,091,473 4,179,310 4,678,265 3,590,786 3,391,488 4,539,131 4,069,365 3,877,897 4,307,085 4,919,757
II 3,324,650 3,273,906 3,286,376 3,539,711 2,969,663 2,649,564 2,857,932 3,133,454 3,048,345 3,384,967 3,791,733
III 1,056,394
928,086
868,820 1,278,078 1,423,277
765,268
793,128
894,639
810,023
865,694
937,769
IV 484,999
318,464
310,995
310,448
337,968
292,941
519,086
286,368
239,055
279,024
284,879
V 308,483
152,336
163,747
159,402
163,699
131,888
157,382
176,530
141,288
152,080
168,861
MEASLES
4,794,410 4,277,466 4,546,632 4,105,614 4,163,032 4,124,958 4,387,211 5,050,347 5,386,101 5,277,766 5,297,362
II
- 1,806,309
- : not available
D.P.T : Diphteira+Perussia+Tetanus
Source: Ministry of Health
B.C.G. : Bacilus+Calamus+Guerin
T.T. : Tetanus Toxoid
Note : The DPT from the year 2007 onward has discontinued and is replaced by Combo - a combination of DPT and HBV
TABLE 12.4
DOCTOR CONSULTING FEE IN VARIOUS CITIES
Period
November
"
"
"
"
"
"
"
"
"
"
73
74
75
76
77
78
79
80
81
82
83
Faisalabad
10.00
15.00
20.00
20.00
20.00
20.00
40.00
40.00
70.00
30.00
50.00
Gujranwala
10.00
15.00
15.00
20.00
20.00
20.00
20.00
32.00
32.00
32.00
..
Hyderabad
10.00
20.00
20.00
23.75
28.75
32.14
33.75
35.00
36.00
50.00
58.75
Islamabad
15.00
18.75
20.00
23.75
35.00
22.50
..
50.00
50.00
60.00
60.00
Karachi
Lahore
15.00
20.00
25.00
27.75
25.00
34.00
48.00
54.44
60.00
60.00
60.00
10.00
15.00
15.00
17.50
20.00
20.00
28.33
47.50
47.50
50.00
50.00
Peshawar
20.00
20.00
20.00
23.13
25.00
33.13
35.00
37.50
50.00
12.00
12.00
Quetta
10.00
17.50
25.00
28.13
35.00
40.00
35.00
37.50
32.50
37.50
37.50
Rawalpindi
15.00
20.00
22.50
27.19
35.00
35.00
45.00
50.00
50.00
50.00
50.00
Sukkur
(In rupees)
Average
10.00
16.00
17.50
20.00
20.00
20.00
35.00
35.00
25.00
40.00
50.00
12.50
17.73
20.00
23.12
26.38
27.68
32.01
41.89
45.30
42.15
42.83
AVERAGE DOCTOR CALL FEE IN VARIOUS CITIES

"
84
"
85
"
86
"
87
"
88
"
89
"
90
"
91
"
92
"
93
"
94
"
95
"
95
"
97
"
98
"
99
"
2000
"
2001
"
2002
"
2003
"
2004
"
2005
"
2006
"
2007
"
2008
"
2009
" : Not available
20.00
20.00
20.00
20.00
20.00
48.33
51.67
42.00
31.67
32.54
32.50
37.50
30.00
35.00
35.00
35.00
40.00
40.00
40.00
40.00
41.25
41.25
41.25
43.75
75.00
75.00
20.00
32.00
32.00
32.00
32.00
32.00
32.50
32.50
32.50
43.75
40.00
40.00
40.00
40.00
40.00
40.00
40.00
40.00
50.00
50.00
50.00
50.00
50.00
50.00
65.00
65.00
45.00
55.00
55.00
55.00
50.00
50.00
50.00
50.00
66.67
80.00
65.00
65.71
53.00
46.25
33.75
33.75
33.75
33.75
30.00
31.25
33.00
33.75
33.75
50.00
50.00
50.00
55.00
50.00
50.00
26.25
26.25
26.88
26.88
27.50
27.50
27.50
27.50
27.50
32.50
32.50
33.44
33.44
33.13
33.13
33.13
45.00
45.00
46.25
55.00
55.00
75.00
75.00
36.11
30.00
26.39
26.70
26.54
25.91
26.54
27.09
26.49
28.85
31.00
32.24
31.88
31.88
31.60
32.17
32.40
33.00
35.00
36.35
36.25
38.08
41.73
55.00
80.00
93.85
10.00
15.63
45.00
50.00
50.00
34.67
10.00
20.00
45.00
50.00
35.00
34.70
14.17
20.00
45.00
50.00
30.00
34.26
24.29
20.00
46.25
25.42
30.00
30.59
24.29
20.00
67.00
25.42
30.00
32.15
24.29
20.00
67.00
25.42
30.00
34.98
30.00
22.50
57.00
25.83
35.00
35.79
24.64
22.50
60.00
26.67
40.00
35.29
24.64
22.50
52.50
29.17
75.00
38.86
27.14
27.50
52.50
29.17
75.00
42.40
24.64
30.00
82.50
29.17
70.00
43.23
30.00
30.00
90.00
30.00
75.00
45.79
27.86
30.00
80.00
30.00
55.00
41.02
27.86
30.00
80.00
30.83
60.00
41.43
33.21
30.00
107.50
30.00
30.00
40.45
33.93
30.00
107.50
31.25
30.00
40.75
38.93
30.00
107.50
32.92
30.00
41.86
41.96
43.33
107.50
33.75
30.00
43.64
41.25
43.33
95.00
33.96
30.00
43.17
41.96
50.00
100.00
38.75
30.00
46.33
41.96
50.00
100.00
38.75
30.00
46.62
44.29
50.00
100.00
42.08
30.00
47.57
52.68
50.00
100.00
43.75
50.00
51.81
52.68
50.00
120.00
43.75
75.00
59.52
63.21
100.00
130.00
61.67
75.00
77.49
68.93
100.00
120.00
61.67
75.00
78.45
Source: Federal Bureau of Statistics, Monthly Statistical Bulletins
12
CapitalMarkets
Atotalof650companieswerelistedontheKarachiStockExchange(KSE)asofendMarch2010,with
PaidupcapitalofRs.894.2billion.AggregatemarketcapitalizationasatendMarch,stoodatRs.2,890
billion (US$ 35 billion). Market capitalization to GDP is currently just under 20%, which is low by
comparisonwithmanycountriesinPakistanspeerreferencegroup.
July to March FY10, the period under review, saw a
recovery phase in the countrys premier capital
market. Thebenchmark KSE100indexrose33%, in
linewiththebroadrecoveryinglobalequitymarkets.
From its recent trough in January 2009, attained in
the aftermath of the floor imposition at the KSE in
late2008,theKSE100indexisup107%.Aninfluxof
foreignportfolioinvestmentduringtheJulytoMarch
FY10period,withinflowscrossingUS$440millionat
their peak, have powered the index, but volumes
tradedremainafractionoftheperiodpriorto2008.
Alargepartofthedryingupofliquidityinthemarket
istheabsenceofleveragedproducts.
Table 12.1: EQUITY MARKET DEVELOPMENT (KSE)

200910(asofMarch31)
%
MarketcapitalizationtoGDP
19.7
Paidupcapitalasa%ageofGDP
6.0
StockMarketturnovertopaidupcapital
3.7
NumberoflistedcompaniesatKSEasa
1.2
%ageoftotalregisteredcompanies.
Source:EAWing,KSE,SECP
12.1GlobalEquityMarkets
Fiscalyear200910startedwithhopeofrecoveryfromtheglobalfinancialcrisis.Therecoveryafterthe
financialcrisiswasfragileatitsonsetwithsignsthattheworldsmarketswouldrecoup,butthesewere
weakandvulnerable.Centralbanksreactedquicklywithexceptionallylargeinterestratecutsaswellas
unconventionalmeasurestoinjectliquidityandsustaincredit.Theglobaleconomyexpandedforsome
timebutitseffectonemploymenthasnotyetbeenseen.
Thevulnerabilityoftheglobaleconomicrecoveryaswellasofthebullruninworldfinancialmarketshas
beenunderscoredbytheonsetoftheGreekdebtcrisis.Globalcommoditiesandequitieshaveseena
sharpselloffsince early May. US marketsplummetedon6th May2010withtheDow JonesIndustrial
Averagefallingnearly1,000points,inwhathasbeendubbedtheflashcrash.Marketsremainwobbly
despitethesizeoftheemergencypackageputtogetherbytheEurozonecountriesforGreece.
Table12.2showstheperformanceoftheglobalandregionalmarketssinceMay2009,asmeasuredby
theMSCIBarraPriceIndexwhichmeasuresthepriceperformanceofmarkets.Itmeasuresthesumof
thefreefloatweightedmarketcapitalizationpricereturnsofallitsconstituentsonagivenday.
171
Table12.2:PERFORMANCEOFEMERGINGMARKETS
MSCIIndex
EM(EMERGINGMARKETS)
EMASIA
EMEASTERNEUROPE
EMEUROPE
EMEUROPE&MIDDLEEAST
EMFAREAST
EMLATINAMERICA
28thMay2010
917.047
374.527
189.71
425.326
361.569
323.02
3,680.22
(InUSD)
28thMay2009
%agechange
761.744
20.39
315.214
18.82
160.998
17.83
348.236
22.14
295.175
22.49
274.201
17.80
3,000.08
22.67
Source:www.MSCIBarra.com
12.2PerformanceofKSE
Mainlyonthebackofforeignbuying,theKSE100indexhasrisen74percentsinceitstroughinJanuary
2009.Evenaftertherecentselloffinequities,theKSE100indexhasgained33%sincethestartoffiscal
year200910.Foreignportfolioinvestment(FPI)intheKSEhasrisensharplyforJulytoMarch200910.
AccordingtoNationalClearingCompanyofPakistanLimited(NCCPL)data,thecumulativenetinflowof
foreignportfolioinvestmentincreasedbyUS$431million.
The other positives during 200910 to which equity investors have responded have included the
restoration of macroeconomic stability following the balance of payments crisis of 2008; the IMF
program (signed in November 2008) having remained on track for over a year; the upgrading of
PakistanssovereignratingbyStandardandPoors,andtherevision,tostable,ofPakistansoutlookby
Moodys,bothinAugust2009;andthesemblanceofagrowthrecoveryintheeconomy,forlargescale
manufacturinginparticular,despitethechallenges.
Onthebackofthenetbuyingbyoffshoreinvestors,theKSE100indexcrossedthe10,000markon12th
March2010afteraperiodof18months.
Table12.3:ProfileofKarachiStockExchange
NumberofListedCompanies
NewCompaniesListed
FundMobilized(Rsbillion)
ListedCapital(Rsbillion)
TurnoverofShares(billion)
AverageDailyTurnoverofShares(million)
AggregateMarketCapitalization(Rsbillion)
200506
200607
200708
658
14
41.4
496
79.5
348.5
2,801.2
658
16
49.7
631.1
54
262.5
4,019.4
652
7
62.9
706.4
63.3
238.2
3,777.7
200910
(JulMar)
651
650
8
5
44.9
98.7
781.8
894.1
28.2
33.1
115.6
179.9
2,143.2
2,890.0
Source:KSE
200809
ImportantMeasuresTakenatKSEin2009
x IntroductionofcorporateBondsAutomatedTradingSystem.
x DataVendingandLaunchofMobileKSEAutomatedTradingSystem(mKats)
x Implementation of internationally accepted industry classification Benchmark a jointly
developed.
x ClassificationsystemlaunchedbyFTSEGroupandDowJonesIndex.
172
CapitalMarkets
x RiskManagement.
x IntroductionofClientLevelMarginingRegime.
x RestructuringofNetCapitalBalancerequirement.
x PresettlementmechanisminReady&DeliverableFutureContractMarket.
x IntroductionofExposureDropoutFacilityduringTradingHours.
x IntroductionofClientwisecashdepositsallocationagainstexposuremarginandlosses.
x ChangeinPenaltyrequirementonNetCapitalBalanceCertificate.
12.3ForeignInvestment
After massive outflows in 2H 2008, foreign portfolio investment made a strong comeback in 200910.
The net portfolio investment during July 2009March 2010 stood at $431.93 million in Pakistan,
accordingtoNCCPL.
Asaresult,fromanaverageof9percentin2009theshareofoverseasinvestmentintotalvolumesat
thelocalboursesincreasedto15percentinMarch2010.Duringtheperiod,benchmarkKSE100Index
hasgained38per cent (33percentin US$ terms). However,since theendofApril,sellingbyforeign
investorshasreappeared,inlinewiththeretrenchmentwitnessedinglobalfinancialmarketsfollowing
theeruptionoftheGreekdebtissue.
Table12.4:FOREIGNPORTFOLIOINVESTMENT(FPI)
14thMay2009
INVESTOR
MARKETTYPE
USDOLLAR
FOREIGN
REGULAR
15,179
INDIVIDUAL
TOTAL
15,179
FOREIGN
REGULAR
590,063
CORPORATES
TOTAL
590,063
OVERSEAS
REGULAR
3,273
PAKISTANI
FOREIGN
CORPORATES
OVERSEAS
PAKISTANI
TOTAL
3,273
GRANDTOTAL
608,515
Source:NCCPL
INVESTOR
FOREIGN
INDIVIDUAL
OVERSEAS
PAKISTANI
14th May2010
MARKETTYPE
USDOLLAR
REGULAR
695
TOTAL
695
REGULAR
1,497,463
TOTAL
1,497,463
REGULAR
42,412
FUTURE
CONTRACT
(8,511)
TOTAL
33,900
GRANDTOTAL
1,532,058
Source:NCCPL
12.4CorporateProfitability
Corporate profitability has declined dramatically since 2006 (Fig 12.1). After tax profits for the
companieslistedontheKSEhaveshrunk77%between2006and2009.Incomparisonto2008,profits
aftertaxdeclined67%in2009,reflectingtheimpactofadifficultoperatingenvironment.Adisturbed
law and order situation in the country, a balance of payments crisis, and the resultant Rupee
depreciation of over 20%, and the energy crisis have all combined to diminish profits. The inter
corporatedebtissueintheenergysectorhashittheotherwisemostprofitablelistedsectorparticularly
hard.
173
Since corporate profitability has a large bearing on

future investment decisions, the sharp contraction
in profits of listed companies over the past few
years can partly explain the subdued investment
responsesince2008.
400
350
300
Rs.billion
Profitability is concentrated in a few large

companies in the Energy, Telecoms and Banking
sector(seeFig12.2).Concentrationhasaneffectof
distortion on the profit calculations. Comparing the
lossaswellasprofitmakingcompaniesin2008and
2009 it can be observed that the decline in profit
making companies was 54 (17%) while 21 (9.1%)
morecompaniesreportedlosses.
Fig12.1:Corporateprofitability(200510)
250
200
150
100
50
0
2005
2006
2007
2008
2009
Source:KSE
100%
Fig12.2:ProfitsbySectorin2009
Textile
Sugar
Misc.
Paper
Chemicals
Trans&comm
Auto&Allied
Cable&Elect
Banks&Fis
Cement
Engineering
Fuel&Energy
10
10
20
30
40
50
Source:KSE
Table12.5:CompaniesListedonKSEandtheirBeforeTaxProfits
ProfitBefore
No.of
Taxation
S.
Companies
Sector
(Rsbillion)
No.
2008
2009
2008
2009
Cotton&other
1
209
208
7.88
6.5
Textiles
Chemical&
2
34
34
10.03
14.82
Pharmas
3
Engineering
13
13
2.19
1.12
4
Auto&Allied
25
25
9.09
4.7
Cables&Electric
5
9
9
3.30
2.74
Goods
6
Sugar&Allied
37
37
0.45
2.95
7
Paper&Board
10
10
0.35
4.6
8
Cement
21
21
4.29
6.96
9
Fuel&Energy
27
27
182.32
117.48
Dividend
Paying
Companies
2008
2009
ProfitMaking
Companies
LossMaking
Companies
2008
2009
2008
2009
37
34
69
61
96
94
20
19
26
22
10
6
11
6
12
8
18
6
13
2
4
2
8
11
4
2
15
3
3
21
6
6
25
5
12
15
3
15
10
4
9
17
13
18
17
174
CapitalMarkets
Table12.5:CompaniesListedonKSEandtheirBeforeTaxProfits
ProfitBefore
No.of
Taxation
S.
Companies
Sector
(Rsbillion)
No.
2008
2009
2008
2009
Dividend
Paying
Companies
2008
2009
ProfitMaking
Companies
LossMaking
Companies
2008
2009
2008
2009
10
Transport&Comm.
14
15
44.69
4.69
11
Bank&Fin.
Institutions
169
169
90.06
55.66
78
40
90
55
55
71
12
Miscellaneous
85
88
44.64
46.09
37
31
50
41
19
27
653
656
301.32
255.3
231
186
323
269
230
251
Total
Source:KSE
12.5PrimaryMobilizationatTheKSE
As shown in Table 12.6, banks have historically played a much larger role in primary mobilization in
Pakistanascomparedtothecapitalmarkets,withtheexceptionoftheprevioustwoyears.Therisein
creditdisbursedbybanksismorepronouncedfrom200203onwardsduetobankingsectorreforms,in
conjunctionwithanumberofotherfactors.Someoftheseinclude:
x Listing requirements and cost of issuance has been fairly significant, making borrowing from
banksacheaperoption.
x Companies prefer to avoid the regulatory burden and greater disclosure associated with
listing.
x Fearoflossofmanagementcontrol
Table12.6:PrimaryMobilization
Newcapital
Year
raised/issued
(Rs.Inbillion)
200405
123.7
200506
71.1
200607
119.2
200708
105.4
200809
101.4
200910*
252.8
*JulMar
Bankcredit
disbursed
(Rs.Inbillion)
437.8
401.7
365.7
408.4
18.9
147.2
Newcapital
raisedas
a%ageofGDP
1.9
0.9
1.3
1.0
0.8
1.7
Bankcredit
disbursedas
a%ageofGDP
6.7
5.2
4.2
3.9
0.14
1.0
Sources:SBP,EAwing.
12.6IslamabadStockExchange(ISE)
Atpresentthereare118membersofISEoutofwhich104arecorporatebodiesincludingcommercial
and investment banks, Development finance institutions (DFIs) and brokerage houses. The other 18
Members are individual persons. The average daily turnover has now crossed the figure of 1 million
shares.TheISE10indexbeganthefiscalyearat1715.53pointsandendedthethirdquarterat2442.39
points.
175
Table12.7:ProfileofIslamabadStockExchange
NewCompaniesListed
FundMobilized(Rs.billion)
ListedCapital(Rs.billion)
ISEIndex
:Notavailable
200506
200607
200708
200809
240
6
5.2
374.5
0.4
2,633.9
2,101.6
246
12
30.7
488.6
0.2
2,716
3,060.6
248
7
24.6
551
0.6
2,749.6
2,872.4
261
15
24.8
608.6
0.3
1,713
1,705.1
200910
(JulMar)
242
1
61.6
0.20
2,330
Source:ISE
12.7LahoreStockExchange(LSE)
TheLSE25index,whichwas2143.27pointsinJune2008,increasedto3201.2pointsinMarch2009.The
market capitalization of the LSE has reduced from Rs. 1953.087 billion till March 2009 to
Rs.2746.325billion till March2010. Twonew companiesandtwoopenendedfundswerelistedwith
theLSEduringJulyMarch200809,ascomparedto5newcompaniesand11openendedfundsinthe
fiscalyear200910.TotalpaidupcapitalwiththeLSEincreasedfromRs.721.064billionin200809to
Rs. 827.482 billion in March 2009. The average daily turnover of shares on the exchange during July
March200910was2.51billion.Itwas8.16theyearbefore.
Table12.8:ProfileofLahoreStockExchange
NewCompaniesListed
FundMobilized(Rsbillion)
ListedCapital(Rsbillion)
LSEIndex
200506
200607
200708
200809
518
7
24.5
469.5
15
4,379.3
2,693.3
520
10
38.8
594.6
8.2
4,849.9
3,859.8
514
2
29.7
664.5
6.5
3,868.8
3,514.2
511
9
32.8
728.3
2.7
2,132.3
2,018.2
200910
(JulMar)
509
5
42.3
827.4
2.5
3,201.20
2,746.3
Source:LSE
The total funds mobilized during JulyMarch 200910 in the three stock exchanges (KSE, LSE & ISE)
amounted to Rs. 252.78 billion, The total turnover of shares in the three stock exchanges during the
periodwas36.65billion.
12.8DebtCapitalMarkets
Thedebtcapitalmarketsconsistsoftheprimaryissuanceandsecondarytradingofallbondsandfixed
income securities issued by the Government and private sector, as well as, for the purposes of this
discussion,instrumentsofNationalSavings.
12.81PakistanInvestmentBonds(PIBs)
Pakistan Investment Bonds (PIBs) form a big chunk of Government securities. They provide the
governmentwithlongtermmaturitydebt.SBPheldfiveauctionsofPIBsinFY07,seveninFY08andfour
in FY09. The PIB portfolio was expanded in FY09 with the inclusion of a 7 years paper while rises in
176
CapitalMarkets
discountratescausedrevisionofcouponrates.
Within the Permanent debt, PIB retained its
dominant share. The breakup of domestic debt
servicing data reveals that interest payments on the
permanentdebtincreasedsignificantlyduringJulJan
FY10 compared to same period last year. This
increasewaslargelyduetointerestpaymentson10
yearPIBs,inlinewithitsincreasingshareinthetotal
outstandingstockofPIBs.
Table 12.9: PIB CouponRatesforFY10(Dec 09)

Previous
Current
Tenor
couponRate
CouponRate
(at30Jun09)
3Years
11.25%
11.25%
5Years
11.50%
11.50%
7Years
11.75%
11.75%
10Years
12.00%
12.00%
15Years
12.50%
12.50%
20Years
13.00%
13.00%
30Years
13.75%
13.75%
Source:SBP
The government raised Rs 8.67 billion through

auction of Pakistan Investment Bonds (PIBs) on
March17,2010increasingtheyieldon10yearPIBto
12.75 percent from 12.53 percent. It raised Rs 6.06
billionthroughthesaleof10yearbond,Rs1.28billionthroughthreeyearbond,Rs.1.09billionthrough
fiveyearbondandRs240millionthroughsevenyearbond.Forthethree,fiveandsevenyearbonds,
thecutoffyieldswereraisedto12.49percentfrom12.30percent,12.59percentfrom12.40percent
and12.70percentfrom12.50percent,respectively.
Table12.10:InterestRateStructure,FY200809
Tenors
3Years
5Years
7Years
10Years
31stDec'08
(%)
31stApr'09
(%)
13.70
10.80
14.34
14.55
12.94
12.95
13.14
13.24
Variance
(H2FY09)
bps
76
215
120
131
3Sep09
%
11Nov09
%
12.29
12.36
12.45
12.5
12.26
12.40
12.42
12.44
Variance
(H1FY10)
bps
0.03
0.04
0.03
0.06
Source:SBP
FromJanuarytoJune09Sukukbondsworth19,275Rs.millionwereissuedwhilefromJulytoDecember
09thefigurewas22,076Rs.millionmakingthetotalRs.million41,351.
Table12.11:3YearIjaraSukukAuctionsResultForFY10
Date
Jul08Jun09(201208)
Jul08Jun09(040309)
JulDec09(05102009)
Total
Target
Offered
Amount
Accepted
Amount
Cutoff
Margin
10
10
10
40
7.35
21.43
30.38
59
6.00
15.33
14.4
42
+75bps
+0bps
5bps
(Rs.billions)
Varianceof
Acceptance
againstTarget
4.00
+5.33
4.40
2
Source:SBP
Bankstendedtonegotiatehigherratesongovernmentguaranteeddebtinthewakeoflowliquidityin
the system, in addition to concern about concentration of exposure. Hence, the first issuance of the
TermFinanceCertificate(TFC)inMarch2009waspricedatKIBORplus1.75percent,whilethesecond
issuanceinSeptember2009wasatKIBORplus2percent.Similarly,theratesforfinancingcommodity
177
operations were around KIBOR plus 2.5 to 2.75

percent.
12.82NationalSavingsScheme(NSS)
Table12.12:FloatationofTFCs,July09 March 10
(Rs.billions)
Issue
NameofCompany
Listedat
Size
AlliedBankLtd.
KSE
3.00
AskariBankLtd.
LSE
3.00
EngroChemicalPakistan
KSE
2.50
Ltd.
Total
8.50
Source:SECP
NationalSavingsOrganisationisthebiggestnonbank
borrowing institution for the government, with over
six million account holders investing more than Rs.
1,500billion.SpecialSavingsCertificatesandSpecial
Savings Accounts remained the attractive
instruments for the investor despite the higher
interestrateofferedbyBahboodSavingCertificatesandPensionersBenefitAccount,.
Mobilizationthroughprizebondssawasignificantimprovement.Thiswasmainlyduetothedecisionof
thegovernmenttoincreasetheamountofprizesondifferentdenominationsinFeb2009.Theinterest
paymentsonthematuredstockofDSCsstillconstituteamajorshareinthetotalinterestpaymentson
unfundeddebt.
Withinthepermanentdebt,amajordevelopmentwastheintroductionoffirstevertradableNational
SavingBond(NSB)inJan2010.ThegovernmentwasabletoattractRs3.7billionthroughNSBduringJan
2010. The National Savings bonds (NSBs) are authorized by the Ministry of Finance and backed by a
sovereignguaranteeofthegovernmentofPakistan.TheNationalSavingsBonds(NSBs)markaparadigm
shiftofgovernmentborrowingsfromthebankingsectortothenonbankingsectorthelatterbeing
relativelylessinflationary.TheNSBbondsarerelativelyofasmallsizeofRs.3.6billionatthestart,but
they would extend the outreach of the stock exchanges as they would deepen the domestic debt
market. National Savings Organisation already manages over Rs. 1 trillion of public money in various
savingsschemes.ThecurrentyeartargetforfreshinvestmentissetatRs.240billion.
DebtservicingcostbeingincurredagainstmaturedstockofDSCsformsmorethan50%ofthetotaldebt
servicingcostontheunfundeddebt.Howeveritispertinenttonoteherethattheoutflowintheformof
interest payments on DSC is declining overtime. Also the debt servicing cost of Behbood Saving
Certificates (BSC) and Special Saving Certificates (SSC) increased significantly in the period under
discussion, as the major amount raised against these certificates was issued at significantly higher
interestratesduringFY09.
Table12.13:NetAccrualsinNationalSavingsSchemes
DefenceSavingsCertificates
SpecialSavingsCertificates(R)
SavingsAccounts
SpecialSavingsAccounts
RegularIncomeCertificates
PensionersBenefitAccounts
BahboodSavingsCertificates
NationalPrizeBonds
PostalLifeInsurance
GrandTotal
200405
200506
8.7
83.3
2.9
1.9
40.7
17.7
60.7
9.4
10.3
39.4
7.6
57.7
0.2
0.7
15.6
16.4
59.6
3.3
10.8
8.7
(Rs.billions)
200910
200607
200708
200809
JulyMar
5.8
4.3
(27.4)
(35.07)
7.0
13.8
128.4
51.97
9.2
9.0
(10.9)
(1.2)
6.5
5.5
21.6
29.75
17.0
0.3
40.1
33.93
11.5
18.7
22.2
14.16
47.2
38.8
78.5
45.10
9.0
8.3
14.6
27.32
67.6
89.5
267.1
165.96
Source:CentralDirectorateofNationalSavings
178
CapitalMarkets
TheNSSduringthefirsttenmonthsof200910attractedRs.166billioncomparedtoRs.267billionfor
thewholeoflastyear.Nonbankfinance,especiallyfromNSS,madeitpossibletoarresttheborrowings
fromthebankingsysteminFY10.
12.9InvestorBase
12.91Leasing
Duetoacompetitiveoperatingenvironmentandliquidityproblems,leasingcompanieshaveundergone
significanttransformationinthelastfewyears.Mostvisiblearestructuralchangesintheleasingsector
on account of mergers and amalgamations. During the period JulyDecember, 2009, AlZamin Leasing
Corporation Ltd. was merged with and into Invest Capital Investment Bank Ltd. and ORIX Investment
BankLimitedwasmergedwithandintoORIXLeasingPakistanLimited..DuringtheperiodJuly,2009
March,2010,onehousingcompanywasacquiredbyanothergroupandthreeleasingcompanieswere
mergedwithotherentities.Despiteconsolidations/mergers,therearestillsignificantchallengesforthe
leasingsector.
AsonMarch31,2010therearenine(9)activelicensedleasingcompanies.Themajorfinancialindicators
ofthesectoraresummarizedasunder:
TotalAssets
(Rs.inmillion):
TotalEquity
(Rs.inmillion):
TotalDeposits (Rs.inmillion):
12.92InvestmentBanks
40,266
5,316
3,187
InvestmentBankshavenotbeenabletomakeanysignificantcontributionasprimarilytheyfocusedon
theanalogousfinancialservicesasofferedbytheconventionalbankingsector.InvestmentBankswere
not able to compete owing to their limited access to resource mobilization coupled with low
capitalizationandlimitedbranchnetworkwhencomparedtothecommercialbanksofferingthesimilar
services.Investmentbanksarebeingencouragedforamoreviableandsustainablebusinessmodelto
betiltedmoretowardsofferingofnonfundedi.e.feeandcommissionbased,financialservices
AsonMarch31,2010thereareeight(8)activelicensedinvestmentbanks.
Themajorfinancialindicatorsofthesectoraresummarizedasunder:
TotalAssets
(Rs.inmillion):
TotalEquity
(Rs.inmillion):
TotalDeposits (Rs.inmillion):
12.93MODARABAS
31,499.97
3,358.37
27,616.27
During the last two decades, notwithstanding the challenges of already deeply entrenched interest
basedfinancingsystemandresourcemobilizationconstraints,thesectorhasperformedreasonablywell
and shown a steady growth in the past few years. There is a decrease in the assets of the Modaraba
sector from Rs. 26,626 million as on 30.6.2009 to Rs. 24,397 million as on 31.12.2009. Similarly,
investmentsinthelistedsecuritieshasalsoshownamarginaldeclinefromRs.2,616milliontoRs.1,854
millionfromthecorrespondingperiod.However,thereisaslightincreaseintheequityfromRs.11,334
million (30.6.2009) to Rs. 11,556 million (31.12.2009). It is expected that the financial indicators will
179
improveonthebettermentinthefinancialandeconomicconditionsofthecountry.
The approval and certification by the Religious Board for twelve new Islamic financing agreements
would eliminate disparity and bring Modarabas at a same level with other financial institutions for
resourcemobilization.
The assets of the Modaraba sector stood at Rs. 24,516 million as on 31,03,2010 as compared to
Rs.24,397 million as on 31,12,2009. Similarly, investment in the listed securities was 1,497 million.
MoreovertheequitywasRs.10,779millionason31,03,2010.
AsonMarch31st2010,therewere41,registeredModarabaCompaniesand26Modarabasinexistence.
6 Modarabas are in the process of winding up. The major financial indicators of the sector are
summarizedasunder:
TotalAssets
Totalliabilities
TotalEquity
(Rs.Inmillion)
(Rs.Inmillion)
(Rs.Inmillion)
24.51
13.32
10.77
12.94RealEstateInvestmentTrusts(REITs)
Pakistan has witnessed a property boom in the last decade and the launching of REITs as a new
investment product will: (i) provide retail investors the opportunity to share the dividends from the
robust realestate sector; (ii) facilitate professional developers in undertaking megaconstruction
projects without the traditional liquidity issues that property development companies are confronted
with;and(iii)maximizetheefficiencyofpropertyutilizationbycreatinganequilibriumbetweendemand
and supply of property on the one hand and provide more efficiently managed shared use rental
propertiesontheother.
InMarch2009,theCommissiongrantedtwopermissionstoincorporateREITManagementCompanies
(RMC)inPakistanwhowouldlaunchREITschemesafterobtainingtheprerequisiteapprovalsfromthe
Commission.
12.95PrivateEquity&VentureCapitalFund(PE&VCF)
PrivateEquityandVentureCapitalFund(PE&VCF)isaunlistedclosedendunittrustfundopenonlyto
highnetworthindividualsandinstitutions,duetoitsintrinsicnatureofbeingahighriskassetclass.In
August2008,SecuritiesandExchangeCommissionofPakistanapprovedtheregulatoryframeworkfor
registrationandregulationofPE&VCFundsinPakistan
Unfortunately due to dismal law and order situation and general economic downturn, there has not
beenmuchactivityinthisarea.
12.96VoluntaryPensionSystem
Seven Pension Funds (four Islamic and three conventional) have been launched under the Voluntary
PensionSystemRules,2005.WhiletheseedcapitalgeneratedwasRs.690million,theindustrystoodat
Rs.1,004millionasonDecember31,2009,whiletheindustrywasatRs.1,068billionasonMarch31st,
2010.
180
CapitalMarkets
12.97MutualFunds
MutualFundsmarchedontheroadtorecoveryduringtheperiodJulyDecember,2009withnetassets
showing an increase of 42%, i.e. increasing from Rs. 182 billion in January, 2009 to Rs. 258 billion in
December,2009.Thetotalnumberofmutualfundsstoodat116inDecember,2009comparedto95in
January,2009substantiatinganuptrendintheindustrybothintermsofgrowthinnetassetsaswellas
numberofmutualfundslaunched.Growthwasprimarilyevidencedinthecategoriesofmoneymarket,
income,andcapitalprotectedfunds.Thisshift,however,wasanticipatedespeciallykeepinginviewthe
factthatappetitetowardsriskhadsubduedintheaftermathofthecrisisthatentangledtheindustryin
late2008,effectsofwhichcarriedforwardtillthefirsthalfof2009.Thenetassetsofthemutualfund
industry amounted to Rs 253 billion, as on 28th February 2010* as compared to Rs. 258 billion in
December,2009.Thetotalnumberofmutualfundsstoodat121asatMarch31,2010comparedto116
inDecember,2009substantiatingmarginalgrowthinthenumberofmutualfundslaunched.
Despitetheunprecedentedfinancialturmoil,mutualfundindustryingeneralwithstoodthedownturn
andsuccessfullymanagedmountingredemptionpressurebyrepayinginexcessofRs.90billiontothe
investors.
Table12.14:SnapshotofkeyfinancialsasatMarch31,2010
LeasingCompanies
InvestmentBanks
TotalAssets
39,153
31,289
TotalLiabilities
34,091
27,101
TotalEquity
4,991
4,181
TotalDeposits
3,553
10,808
(Rs.million)
Modarabas
23,016
13,069
9,171
4,151
Source:SECP
12.10CapitalMarketReforms
Thefocusofthereformswastoimproveriskmanagementofthemarket.
The concept of Concentration Margins was introduced, and amendments pertaining to the
implementationof thesame inplace ofspecialmarginsonderivativeproducts,wereapprovedin the
RegulationsgoverningRiskManagementoftheStockExchanges.
Anotherimportantmeasurewasthephasewiseimplementationoftheclientlevelmarginingsystemat
thestockexchangesandthe NCCPL.Thesaidsystemwouldassistineliminating chances ofmisuseof
oneclientsmarginsagainstexposurerequirementsofotherclients.
The Deliverable Futures Contract Market was relaunched in view of the market need for a derivative
product. This relaunch was characterized by measures for revamped risk management of the said
product.
Also, the SECP is facilitating the stock exchanges in exploring avenues for introduction of Index based
Market Halts, which is geared at reducing the risk associated with trading at the stock exchanges by
progressivelyincreasingthecircuitbreakersonindividualscripstherebyallowingthesecuritiesawider
rangeformovement,inlinewithinternationalbestpractices.
12.11DevelopmentalActivities
TheSECP,intheearlierhalfoftheyear2009,hadconstitutednationallevelforumscomprisingofallthe
181
prominentstakeholders.TheConsultativeGroupon CapitalMarketsisacting asanindependentthink

tankforimportantpolicydecisionsinrelationtothedevelopmentofcapitalmarkets.Inthelaterhalfof
the year, the Group submitted its report on Margin Financing, which was to serve as an alternate
leverageproducttocaterforthefinancingappetiteofthemarketafterthediscontinuationofCFSMkII.
Afinalconceptpaper,afterdetaileddeliberationswithallrelevantstakeholders,hasbeensubmittedby
the SECP and the KSE and NCCPL have been advised to develop necessary systems and to formulate
requisiteregulatoryframeworkforthesaidproduct.Thisproductwillbeavailableforbothproprietary
tradeandclientsofbrokeragehouses.TheConsultativeGroupalsosubmitteditsrecommendationswith
respect to a revised brokers regime encompassing the capital adequacy requirements and code of
conductforthebrokers.Animportantfeatureofthesaidregimeisthelinkageitcreatesbetweenthe
capitaladequacyrequirementsofabrokerandhisriskprofile.Thesaidregimeistobeimplementedina
phasedmanner.
In view of the above and the inprinciple approval earlier granted by the SECP to the NCCPL for the
developmentofaSecuritiesLendingandBorrowingmechanism,theSECPiscurrentlyintheprocessof
framingtheSecurities(MarginFinancing,SecuritiesLendingandBorrowingandPledging)Rules,inorder
toprovideabroaderlegalframeworkfortheabovementionedconcepts.
182
TABLE 9.1
NUMBER OF LISTED COMPANIES, FUND MOBILISED AND TOTAL TURNOVER OF SHARES IN VARIOUS
STOCK EXCHANGES
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Jul-Mar
2009-10
KARACHI STOCK EXCHANGE

i) Total Listed Companies
762
747
712
702
668
659
658
658
652
652
650
ii) New Companies Listed
16
15
14
12
0.4
3.6
15.2
23.8
4.2
54.0
41.4
49.7
49.2
42.3
98.7
48.1
29.2
29.1
53.1
97.0
88.3
104.7
68.8
56.9
17.1
33.7
614
581
561
647
524
518
520
514
512
511
18
0.4
2.5
14.2
4.1
3.1
42.1
24.5
38.8
28.1
35.3
92.4
1.6
7.8
18.3
28.2
19.9
17.5
15.0
8.3
5.4
1.5
2.7
281
267
260
251
232
240
246
247
240
242
0.8
3.7
11.5
2.6
27.6
5.2
30.7
28.1
24.8
61.7
3.1
1.4
2.7
2.1
1.4
0.7
0.4
0.3
0.9
0.158
0.2
iii) Fund Mobilized

(Rs billion)
iv) Total Turnover of Shares
(In billion)
LAHORE STOCK EXCHANGE
ii) Fund Mobilized
(Rs billion)
(In billion)
ISLAMABAD STOCK EXCHANGE
ii) Fund Mobilized
(Rs billion)
(In billion)
Source: SECP, KSE, LSE, ISE
TABLE 9.2
NATIONAL SAVING SCHEMES (NET INVESTMENT)
(Rs. Million)
Name of Scheme
1 Defence Savings Certificates

2 National Deposit Scheme
3 Khaas Deposit Scheme
4 Premium Savings Scheme
2001-02
2002-03
22,037.3
21,990.5
7 Regular Income Certificates

8 Pensioners' Benefit Account
9 Savings Accounts
10 Special Savings Accounts
11 Bahbood Saving Certificates
12 Mahana Amdani Accounts
13 Prize Bonds
14 Postal Life Insurance
2006-07
2007-08
(4,317.4) (27,411.3) (35,076.5)
3,238.3
(8,759.1)
(7,551.0)
(6,976.8)
(6.8)
(1.3)
(2.5)
(1.1)
0.0
(12.1)
(13.5)
(23.4)
(5.4)
(2.8)
(5.6)
7.0
(203.3)
11,046.3
(13,199.3) (83,311.9) (57,737.1)
(11.1)
(2.6)
(4.6)
(0.6)
6,667.5
2008-09
(2.7)
0.2
(1.6)
(3.7)
13,800.6 128,469.0
(0.1)
(0.2)
51,975.7
(8.5)
18,369.1
11,468.6
18,695.9
22,215.7
14,163.4
(202.7) 12,825.7
8,989.1
(10,899.2)
(1,257.5)
33,935.7
10,170.0
13,209.3
17,737.2
1,638.1
(729.6)
(2,891.4)
4,266.9
5,135.0
2,894.1
(19,048.0)
(709.6)
9,417.6
5,521.5
21,627.1
29,753.3
22,691.0
60,654.6
59,636.6
47,214.5
38,799.7
78,537.4
45,104.7
16,382.9
(273.5) 40,094.3
(0.3)
(14,923.9) (49,090.5) (40,663.0) (15,563.9)
(329.8)
92.8
129.5
120.9
85.9
45.7
56.9
(25.0)
(50.0)
(172.8)
11,588.0
26,840.1
22,841.9
9,357.0
3,325.8
9,007.3
8,277.1
14,650.0
27,324.2
6,448.3
15 National Savings Bonds

Grand Total
2005-06
(5.7)
84,899.1
Jul-Mar
2009-10
2004-05
(6.3)
5 Special Savings Certificates (R) 36,443.2

6 Special Savings Certificates (B)
2003-04
7,367.7
-
91,371.3
8,668.7
-
143,215.8
Figures in Parenthesis represent negative signs

R : Registered
B : Bearer
- : Not available
10,335.2
-
10,612.0
10,804.5
-
(39,371.6)
8,830.7
71,305.5
3,650.2
89,460.8 267,220.7 169,396.7
Source : Central Directorate of National Savings
TABLE 9.3
MARK UP RATE/PROFIT RATE ON DEBT INSTRUMENTS CURRENTLY AVAILABLE IN THE MARKET
S.No. Schemes
Markup/Profit Rate
Maturity Period
Tax Status
1. Foreign Exchange Bearer Certificate (FEBC)

a. If Certificate of Rs 1000 encashed before 1 year investor will get Rs 1000 (face value)
b. If Certificate of Rs 1000 encashed after 1 year investor will get Rs 1145
Sale under this scheme has
c. If Certificate of Rs 1000 encashed after 2 year investor will get Rs 1310
already been discontinued, from
d. If Certificate of Rs 1000 encashed after 3 year investor will get Rs 1520
December 1999 however, on
e. If Certificate of Rs 1000 encashed after 4 year investor will get Rs 1740
outstanding balance till maturity,
f. If Certificate of Rs 1000 encashed after 5 year investor will get Rs 1990
rate will be applicable
g. If Certificate of Rs 1000 encashed after 6 year investor will get Rs 2310
2. Foreign Currency Bearer Certificate
(FCBC), 5 years
Scheme has already been discontinued w.e.f. February 1999. Only

repayment is made
The rates are effective form Sept. 1999. If bonds are encashed before
one year no profit will be paid. Profit is payable @ LIBOR + 2.00% on
bonds reinvested for 3 years on Special US$ Bonds redeemed against
3 and 7 years maturity. However, the facility of reinvestment has been
discontinued since October 2002.
3. Special US$ Bonds

a) 3 year maturity
b) 5 year maturity
c) 7 year maturity
LIBOR+1.00%
LIBOR+1.50%
LIBOR+2.00%
4. Pakistan Investment Bonds

Tenor
3-Year Maturity
5-Year Maturity
7-Year Maturity
10-Year Maturity
15-Year Maturity
20-Year Maturity
30-Year Maturity
Rate of Profit
11.25% p.a
11.50% p.a
11.75% p.a
12.00% p.a
12.50% p.a
13.00% p.a
13.75% p.a
5. Unfunded Debt
Defence Saving Certificates
12.15% p.a (m)
10 Years
13.00% p.a.
7 Years
National Deposits Schemes
Special Saving Certificates (R)

11.67% p.a
for each of 1st five profit
11.60% p.a.
for the last one porfit
12.00% p.a.
Special Saving Certificates (B)
13.00%
Regular Income Certificates
12.00%
Khas Deposit Scheme
13.42% p.a.
Mahana Amdani Accounts
10.41% p.a.(m)
Saving Accounts
8.50% p.a.
Bahbood Savings Certificate
14.16% p.a.
Pensioners' Benefit Account
14.16% p.a.
Prize Bonds
10.00% p.a.
p.a : Per annum
R : Registered
B : Bearer
m : on maturity
Coupon rate are given for 30th August 2008 issue.
Taxable for deposits exceeding Rs. 150,000

made on or after 01-07-2002
Taxable and discontinued
3 Years
Taxable for deposits exceeding Rs. 150,000

made on or after 01-07-2002
3 Years
5 Years
3 Years
7 Years
Running Account
10 Years
10 Years

Taxable
Taxable for balances exceeding Rs. 150,000
Source: State Bank of Pakistan and

Central Directorate of National Savings
Energy
13
EnergysectorissuesanddevelopmentscontinuedtoseverelyconstrainPakistanseconomyin200910.
Againstabackdropofasharpincreaseintheinternationalpriceofoilthroughcalendar2009,whichput
enormous upward pressure on the cost structure in the power generation (and transport) sector, in
particular,largedomesticsupplyshortagesofelectricityandgasoccurred.Loweraccumulationofwater
reservesindamscompoundedtheseverity.Thecumulativeeffectoftheenergycrisisontheeconomyis
estimatedatupwardof2percentofGDPduring200910alone.
Developmentsoutlinedaboveengenderedanegativefeedbackloopintheelectricitysector,givingrise
totheintercorporatecirculardebtissueinthe entireenergysupplychain. The loweravailabilityof
hydelresourcesforgeneration,andahigherthannormalshortageofgas,skewedthefuelmixofthe
electricity generation sector towards fuel oil. Since this occurred at a time of a doubling of the
international oil price, the effect on the cost structure of the utilities was amplified greatly. With no
changeallowedintheelectricitytariffbetween2003and2007,thecompoundedeffectontheviability
of the energy sector has been devastating. Some idea of the viability gap that had built up in the
electricitygenerationsectorcanbehadfromthefactthat,priortothemostrecenttariffincrease,the
gapbetweenaveragegenerationcostandrecoverywascloseto30percent.
Despiteheftyincreasesinenduserelectricitytariffsoverthepasttwoyears,asignificantgapstillexists
betweengenerationcostandrecovery,dueinlargeparttotheadversedevelopmentsoutlinedabove.
Thisimbalancebetweencostofgenerationanddistribution,andthefinaltariff,istherootcauseof
the circular debt issue, with each downstream player in the energy chain being forced to delay
payments to upstream entities (for fuel supplies). The net effect is a declining effective utilization of
availablegenerationcapacityinthesystem.
ThecumulativeeffecthasbeenthatthegrowthrateofPakistansprimaryenergysupply,whichbegan
decelerating in 200708, has turned negative in 200809 and 200910 (JulyMarch). Final energy
consumptionisestimatedtohavedeclinedby5.3percentduringcalendar2009.
PakistansEnergySector
13.1SupplyofEnergy
Primaryenergysupplyandpercapitaavailabilityofenergywitnessedadeclineof0.64percentand3.09
percent respectively during JulyMarch 200910 over the same period last year (see Table 13.1). This
decrease in the primary energy supply and per capita availability during the first nine months of the
currentfiscalyearishigherthanitsfallinthefullyearof200809whenprimaryenergysupplyandper
capita availability narrowed down by 0.58 percent and 2.27 percent respectively. The fall in energy
supplyduringcurrentperiodcanbeattributedtointercorporatecirculardebtproblem.
183
Table13.1
1:PrimaryEne
ergySupplyand
dPerCapitaA
Availability
Year
EnergyySupply
PerCapitaa
MillionTOE
Change
e(%)
Availability(TOE)
Change(%))
199899
41.72
0.31
199900
43.19
3.51
0.32
1.28
200001
44
4.40
2.8
82
0.32
0.63
200102
45.07
1.50
0.32
1.25
200203
47.06
4.4
41
0.32
2.86
200304
50
0.85
8.0
06
0.34
5.25
200405
55.58
9.26
0.36
6.45
200506
58
8.06
4.18
0.37
2.48
200607
60
0.62
4.33
0.38
2.61
200708
62.92
3.78
0.39
2.86
200809
62.55
0.5
58
0.38
2.27
JulMar
200809
47.1
4
0.29
200910E
46.8
4
0.6
64
0.28
3.09
TOETonsofOilEquivaleent
Source:H
HydrocarbonD
DevelopmentIn
nstituteofPakiistan.
E:estimatted
13.2EnerrgyConsumpttion
During20
00809,Pakisttansfinaleneergyconsump
ptionofabou
ut37.3million
ntonsofoileequivalentareemet
bymixofgas,oil,electtricity,coalan
ndLPGsourceeswiththedifferentlevelsofshares.A
As,theshareo
ofgas
consumpttionstoodat43.7percentintotaleneergymixofccountryduring200809fo
ollowedbyoil29.0
percent, electricity 15
5.3 percent, coal 10.4 peercent and LPG
L
1.5 percent. Furtherm
more, this energy
ngessince20
00304(SeeFFig1andFig2
2).Asaresullt,the
consumpttionmixhas witnessedsiggnificantchan
major con
nsumption so
ources of gas witnessed an increased
d of 9.0 perccentage pointts during 200
0809
compared
dto200304 whileoilcon
nsumptionsharedeclined by9.5perceentagepointsduringthep
period
under revview. These changes in consumption
n of gas and
d oil mainly owed to shiift from imp
ported
expensivee fuel to rellatively cheaper source of gas. Furthermore, the share of coal consum
mption
increased due to its higher prod
duction during the perio
od under reeview. The shifting
s
of energy
consumpttiontowardsindigenousreesourcessaveestheconsiderableamoun
ntofforeignreservedurin
ngthe
period.
Fig-1: Energy Consu
umption by So
ource
(2003-04)
LPG
Electtricity
1.3%
16.2
2%
Fig-2: Energy Co
onsumption by
y Soruce
(20
008-09)
Electricity
15.3%
Oil
%
38.5%
LPG
1
1.5%
Oil
29.0%
Coal
10.4%
Coal
9.3%
Gas
34.7%
3
Gas
43.7%
4
Source:H
HydrocarbonD
DevelopmentIn
nstituteofPakiistan
184
Energy
Duringthelasttenyears(199900to200809),theconsumptionofpetroleumproductshasincreasedby
anaveragerateof0.5percentperannum.Theconsumptionofgas,electricityandcoalhasincreasedat
anaveragerateof6.8percent,5.0percentand12.5percentperannum(seeTable13.2).Thislongterm
trendsuggeststhatcompositionofannualenergyconsumptionisshiftingfrompetroleumproductsto
otherenergysources.
Energyconsumptioninallsourceshaswitnessedanegativegrowthrateduring200809mainlyonthe
backoflowereconomicactivityandcirculardebtproblemduringtheperiod.
Whereas,duetorevivalinthemacroeconomicactivity,theenergyconsumptioninpetroleumproducts,
gas and coal has witnessed a positive growth rates of 8.1 percent, 3.0 percent and 10.0 percent
respectivelyduringJulyMarch200910overthecorrespondingperiodlastyear.Whilethedeclineof1.7
percentinenergyconsumptionofelectricityismainlyowedtocirculardebtproblemduringJulyMarch
200910.
Table13.2:AnnualEnergyConsumption
FiscalYear
PetroleumProducts
Gas
Electricity
Coal
Tonnes
Change
(mmcft)
Change
(Gwh)
Change
M.T*
Change
(000)
(%)
(%)
(%)
(000)
(%)
0708
18,080
7.3
1,275,212
4.4
73,400
0.9
10,111
28.1
0809
17,911
0.9
1,269,433
0.5
70,371
4.1
8,390
17.0
Avg.10years
0.5
6.8
5.0
12.5
JulMar
0809
12,892
931,700
55,614
4,822
0910(e)
13,937
8.1
959,475
3.0
54,653
1.7
5,304
10.0
e:ElectricityconsumptionforAJ&Kisestimatedonthebasisofactualsixmonthsdata
*MillionTonnes
Source:HydrocarbonDevelopmentInstituteofPakistan
13.3.ComponentWisePerformanceofEnergy
13.3aPetroleumProduct
The petroleum products energy supplies during JulyMarch 200910 increased to 16.3 million tonnes
from14.2milliontonnesinsameperiodlastyeartherebywitnessingthe14.6percentgrowthduringthe
period. Due to increased petroleum products energy supplied, the overall consumption of petroleum
productsexhibitsanincreaseof8.1percentduringJulyMarch200910againstthesameperiodlastyear
(seetable13.3).
Table13.3:ConsumptionofPetroleumProducts(000tonnes)(PercentageChange)
Year
House Change Industry Change Agriculture Change Transport Change Power Change Other Change Total
holds
(%)
(%)
(%)
(%)
(%)
Govt.
(%)
200708 121
14.1
1,071
32.9
109
12.7
9,384
17.6
7,084
5.1
311
4.5
18,080
200809 97
19.5
969
9.5
70
36.2
8,837
5.8
7,570
6.9
367
18.2
17,911
JulMar
200809 75
718
50
6,309
5,497
245
12,892
200910 68
9.1
750
4.4
44
11.2
6,580
4.3
6,271
14.1
223
8.9
13,937
Thepower,industryandtransportsectorsconsumedthehigherquantityofpetroleumproductsduring
theperiodunderconsideration.Improvementofdomesticdemandledtheincreaseintheconsumption
of petroleum products by transport and industry. While the power sector consumption of petroleum
185
productsisbasedoncirculardebtfacedbyrefineriesforcingthemtoconsumehigheramountoffinal
petroleumproducts.
13.3bNaturalGas
Thesupplyofgashasexhibitedanincreaseof1.6percentduringJulyMarch200910.Theincreasein
supplyowestohigherproductionof1.6percentinnaturalgasduringtheperiodunderreview.Dueto
this increase in availability of natural gas, the overall consumption of gas remained higher during the
period. Furthermore, the sector wise consumption of gas suggests that the household, commercial,
fertilizerandtransportsectorwitnessedpositivegrowthinconsumptionofgasduring200809.
More recently, with the exception of cement and power sectors, many major sectors have witnessed
positivegrowthratesduringJulyMarchFY10(seeTable13.4).Theconsumptionofgasbyindustryhas
witnessedasignificantincreaseof5.3percentduringJulyMarch200910especiallyafterthedeclinedof
1.1percentduring200809.Theincreaseinindustrialconsumptionowestoriseindomesticdemandfor
manufacturingproductionduringtheperiod.
Themaximumdeclineof72.7percenthasbeenwitnessedincementsectorsgasconsumptiononthe
back of contraction in its external demand during the period along with the switch over to coal for
production. Decline in power sectors gas consumption is based on the inter corporate circular debt
reason.Ontheotherhand,gasconsumptioninthetransportsectorincreaseduetoshiftfromimported
fueloiltorelativelycheapersourceofgasduringJulyMarch200910.
Table13.4:ConsumptionofGas(Billioncft)
Year
House Change Comm Change

Change
Cement
hold
(%)
ercial
(%)
(%)
0708
204.0
0809
214.1
JulMar
0809
171.9
0910
184.5
(p)
P:Provisional
9.7
4.9
7.4
33.9
35.5
26.4
28.6
9.4
4.8
8.3
12.7
7.3
6.1
1.7
Ferti
lizer
Change
Change Indus Chang
Power
(%)
(%)
trial
e(%)
13.3
42.6
200.1
201.1
3.1
0.5
429.8
404.1
1.0
6.0
322.6
319.0
72.7
149.6
162.5
8.6
278.3
264.8
4.8
233.8
246.1
5.2
1.1
5.3
(Percentchange)
Transport
Change
P
(CNG)
(%)
mmcft
72,018.0
27.6
88,236.0
22.5
65,725.0
71,225.0
8.4
13.3cElectricity
For reasons discussed earlier, the overall electricity consumption has followed a declining trend since
200809. As overall electricity consumption in the country has witnessed a negative growth of 1.7
percentduringJulyMarch200910overthesameperiodlastyear(seeTable13.5).
Table13.5:ConsumptionofElectricitybySectors
Household
Commercial
Trac
Year
GWH Change GWH Change
tion
(%)
(000)
(%)
(000)
0708
8.0
33.7
1.2
5.6
3.7
0809
5.0
32.3
4.2
5.3
6.2
JulyMarch
0809
4.0
23.6
3.8
0910(e) 2.0
24.9
5.2
4.1
7.9
Industrial
GWH Chang
(000) e(%)
20.7
1.9
19.3
6.6
14.6
14.7
Agriculture
GWH Change
(000)
(%)
8.5
3.7
8.8
3.5
StreetLight
Change
Gwh
(%)
415.0
7.2
430.0
3.6
(PercentageChange)
OtherGovt.
GWH Change Total
(000)
(%)
4.5
2.3
73,400
4.3
5.0
70,371
307.0
6.8
55,614
11.2
364.0
18.6
3.3
50.7
54,653
e:ElectricityconsumptionforAJKisestimatedonthebasisofactualsixmonthsdata
1.1
6.5
7.2
186
Energy
Box1:CircularDebtSituationandStepsTaken
The circulardebtproblemplaguing the power sector stems from a disparity betweencost and tariffs of Energy.
Theinabilitytoincreasetheconsumersenergytariffpriortofiscalyear200708eventhoughgenerationcostkept
increasinggaverisetosubstantialcosttariffdifferential.Thissituationwasfurthercomplicatedbytheincreasein
theinternationalpriceofoilduring2008(seeFig3),amajorinputinthegenerationofelectricity.Asthesubsidy
element (difference between cost and tariff)grew, large amounts of circulardebt were created whereby power
producingcompanieswereunabletoreceivepaymentsfromdistributioncompanies,inturnthepowerproducers
couldnotmakepaymentstothefuelsuppliers.
Currentlythegovernmentisregularlyrevisingthepowertariffsinlineofinternationaloilpriceschangestorecover
thecostofpower.Asevidentfromtherisingfurnaceoilpricestherebyincreasingtheelectricityprices(seeFig3)
CircularDebtResolution
On01062009
Rs214billion
On30062009
Rs216billion
On18052010
Rs120billion
Fig3:FurnaceOil(FO)&ResidentialElectricity(1100units)Prices
4.5
70,000
60,000
FO
Elect
FORs/Tonne
40,000
2.5
30,000
2
1.5
20,000
ElectricityPrice(Rs)
3.5
50,000
1
10,000
0.5
0
Feb07
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan08
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan09
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan10
Feb
Mar
Apr
May
x AssumptionofRs.301.0billionbyPowerHoldingCompanywilltobecompletesoon.Markuppaymentsof
loanarebeingmaderegularly.Rs.40.0billionpaid.
x
x
x
x
x
x
x
Powertariffdifferentialclaim(subsidy)paidtopowersectorcompanies.Rs.95.0billion.
GovernmenthaspickedupentirepastliabilityofFATAofRs85.0billion.
GovernmentofPakistanpickedupPEPCOsreceivablesonaccountofFATAscurrentdues.Rs.16.7billion.
OfficeofGovernmentAdjusterhasbeenactivatedtoimproverecoveriesfromprovinces.
PEPCOisbeingpersuadedtoproactivelyrecovertheduesfromdefaultingprivateconsumers.
Powertariffarebeingreviewedregularlytorecoverthecostofpower.
Measuresarebeingtakentorestructurethesectorinordertoimproveitsefficiency.
187
x EnergySummithasbeenconvenedon1920April,2010toresolvePowerSectorissues.
x AnamountofRs.116.0billionwillbeprovidedtothesystemunderaplansubmittedbyFinanceDivision.
Out of which Rs. 66.0 billion will be disbursed by Federal Government. Rest by the Provincial
Governments.
Inaddition,thenetpositionofoverallcirculardebtiswitnessingadecliningtrendduringJulyApril200910(see
Fig4).AstheendmonthnetpositionofoverallcirculardebtdeclinedfromRs.190,953millioninJuly2010toRs.
103,939millioninthemonthofApril2010.
Fig4:NetPositionofInterCorporateCircularDebtPosition
Rsmillion
200,000
150,000
100,000
50,000
300410
310310
260210
290110
311209
261109
291009
170909
280809
310709
Source:CFWing,FinanceDivision
Thecompanywisereceivables,payablesandnetpositionofoverallcirculardebtason30thApril2010ispresented
inthetablebelow.
INTERCORPORATECIRCULARDEBTASON30THAPRIL2010
RECEIVABLES
PSO
PEPCO
HUBCO
KAPCO
OGDCL
PIA
Others
PriceDifferentialClaim
Total
SSGCL
KESC
PEPCO(JPCL)
PEPCO(QUETTA)
SNGPL
PakistanSteel
GDS
Total
SNGPL
PEPCO
Principal
PAYABLES
(Rs.inmillion)
Net
Principal
Positionof
Entities
36,496
39,027
21,844
194
1,120
1,300
6,440
106,421
PARCO
PRL
NRL
ARL
Bosicor
31,383
12,340
9,525
17,485
4,794
Other
Total
469
75,996
17,510
5,974
21
1,673
1,067
26,245
OGDCL
GHPL
PPL
14,221
6,162
6,828
Total
27,211
5,212
OGDCL
10,320
30,425
966
188
Energy
LibertyPower
GovernmentofPakistan
GDS
Govt.Consumers
Total
PEPCO
KESC
FATA
Provincial/Fed.Govt.Deptt.&AJK
Govt.ofBalochistan/GOBShare
Private
Others
Total
OGDCL
SNGPL
SSGCL
PSO
ARL
NRL
PRL
PARCO
ENAR
PEPCO
UPL
BOSICORPak.Ltd
KESC(PirkohGasCo.)
Total
PARCO
PRL
NRL
PSO
Others
Total
KESC
FederalGovernment
FederalAuton.Bodies
Sindh/Bal.Govt.Deptt.&Others
1,863
3,064
1,741
11,880
PPL
GHPL
SSGCL
6,508
1,993
1,585
Total
20,406
42,249
4,898
35,591
12,273
94,414
1,580
191,005
Gas
OIL
IPPs
WAPDAHydel
24,073
31,996
120,255
45,903
Others
Total
8,488
230,715
14,972
16,233
36
20,108
9,055
7,253
2,710
160
26
3,395
5,338
607
79,891
PSO
ENAR
GHPL
78
3
71
Total
151
29,857
29,857
NRL
PRL
OGDCL
Total
2,010
NTDC/PEPCO
KANUPP
TAPAL
Gul Ahmed
Energy
SSGCL
PSO/Other
Fed/Prov.
Dues
Total
CityDistt.Govt.Karachi(CDGK)
KW&SB
3,130
9,660
Total
14,800
8,526
39,710
79,740
29,857
13,700
2,160
2,190
2,980
12,570
4,810
38,410
23,610
GHPL
SSGCL
SNGPL
ARL
PRL
NRL
6,716
2,492
465
89
52
189
ENAR
PARCO
Bosicor
OGDCL
GasFon
Total
683
0
70
10,567
Total
10,567
PEPCO
SSGCL
SNGPL
PRL
Total
9,711
7,540
8,603
77
25,931
Total
25,931
KW&SB
FederalMinistries
Total
GRANDTOTAL
8,044
8,044
504,642
PPL
KESC
Total
7,814
7,814
231
400,703
103,939
Source:CFWing,FinanceDivision
13.3dCoal
Pakistanhascoalresourcesestimatedatover185billiontonnes,including175billiontonnesidentified
atTharcoalfieldsinSindhprovince.Pakistanscoalgenerallyranksfromlignitetosubbituminous.After
witnessing a decline of 17.0 percent in 200809, the total production of coal has increased by 10.0
percent during JulyMarch 200910 over the corresponding period last year (see Table 13.6). This
improvement owes to increased import of coal during the period as indigenous production of coal
witnessed a decline 6.5 percent during the period under review. As a result, share of coal imports in
overall availability of coal, increased from 62.2 percent in JulyMarch 200809 to 67.9 percent during
currentfiscalyear.About58.9percentoftotalcoalinthecountryhasbeenconsumedbythebrickkilns
industrywhereas39.6percentconsumedbycementindustryduringtheperiodofJulyMarch200910.
Thecoalconsumptionsharesofbrickkilnsandpowersectorsdecreasedby2.4percentand35.8percent
respectively during JulyMarch 200910 against the same period last year. Due to price differential
betweencoalandfurnaceoil,almostthewholecementindustryhasbeenswitchedovertocoalfrom
furnace oil. Operational coal mines decreased production by 15 percent from 4.12 million tonnes in
200708to3.49milliontonnesin200809.
Table13.6:ProductionofCoal(000tonnes)
Year
Imports
Production
Total
200001
950
3,095
4,045
200102
1,081
3,328
4,409
200203
1,578
3,312
4,890
200304
2,789
3,275
6,064
200405
3,307
4,587
7,894
200506
2,843
4,871
7,714
200607
4,251
3,643
7,894
200708
5,987
4,124
10,111
200809
4,652
3,738
8,390
JulyMarch
200809
3,000
1,822
4,822
200910(e)
3,600
1,704
5,304
e:Estimated
Source:M/oPetroleumNaturalResource,HydrocarbonDevelopmentInstituteofPakistan
190
Energy
13.4.EnergyProduction
13.4aCrudeOil
ThebalancerecoverablereservesofcrudeoilinthecountryasonJanuary1st2010havebeenestimated
at 303.63 million barrels. The average crude oil production during JulyMarch 200910 was 65,246
barrelsperdayasagainst66,531barrelsperdayduringthecorrespondingperiodoflastyear,showinga
decrease of 1.9 percent. During the period under review, 27,659 (42 percent) barrels per day were
produced in northern region and 37,586 (58 percent) barrels per day in southern region, as against
26,888(40percent)barrelsand39,643(60percent)barrelsproducedperdayrespectivelyinthesame
period last year. During JulyMarch 200910, production crude oil has increased by 2.9 percent from
northernregionwhereasproductionsdecreaseinsouthernregionby5.2percentascomparedtosame
periods overall 1.9 percent oil production decreased in the country. The company wise detail of
productionofcrudeoilduringJulyMarch.200910andcorrespondingperiodofthelastfiscalyearisas
giveninTable13.7.
Table13.7:ProductionofCrudeOil(BPOD)
Region
NorthernRegion
Dewan
OGDCL
OPII
POL
PPL
MOL
SouthernRegion
OGDCL
BP(Pakistan)
PPL
BHP
OMV
ENI
OPII
MGCL
Petronas
Total:
200809
26,517.94
179.32
15,520.98
410.78
3,584.53
4,559.24
2,263.09
39,326.70
24,963.92
10,385.48
137.48
2,716.24
66.93
384.49
637.59
34.56
65,844.64
JulyMarch
200809
26,888.20
197.64
15,351.43
401.01
3,839.05
4,672.11
2,426.96
39,643.29
25,393.15
9,654.17
146.74
2,720.06
64.25
386.00
1240.36
38.56
66,531.49
JulyMarch
Change(%)
200910
27,659.17
2.9
102.02
48.4
15,095.14
1.7
532.93
32.9
4,079.64
6.3
4,635.96
0.8
3,212.47
32.4
37,586.52
5.2
21,683.20
14.6
12,001.83
24.3
411.86
180.7
2,949.74
8.4
70.05
9.0
340.87
11.7
100.0
2.28
126.68
228.5
65,245.69
1.9
Source:MinistryofPetroleum&NaturalResources
13.4bNaturalGas
Theimportanceofnaturalgastothe countryhas beenincreasingrapidly.Ason January 1st2010,the
balancerecoverablenaturalgasreserveshavebeenestimatedat28.33trillioncubicfeet.Theaverage
productionofnaturalgasduringJulyMarch200910was4,048.76millioncubicfeetperday(mmcfd)as
against 3,986.53 (mmcfd) during the corresponding period of last year, showing an increase of 1.56
percent.Naturalgasisusedingeneralindustrytoprepareconsumeritems,toproducecementandto
generate electricity. In the form of CNG, it is used in transport sector and most importantly to
manufacturefertilizertoboosttheagriculturalsector.Currently28privateandpublicsectorcompanies
are engaged in oil and gas exploration & production activities. Company wise total natural gas
productionispresentedinTable13.8.
191
Table13.8:ProductionofNaturalGas(mmcfd)
Region
200809
BHP
ENI
Dewan
MGCL
OGDCL
OMV
OPII
POL
PPL
Tullow
PEL
BP
Petronas
MOL
Total:
446.65
420.33
38.14
464.95
933.01
473.11
29.8
24.58
810.35
9.24
30.43
244.98
13.99
62.3
4,001.86
JulyMarch
200809
435.36
416.6
40.45
469.07
920.11
467.61
54.14
25.81
812.17
12.69
30.66
222.99
15.4
63.45
3,986.53
JulyMarch
Change(%)
200910
524.11
20.39
434.11
4.20
16.12
60.15
494.32
5.38
872.1
5.22
439.13
6.09
7.54
86.07
24.55
4.88
794.99
2.12
1.61
87.31
28.19
8.06
246.53
10.56
16.26
5.58
149.2
135.15
4,048.76
1.56
(i)LiquefiedPetroleumGas(LPG):
LiquefiedPetroleumGas(LPG)contributesabout0.7percentofthecountrystotalenergysupplymix.
ThemainobjectivetoenhancetheuseofLPGistostopdeforestationintheareaswherethesupplyof
naturalgasistechnicallynotviable.Asaresultofgovernmentsinvestorfriendlypolicies,LPGsupplies
havegraduallyincreased.ThecornerstoneofLPGPolicyistoensureenhancedavailabilityofLPGata
competitivepricetotheendconsumer.LPGmarketingcompanieshaveimportedaround62,920.3MT
ofLPGduringJulyMarch,200910.
(ii)CompressedNaturalGas(CNG):
Inanefforttoreducedependencyonotherfuelsaswellastoimprovetheenvironment,theuseofCNG
in vehicles is being encouraged. Due to existing price differential between CNG & Petrol, vehicles are
being converted to CNG and approximately 2.0 million vehicles are using CNG in the country. The
number of CNG Stations is ever increasing with an increase in the vehicle conversion rate resultantly
thereareabout3,116establishedCNGStationsoperationalinthecountry.Withaninvestmentofover
Rs.70 Billion, Pakistan at present is the largest CNG user country in the world. In addition, the
Government has recently approved the project of PrivatePublic Partnership Based Environment
FriendlyPublicTransportSystemforMajorUrbanCentersofPakistanwhichisbeingactivelypursued
with the provincial governments leading to gradual phase out of diesel operated intracity urban
transporttoachieveimportsubstitution.
(iii)LiquefiedNaturalGas(LNG):
The Government is encouraging LNG import by the private sector. Accordingly, Pakistan Mashal LNG
Project(PMLP)wasconceivedtocaterfortheenergyneedofthecountryasenvisionedinthe25year
NationalEnergySecurityPlanandidentifiedintheEnergyGapCoverageStrategy.
PMLPistobesetuponanintegratedbasiswherebyaprivatesectorprojectdeveloperwillmanagethe
192
Energy
entire supply chain including procurement and shipping of 3.5 million tonnes per annum LNG,
construction and operation of an onshore LNG receiving terminal, and delivery of 500 MMCFD re
gasified LNG to the SSGCs system in Karachi. Mashal (PhaseI) will be based on Floating Storage and
RegasificationUnit(FSRU).
14.4cDrillingActivities
DuringJulyMarch200910,altogether50wellshavebeendrilled,including16wellsinthepublicsector
and34intheprivatesectorasagainst60inthesameperiodlastyearregisteringadecreaseof16.67
percent.Totalinvestmentof$888.80millionhassofarbeenmadeinthecurrentfinancialyearinthe
upstreampetroleumsector.Table13.9providethedetailsofdrillingactivitiesofthepublicandprivate
sectorcompanies,engagedintheexplorationanddevelopmentofwells,withachievementduringJuly
March200910andcorrespondingperiodlastyear.
Table13.9:DrillingActivities(Achievements)(No.ofWells)
JulyMarch
JulyMarch
Sector
200809
Change(%)
200809
200910
PublicSector(OGDCL)
30
20
16
20.00
i)Exploratory
12
7
8
14.29
ii)Appraisal/Dev
18
13
8
38.46
PrivateSector
56
40
34
15.00
iii)Exploratory
15
10
10
0.00
iv)Appraisal/Dev.
41
30
24
20.00
Total:
86
60
50
16.67
13.5PowerSector
Totalinstalledgenerationcapacitywitnessedanincreaseof2.1percentduring200910againstthe1.0
percentgrowthin correspondingperiodlastyear(seeTable13.10).Withtheshareof31.6percentin
totalinstalledcapacityduring200910,privatesectorwitnessedtheprominentgrowthof7.1percentin
itsinstalled capacity duringthe period underreview.Ontheotherhand,installedcapacityofWAPDA
declinedby0.5percentduringJulyMarch200910.Furthermore,theinstalledcapacityofKESCstoodat
1,955MWduringtheperiodunderreview.
Table13.10:TotalInstalledGenerationCapacity(MW)
Installed
Installed
S.No
PowerCompany
Capacity
Share(%)
Capacity
Share(%)
Change
200809
200910
1
WAPDA
11,454
57.9
11,399
56.5
0.5
Hydel
6,555
57.2*
6,555
57.5*
0.0
Thermal
4,899
42.8*
4,844
42.5*
1.1
2
IPPs
5,954
30.1
6,374
31.6
7.1
3
Nuclear
462
2.3
462
2.3
0.0
4
KESC
1,910.0
9.7
1,955.0
9.7
2.4
Total
19,780
100.0
20,190
100.0
2.1
*:ShareinWAPDAsystem
Source:HydrocarbonDevelopmentInstituteofPakistan&PEPCO
193
13.5aOil&GasRegulatoryAuthority(OGRA)
OGRA has been mandated to fix prices of petroleum products in March, 2006. Furthermore, the
consumerpricesarebeingnotifiedbyOGRAonmonthlybasisfromFebruary,2009.Briefly,underthe
saidpriceformulatheexdepotsalepricesarebeingcomputedas:
Exrefinery import parity price, computed per approved formula and subsequent modifications made
from time to time Plus Inland Freight Equalization Margin (IFEM) as determined by OGRA Plus 4.0
percent distribution margin and 5.0 percent dealer commission subject to minimum of USD 45 and
maximum of USD 80 of Arab Light crude oil per barrel Plus petroleum levy, as notified by Ministry of
Petroleum&NationalResources(MPNR)fromtimetotimePlusGeneralsalestaxattherateof16.0
percentofdepotpriceontheamountincludedallaboveelementspayableundertheSalesTaxlaw.
TheFederalGovernmenthasfixedpetroleumlevy(PL)fromJuly,2009.ThePLratesonvariousproducts
are as follows: HSD Rs.8.0/ liter, MS Rs.10.0/liter, HOBC Rs.14.0/liter, KERO Rs.6.0/liter and LDO Rs.
3.0/liter.
The local prices have been linked with the developments in the international oil market. Accordingly,
local exdepot prices vary in line with the international prices. Moreover, cost of gas is linked with
international prices of crude/fuel oil per Gas Pricing Agreements (GPAs) executed between the gas
producercompaniesandGovernmentofPakistan.
13.5bNationalElectricPowerRegulatoryAuthority(NEPRA)
TheNationalElectricPowerRegulatoryAuthorityisexclusivelyresponsibleforregulatingtheprovision
ofelectricpowerservices.
During the period July March 200910, NEPRA has processed ten applications for the grant of
generationlicenses,includingthermalandhydelpowerplantswithacumulativecapacityof311.4MW.
Inadditiontothesethermalandhydelpowerprojects,cases/applicationsoffivewindenergyprojects
withacumulativecapacityof200MWforgrantofgenerationlicenseswerealsoprocessed.
To encourage the hydel and coal based power projects in the country, the authority has allowed 17
percentIRRtohydelandindigenouscoaland16percenttoimportedcoalpowerprojectsasagainstthe
15percentIRRforoilandgasbasedthermalpowerprojects.
Furthermore,duringthe periodJulyMarch200910,NEPRAissued twentyseventariffdeterminations
and169tariffadjustmentsinrespectofgenerationanddistributioncompanies.
During the period under review, NEPRA has processed the tariff petition in respect of 80 MW Co
generationpowerprojectbasedonbagasse&importedcoal.
SupplySourcesofElectricity:
13.5cWAPDA
The installed capacity of PEPCO system is 18,233 MW as of March 2010 with hydro 6,555 MW and
thermal11,678MW.Thehydropowercapacityaccountsfor35.95percentandthermal64.05percent.
Out of 11,678 MW of thermal power, 4,844 MW is owned by ExWAPDA GENCos, 135 MW by rental,
325byPAECandrestbyIPPs.Thereis55MWofisolatedgenerationcapacityinPasni&Panjgoorareas.
194
Energy
i).ElectricityGeneration
Electricity generation from the hydro and thermal source has witnessed an increase of 5.6 percent
growthduringthecurrentfiscalyearJulyMarch200910comparedto5.0percentdeclineinJulyMarch
200809. Moreover, after growing negatively since 200708, the electricity generation has started to
growpositivelyduringcurrentfiscalyear200910.
The composition of electricity generation suggests the stagnation in shares of hydro and thermal
sourcesintheelectricitygenerationwithshareofthermalremainedlargerthanofthehydrosource(see
Table13.11).
Table13.11:ElectricityGenerationbyWAPDA(GWh)
Year
Hydro
Share(%)
200607
31,942
36
200708
28,667
33
200809
27,763
33
JulyMarch
200809
20,665
34
200910
21,101
33
TotalgenerationincludespurchasefromIPPsandimports
Thermal
55,895
57,602
56,614
Share(%)
64
67
67
40,653
43,646
66
67
Total
87,837
86,269
84,377
61,318
64,747
Source:PEPCO
ii).PowerTransmission
Thelengthoftransmissionlineswas5078ckMfor500kVand7325ckMfor220kVlevelattheendof
June2009.Whereas,thelengthoftransmissionlinewas4748ckMfor500kV&7318ckMfor220kV
level at the end of June 2008. In order to ensure uninterrupted and stable power supply to the
consumersaswellasintegrityofthegridsupplysystem,theaugmentationofthetransmissionnetwork
is a continuous process. In addition to the various ongoing secondary transmission lines and grid
stationsprogram,newtransmissionlines/substationsarebeingenvisaged.
iii).GrowthinConsumers
Thenumberofconsumershasbeenincreasingduetoexpansionofelectricnetworktovillagesandother
areas.Thegrowthinnumberofconsumersincreasedby4.5percentduringJulyMarch200910against
the 4.2 percent rise in same period last year. Moreover, the longer term analysis of group wise
consumers exhibits that the share of domestic consumer remained the highest with more than 80.0
percentoftotalnumberofconsumersintherespectiveyears(seeTable13.12).
Table13.12:ConsumersbyEconomicGroups(Thousands)
Year
Domestic
Commercial
Industrial
200607
14,354
2,152
233
200708
15,226
2,229
242
200809
15,482
2,257
250
JulyMarch
200809
15,687
2,271
250
200910
16,416
2,342
260
Agriculture
236
245
255
Others
11
11
11
Total
16,987
17,955
18,255
255
269
12
13
18,475
19,300
Source:PEPCO
195
iv).VillageElectrification
Thevillageelectrificationprogramisanintegralpartofthetotalpowersectordevelopmentprogram.As
aresult,thevillageelectrificationgrowthrateduringJulyMarch200910increasedby10.0percent(see
Table 13.13) over the 5.7 percent rise during same period last year. Furthermore, the number of
electrifiedvillageshasincreasedfrom137,765by30thJune2009to147,038bytheendofMarch2010.
Table13.13:VillageElectrification(InNumber)
Year
AdditionDuringtheYear
200607
14,203
200708
10,441
200809
9,868
JulyMarch
200809
5,566
200910
9,273
ProgressiveTotal
117,456
127,897
137,765
Growth(%)
14
9
8
10
Source:PEPCO
133,463
147,038
v).ElectricityConsumptionbyEconomicGroup
Theconsumptionofelectricitybyeconomicgroupidentifiesdomesticsectoraslargestuserofelectricity
inPakistan.Morerecently,theconsumptionshareofindustrialanddomesticgroupswitnessedadecline
of 5.1 percent and 0.1 percent during JulyMarch 200910 over the same period last year (see Table
13.14).While,thesignificantincreaseinthe consumptionshareshasbeenwitnessedinthegroupsof
PublicLighting,SupplytoKESCandAgricultureduringtheperiodunderreview.
Table13.14:ElectricityConsumptionbyEconomicGroups(%Share)
Comm
Agri
Public
Year
Domestic
Industrial
ercial
culture
Lighting
200607
43.00
6.36
26.09
12.00
0.47
200708
43.21
6.55
26.00
12.59
0.51
200809
42.56
6.44
24.56
13.32
0.53
JulyMarch
200809
42.20
6.40
25.20
13.30
0.50
200910
42.15
6.45
23.92
14.03
0.57
Bulk
Supply
4.84
5.01
4.90
4.90
4.92
Traction
0.02
0.01
0.01
0.01
0.01
Supplyto
KESC
7.27
6.12
7.68
7.50
7.94
Source:PEPCO
vi).PowerLosses
Transmissionanddistribution(T&D)lossesaspercent
of net system energy has remained more or less
stagnant between 21 percent to 25 percent from
200001to200809.Furthermore,duringJulyMarch
200910,T&Dlosseshaswitnessedanincreaseof1.0
percent over the corresponding period last year
Table 13.15. Keeping in view of these losses, the
NTDCandDISCOshaveinvokedvarioustechnicaland
administrativemeasurestoimproveoperationaland
managerial efficiency to reduce power losses. Other
measures such as renovation, rehabilitation,
196
Table 13.15: WAPDA T&D Losses as % of Net

SystemEnergy
Year
T&DLosses(%)*
200001
24.3
200203
24.4
200506
22.4
200708
21.3
200809
21.1
JulyMarch
200809
19.4
200910
19.6
*T&D=TransmissionandDistribution
Source:PEPCO
Energy
capacitor installation and strengthening the distribution system network are a continuous process for
controllingwastageofpower.
vii)PowerDevelopmentProgram
To improve the supply conditions of power in the
country, PEPCO is working on various power
generation projects having different expected dates
ofcompletionstartingfromcurrentfiscalyear2009
10toyear201718withtotalgenerationcapacityof
17,301MW(seeTable13.16).
Within this period, the power projects having the
capacity of 4,166 MW are expected to be
commissioned in the fiscal years of 200910 and
201011.
14.5d Karachi Electric Supply Company Limited
(KESC)
Table13.16:FuturegenerationProjectsPEPCO
System
Year
AnnualCapacity
Planned(MW)
200910
1,200
201011
2,966
201112
1,357
201213
2,140
201314
1,426
201415
1,060
201516
1,959
201617
2,597
201718
2,596
Total
17,301
Source:PEPCO
During the current fiscal year JulyMarch 200910, the installed capacity of KESCs various generating
stations remained at 1,955 MW, against the peak demand of 2,459 MW. During JulyMarch 200910,
KESCsowngenerationstoodat5,504Millionunits(kWh)against5,837Millionunits(kWh)duringsame
periodlastyeartherebyshowingadeclineof5.7percentduringtheperiod.Totalunitsavailabletothe
KESCssystemexhibitanincreaseof5.6percentduringJulyMarch200910againstthesameperiodlast
year(seeTable13.17).
Table13.17:KESCOperatingResults
S.No
1
2
3
4
5
6
Description
POWERPURCHASE
KANUPP
PASMIC
TAPAL
GULAHMED
WAPDA
ANOUDPOWER
DHACOGEN
INTL.INDUS.LTD
AGGREKO(PROV.)
ENGRO
Total
UnitsAvailableforDistribution
UnitSold
Trans.&Dist.Losses
InstalledCapacity(MW)
PeakDemand
JulyMarch
(200909)
JulyMarch
(200910)
286.1
85.0
441.6
316.3
3,585.6
12.2
68.0
99.8
60.7
413.2
71.9
410.3
384.4
4,044.2
18.9
111.1
93.9
246.4
45.0
5,839.2
10,929.8
7,163.3
3,766.4
1,955.0
2,459.0
4,955.3
10,348.9
6,793.1
3,555.8
1,910.0
2,352.0
(UnitsinMillionkWh)
Change
(%)
44.4
15.4
7.1
21.5
12.8
55.2
63.3
5.9
306.0
17.8
5.6
5.5
5.9
2.4
4.5
Source: KESC
197
Moreover,thetransmissionanddistributionlossesofKESCpostedanincreaseof5.9percentduringthe
first nine months of the current fiscal year. Power purchase by the KESC increased by 17.8 percent
during the period. The share of domestic consumer in the KESCs units sale to Karachi consumers
remained at 41.90 percent during the JulyMarch 200910 followed by Industrial (34.70 percent) and
Commercial(10.80percent).
13.5eNuclearEnergy
Pakistan Atomic Energy Commission (PAEC) is responsible for planning, construction and operation of
nuclear power plants. Presently, two nuclear power plants; Karachi Nuclear Power Plant (K1) and
ChashmaNuclearPowerPlantunit1(C1)areinoperation,whileconstructionofathirdplant,Chashma
NuclearPowerPlantUnit2(C2),isinprogress.
K1, a CANDU type plant, has been in commercial operation since 1971. K1, after completing its
designedlifeof30yearsisoperatingonextendedlifeof15years.K1generated456.94millionkWhof
electricityduringtheperiodofJulyMarch200910,raisingitslifetimegenerationto12.82billionkWh.
C1, a Pressurized Water Reactor (PWR) type plant with a gross capacity of 325 MWe, has been in
commercial operation since September 2000. C1 generated 2063.94 million kWh of electricity during
JulyMarch 200910, raising its lifetime generation to 19.46 billion kWh. The construction and
installation activities of C2 are in progress as per schedule. The C2 is expected to be operational by
2011.
PakistanAtomicEnergyhasbeenassignedthetaskofinstalling8,800MWnuclearpowercapacitybythe
year2030withincreasingshareofindigenization.Inthisrespect,technicalfacilitieshavealreadybeen
establishedandhumanresourcedevelopmentinstitutesarebeingupgradedandexpanded.
13.5fPrivatePowerandInfrastructureBoard(PPIB)
PPIB is currently processing forty four (44) multiple
fuel (Oil, Coal, Gas and Hydel) power generation
projects with a cumulative capacity of 10,845 MW
(see table 13.18) which are expected to be
commissionedfromyear2010to2017.
Furthermore, the following IPPs have been
established in 200910 and other projects are under
construction and will soon be delivering much
needed megawatts to the national grid to minimize
thedemandsupplygap:
-
Table13.18 :AnnualExpectedCapacity(IPPs)
Year
(MW)
Projectsalreadycommissioned
586
2010
2,806
201112
672
2013
501
2014
612
2015
2,292
2016
888
2017
2,488
Total
10,845
216MWEngroPowerProject
214MWAtlasPowerLimited
13.5gAlternateSourceofEnergy
AlternativeEnergyDevelopmentBoard(AEDB)processesallalternativeandrenewableenergyprojects
inthePublicSectorandthePrivateSectorprojectsinthepowersector.
198
Energy
(i)MegaWindPowerProjects
AEDBissued4LettersofIntent(LOI)forwindpowerprojects,3for50MWandonefor2.4MW.AEDBis
currentlyfacilitatingtwenty(20)projectshavingacapacityof50MWeach,whichareatdifferentstages
ofdevelopment.OneIPPhassignedacontractwithinternationalturbinemanufacturerforthesupplyof
equipment for their project. One company has installed 06 MW in the first phase of their 50 MW
project.Feasibilitystudiesfor50MWwindpowerprojectseachhavebeencompletedby2IPPstaking
thetotalto14completedfeasibilitystudies.
(ii)Biodiesel
AEDB through a consultative process identified the barriers to biodiesel feedstock cultivation in
Pakistan,andistakingactionstoremovethesebarriers.Experimentalcultivationofbiodieselfeedstock
onscientificbasishasalsobeenstarted.Thecultivationhasnowrisenfromaround2acresin2005to
more than 650 acres in 2009. Pakistans first ever commercial biodiesel production facility has been
setupinKarachibytheprivatesector.Thisbiodieselrefineryhasacapacityofproducing18,000tonsof
Biodieselperannum.
(iii)Biomass/WasteToEnergy
AEDBhassignedacontractwithaforeignfirmforcarryingoutafeasibilitystudyforgeneratingupto10
MW of electricity from Municipal Solid Waste in Karachi. The study is currently underway and would
lead to establish a 10 MW WastetoEnergy power plant in Karachi. AEDB has initiated a project for
carryingoutdetailedstudiesforbiomass/wastetoenergyprojectsin20citiesofPakistan.Companies
havebeenshortlistedforissuanceofRFPsonbasisofExpressionsofInterest(EOI)submittedbythem.
(iv)Small/Mini/MicroHydro
AEDB is actively working to install 103 micro hydro power plants at Chitral and other places in Gilgit
Baltistan.ThetotalcostoftheprojectisUS$19.5millionoutofwhichUS$1.0millionisforProductive
UseofRenewableEnergy(PURE).
Eight micro/mini/small hydel power projects have been initiated under the Renewable Energy
Development Sector Investment Program of Asian Development Bank (ADB). The cost of these eight
projects is estimated at US $ 139.5 million. Furthermore, Government of Punjab issued LOIs to 10
privateinvestorsforestablishmentofsmallhydelpowerprojectwithacumulativecapacityof142MW
atdifferentlocationofPunjab.
(v)Solar
Morethanthirtytwovendorsarecurrentlyimportingsolarwaterheatersandmarketingthemallover
the country. Some local manufacturers are also playing an important role in promotion of this
technology.
AEDB recently launched a Consumer Confidence Building Program for the promotion of Solar Water
Heaters in the country. The program was designed to create awareness of solar water heating
technology and to build the consumer confidence on the product through a number of incentives to
buyers thatincludes moneybackguarantee.AEDB isalsoworkingforthedeploymentof 20,000solar
waterhearersinGilgitBaltistan.
199
TABLE 13.1
COMMERCIAL ENERGY CONSUMPTION
1. Oil/Petroleum (tonnes)
Fiscal
AgriculYear
Households
Industry
ture (a)
Transport
Power
Other Govt.
1991-92
613,706
1,369,525
281,539
5,619,552
2,775,418
323,228
1992-93
622,075
1,479,935
287,181
6,107,416
3,158,124
357,115
1993-94
589,851
1,653,516
307,795
6,414,582
3,902,308
357,529
1994-95
585,173
1,889,443
268,631
6,646,175
4,215,635
355,110
1995-96
596,031
2,416,278
250,031
7,135,631
4,785,856
417,254
1996-97
509,738
2,141,065
268,866
7,172,269
5,110,233
403,795
1997-98
498,949
2,081,172
244,977
7,364,767
6,053,784
380,756
1998-99
492,768
2,139,889
249,229
7,864,063
5,525,669
376,133
1999-00
477,305
2,115,860
293,034
8,307,977
6,227,595
346,050
2000-01
450,960
1,924,048
254,833
8,157,893
6,487,988
372,176
2001-02
334,501
1,611,995
225,742
8,018,777
6,305,419
463,654
2002-03
282,521
1,604,068
196,747
8,082,273
6,019,958
266,387
2003-04
231,459
1,493,080
183,506
8,464,042
2,739,763
309,263
2004-05
192,750
1,542,398
142,062
9,024,783
3,452,581
316,686
2005-06
128,651
1,681,517
81,896
8,156,831
4,218,982
358,807
2006-07
106,148
1,595,981
97,232
7,981,893
6,740,559
325,318
2007-08
120,961
1,071,191
109,351
9,384,482
7,083,933
310,501
2008-09
97,332
969,193
69,793
8,837,197
7,570,418
367,266
Jul-Mar
2008-09
75,318
718,053
50,076
6,306,840
5,496,505
244,845
2009-10 P
68,499
749,538
44,455
6,580,480
6,271,286
223,139
(a) : HSD consumption in agricultural sector is not available separately and is included under
transport sector. Agricultural sector represents LDO only
Source : Oil Company Advisory Committee
Total
10,982,968
12,011,846
13,225,581
13,960,167
15,601,081
15,605,966
16,624,405
16,647,751
17,767,821
17,647,898
16,960,088
16,451,954
13,421,113
14,671,260
14,626,684
16,847,131
18,080,419
17,911,199
12,891,637
13,937,397
(Contd.)
TABLE 13.1
2. Gas (mm cft)
Fiscal
Year
Households
Commercial
Cement
1991-92
70,741
13,057
11,761
1992-93
75,783
14,326
11,914
1993-94
82,461
15,239
10,187
1994-95
97,045
16,064
6,730
1995-96
110,103
16,960
7,569
1996-97
115,488
18,403
8,718
1997-98
134,500
18,764
12,092
1998-99
131,656
21,466
7,988
1999-00
139,973
21,712
8,558
2000-01
140,899
20,618
6,977
2001-02
144,186
22,130
7,063
2002-03
153,508
22,776
3,445
2003-04
155,174
24,192
7,711
2004-05
172,103
27,191
13,383
2005-06
171,109
29,269
15,335
2006-07
185,533
31,375
14,686
2007-08
204,035
33,905
12,736
2008-09
214,113
35,536
7,305
Jul-Mar
2008-09
171,875
26,400
6,050
2009-10 P
184,525
28,600
1,650
- : Not available.
P : Provisional
@ : (CNG) Compressed Natural Gas
Fertilizer
101,493
119,628
144,514
141,697
150,374
150,483
147,752
167,474
177,152
175,393
177,589
180,611
185,350
190,409
198,175
193,682
200,063
201,100
Power
193,893
186,853
197,694
181,107
186,507
193,984
179,042
183,694
227,364
281,255
314,851
335,636
469,738
507,398
491,766
433,672
429,892
404,140
Transport
Industry
(CNG) @
95,661
25
102,991
31
100,631
43
104,098
47
111,202
153
110,365
358
115,250
490
121,431
2,182
134,916
2,426
138,503
4,423
151,416
7,369
164,968
11,320
193,395
15,858
226,116
24,443
278,846
38,885
306,600
56,446
322,563
72,018
319,003
88,236
149,600
162,525
276,300
264,825
233,750
246,125
65,725
71,225
Total
486,631
511,526
550,769
546,788
582,868
597,799
607,890
635,891
712,101
768,068
824,604
872,264
1,051,418
1,161,043
1,223,385
1,221,994
1,275,212
1,269,433
931,700
959,475
(Contd.)
TABLE 13.1
3. Electricity (Gwh)
Fiscal
Trac- House- Commer- Indus Agricul- Street
Year
tion hold
cial
trial
tural
Light
1991-92
29 11,458
2,143
12,289
5,847
..
1992-93
27 13,170
2,333
13,043
5,635
297
1993-94
27 14,080
1,786
12,637
5,772
298
1994-95
22 15,585
2,623
12,528
6,251
324
1995-96
20 17,116
2,962
12,183
6,696
378
1996-97
18 17,757
2,241
11,982
7,086
390
1997-98
16 18,750
2,334
12,297
6,937
387
1998-99
15 19,394
2,409
12,061
5,620
224
1999-00
15 21,455
2,544
13,202
4,540
239
2000-01
13 22,765
2,774
14,349
4,924
213
2001-02
11 23,210
2,951
15,141
5,607
212
2002-03
10 23,624
3,218
16,181
6,016
244
2003-04
9
25,846
3,689
17,366
6,669
262
2004-05
12 27,601
4,080
18,591
6,988
305
2005-06
13 30,720
4,730
19,803
7,949
353
2006-07
12 33,335
5,363
21,066
8,176
387
2007-08
8
33,704
5,572
20,729
8,472
415
2008-09
5
32,282
5,252
19,330
8,795
430
Jul-Mar
2008-09
4
23,643
3,829
14,563
6,501
307
2009-10 e 2
24,868
4,133
14,726
7,227
364
.. : not available
e : Electricity consumption for AJK is estimated
on the basis of actual six months data
Other
Govt.
2,112
1,987
2,781
2,116
2,382
3,440
3,851
3,573
3,591
3,547
3,490
3,363
3,650
3,750
4,035
4,373
4,500
4,277
6,767
3,333
Total
33,878
36,493
37,381
39,448
41,737
42,914
44,572
43,296
45,586
48,585
50,622
52,656
57,491
61,327
67,603
72,712
73,400
70,371
Household
6.8
3.2
3.3
3.2
3.1
9.7
2.3
1.3
1.0
1.0
1.1
1.1
1.0
..
..
1.0
1.0
0.8
4. Coal (000 metric tonne)

Power
Brick
Kilns
Cement
39.5
3,052.4
..
46.7
3,216.6
..
43.6
3,487.0
..
40.7
2,998.9
..
398.9
3,235.8
..
351.9
3,191.3
..
346.5
2,809.9
..
415.3
3,044.8
..
348.1
2,818.8
..
205.8
2,837.9
1,000.0
249.4
2,577.5
1,580.6
203.6
2,607.0
2,078.2
184.9
2,589.4
3,289.2
180.0
3,906.7
3,807.2
149.3
4,221.8
3,342.8
164.4
3,277.5
4,451.2
162.0
3,760.7
6,186.9
112.5
3,274.8
5,001.8
Total
3,098.7
3,266.6
3,533.9
3,042.8
3,637.8
3,552.9
3,158.7
3,461.4
3,167.9
4,044.7
4,408.6
4,889.9
6,064.5
7,893.8
7,714.0
7,894.1
10,110.6
8,389.9
55,614
0.8
110.0
2,911.6
1,800.0
4,822.4
54,653
..
77.7
3,126.5
2,100.0
5,304.2
Source: Hydrocarbon Development Institute of Pakistan (HDIP)
Ministry of Petroleum and Natural Resources
TABLE 13.2
COMMERCIAL ENERGY SUPPLIES
Oil
Crude
Local
Oil
Crude
Imports
Extraction
(000 barrels) (000 barrels)
30,016
22,469
29,407
21,895
30,770
20,675
28,386
19,858
31,044
21,063
28,588
21,270
29,826
20,543
32,855
19,986
32,938
20,395
52,505
21,084
51,982
23,195
52,512
23,458
57,699
22,625
61,161
24,119
63,546
23,936
60,694
24,615
64,912
25,603
62,115
24,033
Fiscal
Year
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Jul-Mar
2008-09
44,151
2009-10 (e)
38,840
+ : Million cubic feet
(a) : MW: Mega Watt
(b) : Gwh: Giga Watt Hour
18,230
17,877
Gas
(mcf) +
550,715
583,545
624,229
628,211
666,580
697,763
699,709
744,942
818,342
857,433
923,758
992,589
1,202,750
1,344,953
1,400,026
1,413,581
1,454,194
1,460,679
1,092,309
1,109,360
e : estimated
p : Provisional
Petroleum Products
Imports
(000 tonnes)
5,275
6,612
7,910
8,737
10,137
10,398
11,064
10,926
11,878
10,029
9,023
8,437
5,170
5,676
6,009
8,330
9,025
9,974
7,094
8,619
Production
(000 tonnes)
5,961
5,694
5,841
5,434
5,874
5,495
5,858
5,925
6,115
8,337
9,028
9,084
9,740
10,474
10,498
10,314
10,754
9,828
Coal
ProducImports
tion
(000 tonnes) (000 tonnes)
1,069
3,099
994
3,266
1,094
3,534
1,096
3,043
1,080
3,638
840
3,553
960
3,159
910
3,461
957
3,168
950
3,095
1,081
3,328
1,578
3,312
2,789
3,275
3,307
4,587
2,843
4,871
4,251
3,643
5,987
4,124
4,652
3,738
Electricity
Installed
Generation
Capacity
(Gwh)(b)
(MW)(a)
9,369
10,586
11,319
12,100
12,969
14,818
15,658
15,662
17,399
17,498
17,799
17,798
19,257
19,384
19,450
19,420
19,420
19,786
45,440
48,750
50,640
53,545
56,946
59,125
62,104
65,402
65,751
68,117
72,405
75,682
80,900
85,738
93,774
98,384
95,860
91,843
7,138
3,000 e
1,822 p 19,575
60,793 p
7,685
3,600 e
1,704 p 19,650
65,582 p
TABLE 13.3
COMMERCIAL ENERGY SUPPLIES
Fiscal
Year
Hydroelectric (Hydel)
Installed
Generation
Capacity
(Gwh) b
(MW) a
2,898
18,343
3,330
18,647
4,626
21,112
4,726
19,436
4,826
22,858
4,826
23,206
4,826
20,858
4,826
22,060
4,826
22,449
4,826
19,288
4,867
17,194
5,051
18,941
5,051
22,351
6,496
26,944
6,499
25,671
6,499
30,862
6,479
31,953
6,480
28,707
6,481
27,784
Electricity
Thermal
Installed
Generation
Capacity
(Gwh) b
(MW) a
5,741
22,354
5,902
26,375
5,823
27,057
6,456
30,707
7,137
30,176
8,006
33,257
9,855
37,921
10,696
39,669
10,700
42,669
12,436
46,064
12,169
48,926
12,286
51,174
12,285
51,591
12,299
52,122
12,423
57,162
12,489
60,283
12,478
63,972
12,478
63,877
12,843
62,214
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Jul-Mar
2008-09
6,481
20,526
12,632 p
2009-10 (e)
6,481
23,535
12,707 p
(a) : MW: Mega Watt
p : Provisional
Source:
(b) : Gwh: Giga Watt Hour
e : electricity generation estimates based on six months actual data
Installed
Capacity
(MW) a
137
137
137
137
137
137
137
137
137
137
462
462
462
462
462
462
462
462
462
Nuclear
Generation
(Gwh) b
385
418
582
497
511
483
346
375
284
399
1,997
2,291
1,740
1,760
2,795
2,484
2,288
3,077
1,618
Imported
(Gwh)
0.36
73
109
146
171
199
227
39,154
462
918
195
39,342 p
462
2,521
185
Hydrocarbon Development Institute of Pakistan (HDIP)
TABLE 13.4
SCHEDULE OF ELECTRICITY TARIFFS OF DISCO
Effective from 24-02-2007
TARIFF CATEGORY
Fixed Charges (Rs/KW)
Variable Charges (RS/KW)
A-1 GENERAL SUPPLY TARIFF- RESIDENTIAL
Upto 50 Units per month
1.40
FOR CONSUMPTION EXCEEDING 50 UNITS
1 - 100 Units per month
2.65
3.64
6.15
Above 1000 Units per month
7.41
365.00
6.00
Time of Day (TOD) - Peak
365
3.55
Time of Day (TOD) - Off-Peak
Rs 75/- & 150/Min. Charges: single & 3/ Phase
A-2 GENERAL SUPPLY TARIFF - COMMERCIAL
a) For Sanctioned Load upto 20 KW
i) For First 100 units
7.48
ii) Above 100 units
7.61
b) For Sanctioned Load exceeding 20 KW
267.17
4.59
c) Time of Use - Peak
365.00
6.00
365.00
3.55
Time of Use -Off- Peak
Rs 75/- & 350/Min. Charges/month: Single & 3 Phase
B- INDUSTRIAL SUPPLY TARIFFS
B-1 upto 40 KW (400 Volts)
5.62
B-2 Load >40 to 500 KW at 400 Volts.
364.32
3.93
B-2 TOD (Peak)
364.32
5.01
B-2 TOD (Off-Peak)
364.32
3.89
B-3 11/33kV TOD -Peak
352.18
4.40
352.18
3.31
B-3 11/33kV TOD Off-Peak
B-4 66/132kV TOD-Peak
340.03
4.29
B-4 TOD (Off-Peak)
340.03
3.15
Min. Charges/month B-1, B-2, B-3 & B-4
C-SINGLE POINT BULK SUPPLY TARIFFS
C-1 (a) 400/230 Volts Load upto 20 kW
267.17
5.68
C-1 (b) 400-V- Load 21-500kW
365.00
5.27
365.00
6.00
C-1 (c) TOD Opt. Peak
262.31
3.55
TOD Off-Peak
C-2(a) at 11/33-kV load upto 5000kW
355.00
4.96
C-2 (b) load upto 5000 kW -peak
355.00
5.95
259.88
3.45
Off-Peak
C-3 supply at 66kV & above
340.00
4.86
340.00
5.90
Time of Day (TOD) Peak
340.00
3.40
Time of Day (TOD) Off-Peak
D-AGRICULTURAL TUBE WELL TARIFFS
D-19(a) - SCARP less than 20kW
5.41
D-2- Agri. T/Wells- Punjab & Sindh
87.44
3.28
87.44
2.87
D-2- Agri. T/Wells NWFP & Blochistan
3.55
6.00
D-1(b) TOD SCARP & Agri>20kW Peak
3.55
3.55
Off-Peak
E-TEMPORARY SUPPLY TARIFFS
E-1(i) Residential Supply
E-1(ii) Commercial Supply
E-2 Industrial Supply
Rs 50. Min. 500/Min. Charges per day E-1( i & ii)
125% of Industrial Tariff
F- SEASONAL INDUSTRIAL SUPPLY
G- PUBLIC LIGHTENING
7.59
Minimum charges per month per Kw
Rs. 500
H- Residential Colonies Attached to Industrial Premises
I- Railway Traction
J- Special Contracts
J-1 AJ&K
Time of use peak
Off Peak
J-2 Rawat Lab.
Note: 1) The above figures cover some portion of the tariffs schedule. For full details, WAPDA may be consulted.
TABLE 13.4
SCHEDULE OF ELECTRICITY TARIFFS OF DISCO
TARIFF CATEGORY
Fixed Charges
Rs/KW
EFFECTIVE FROM 01-03-2008

Variable Charges Rs/KWh
LESCO GEPCO FESCO MEPCO QESCO
IESCO
A-1 GENERAL SUPPLY TARIFF- RESIDENTIAL
Upto 50 Units per month
1.40
1.40
1.40
1.40
1.40
FOR CONSUMPTION EXCEEDING 50 UNITS
3.08
3.08
3.08
3.08
3.08
4.08
4.08
4.08
4.08
4.08
6.53
6.53
6.53
6.53
6.53
Above 1000 Units per month
7.79
7.79
7.79
7.79
7.79
Time of Day (TOD) - Peak
315
7.24
7.13
7.22
7.04
7.73
Time of Day (TOD) - Off-Peak
315
4.28
4.28
4.28
4.28
4.28
Rs 75/- & 150/Min. Charges: single & 3/ Phase
a) For Sanctioned Load upto 20 KW
i) For First 100 units
7.86
7.86
7.86
7.86
7.86
ii) Above 100 units
7.99
7.99
7.99
7.99
7.99
b) For Sanctioned Load exceeding 20 KW
365
4.97
4.97
4.97
4.97
4.97
c) Time of Use - Peak
315
7.24
7.13
7.22
7.04
7.73
Time of Use -Off- Peak
315
4.28
4.28
4.28
4.28
4.28
Rs 75/- & 360/Min. Charges/month: Single & 3 Phase
B-1 upto 40 KW (400 Volts)
6.00
6.00
6.00
6.00
6.00
B-2 Load >40 to 500 KW at 400 Volts.
315
4.63
4.63
4.63
4.63
4.63
B-2 TOD (Peak)
315
7.24
7.13
7.22
7.04
7.73
B-2 TOD (Off-Peak)
315
4.28
4.28
4.28
4.28
4.28
B-3 11/33kV TOD -Peak
305
6.99
6.88
6.97
6.79
7.48
B-3 11/33kV TOD Off-Peak
305
3.88
3.88
3.88
3.88
3.88
B-4 66/132kV TOD-Peak
295
6.74
6.63
6.72
6.54
7.23
B-4 TOD (Off-Peak)
395
3.63
3.63
3.63
3.63
3.63
Rs. 350, 2000, 50,000 & 500,000 respectively
Min. Charges/month B-1, B-2, B-3 &B-4
C-SINGLE POINT BULK SUPPLY TARIFFS
C-1 (a) 400/230 Volts Load upto 20 kW
6.17
6.17
6.17
6.17
6.17
C-1 (b) 400-V- Load 21-500kW
315
5.68
5.68
5.68
5.68
5.68
C-1 (c) TOD Opt. Peak
315
7.24
7.13
7.22
7.04
7.73
TOD Off-Peak
315
4.28
4.28
4.28
4.28
4.28
C-2(a) at 11/33-kV load upto 5000kW
305
5.38
5.38
5.38
5.38
5.38
C-2 (b) load upto 5000 kW -peak
305
6.99
6.88
6.97
6.79
7.48
Off-Peak
305
3.88
3.88
3.88
3.88
3.88
C-3 supply at 66kV & above
295
5.28
5.28
5.28
5.28
5.28
Time of Day (TOD) Peak
295
6.74
6.63
6.72
6.54
7.23
Time of Day (TOD) Off-Peak
295
3.63
3.63
3.63
3.63
3.63
D-AGRICULTURAL TUBE WELL TARIFFS
D-19(a) - SCARP less than 20kW
5.99
5.88
5.97
5.94
6.48
D-2- Agri. T/Wells- Punjab & Sindh
90
3.73
3.73
3.73
3.73
3.73
90
3.73
3.73
3.73
3.73
3.73
D-2- Agri. T/Wells NWFP & Blochistan
D-1(b) TOD SCARP & Agri>20kW Peak
305
7.24
7.13
7.22
7.04
7.73
Off-Peak
305
3.13
3.13
3.13
3.13
3.13
E-TEMPORARY SUPPLY TARIFFS
7.90
7.79
7.97
7.94
8.48
8.10
7.99
8.17
8.19
8.88
6.11
6.00
6.47
6.94
6.98
Min. Charges per day E-1( i & ii)
Rs. 500, Min. 500/125% of relevant industrial tariff
F- SEASONAL INDUSTRIAL SUPPLY
G- PUBLIC LIGHTENING
8.08
7.97
8.22
8.19
8.48
Minimum charges per month per Kw
500
H- Residential Colonies Attached to Industrial Premises
7.27
7.16
7.47
7.44
7.73
I- Railway Traction
6.07
6.48
J- Special Contracts
J-1 AJ& K
355
2.59
2.59
Time of use peak
295
7.24
7.22
Off Peak
295
3.99
3.97
J-2 Rawat Lab.
5.43
Note: 1) The above figures cover some portion of the tariffs schedule. For full details, WAPDA may be consulted.
PESCO
HESCO
1.40
1.40
1.40
3.08
4.08
6.53
7.79
7.84
4.28
3.08
4.08
6.53
7.79
9.45
4.28
3.08
4.08
6.53
7.79
9.99
4.28
7.86
7.99
4.97
7.84
4.28
7.86
7.99
4.97
9.45
4.28
7.86
7.99
4.97
9.99
4.28
6.00
4.63
7.84
4.28
7.59
3.88
7.34
3.63
6.00
4.63
9.45
4.28
9.20
3.88
8.95
3.63
6.00
4.63
9.99
4.28
9.59
3.88
9.19
3.63
6.17
5.68
7.84
4.28
5.38
7.59
3.88
5.28
7.34
3.63
6.17
5.68
9.45
4.28
5.38
9.20
3.88
5.28
8.95
3.63
6.17
5.68
9.99
4.28
5.38
9.59
3.88
5.28
9.19
3.63
7.59
3.73
3.73
7.84
3.13
7.70
3.73
3.73
9.45
3.13
7.59
3.73
3.73
9.99
3.13
9.59
9.79
7.09
10.70
11.20
6.70
11.19
12.59
8.59
8.34
8.70
11.59
7.80
10.59
2.59
9.45
4.20
TABLE 13.4
SCHEDULE OF ELECTRICITY TARIFFS
Effective from Feb, 2009 (FOR ALL DISCOs)
Tariff Category
Fixed Charges (Rs/Kwh)
Variable Charges (Rs/Kwh)
A-1 General Supply Tariff - Domestic
Schedule-II
A-1(a) For Sanctioned Load upto 5 KW
i. Upto 50 Units
1.40
For Consumption Exceeding 50 Units
ii. 1 - 100 Units
3.29
iii. 101-300 Units
4.96
iv. 301 - 700 Units
8.03
v. Above 700 Units
10.00
A-1(b) For Sanctioned Load exceeding 5 KW
Time of Use (TOU) - Peak
9.21
Time of Use (TOU) - Off Peak
5.62
Minimum Monthly Charges for: S/ Phase Rs. 75/- & 3/Phase Rs. 150/A-2 GENERAL SUPPLY TARIFF - COMMERCIAL
315
9.81
A-2(b) For Sanctioned Load exceeding 5 KW
315
6.12
A-2(c) Time of Use - Peak
315
8.65
Time of use - Off Peak
5.28
Minimum Monthly Charges for: S/ Phase Rs. 175/- & 3/Phase Rs. 350/B- INDUSTRIAL SUPPLY TARIFFS
B-1 Upto 5 KW (400/230 Volts)
7.38
B-2(a) Load 6 - 500 KW (at 400 volts)
315
5.71
B-2(b) 6 - 500 KW TOU Peak
315
8.65
B-2(b) 6 - 500 KW TOU Off Peak
315
5.28
B-3 For All Loads upto 5000 KW (at 11/33kv) - Peak
305
8.34
B-3 For All Loads upto 5000 KW (at 11/33kv) - Off Peak
305
4.79
B-4 For All Loads (at 66, 132 kv & above) - Peak
295
8.04
B-4 For All Loads (at 66, 132 kv & above) - Off Peak
295
4.49
Fixed Min. Charges/month for B-1 Rs. 350/-, B-2 Rs. 2000/-, B-3 Rs. 50,000/- & B-4 Rs. 500,000/C-BULK SUPPLY TARIFFS
C-1(a) For supply at 400/230 volts, load upto 5 KW
7.46
C-1(b) Load above 5 KW & upto 500 KW
315
6.88
C-1(c) load > 5 & upto 500 KW Peak
315
8.51
C-1(c) load > 5 & upto 500 KW Off Peak
315
5.20
C-2(a) 11/33 kV upto load 5000 KW
305
6.52
C-2(b) 11/33 kV upto load 5000 KW Peak
305
8.21
C-2(b) 11/33 kV upto load 5000 KW Off Peak
305
4.72
C-3(a) 66 kV & above, loads > 5000 KW
295
6.40
C-3(b) 66 kV & above, loads > 5000 KW Peak
295
7.91
C-3(b) 66 kV & above, loads > 5000 KW Off Peak
295
4.42
D-AGRICULTURE TUBE WELL TARIFFS
D-1(a) Scarp less than 5 KW
6.37
D-2 Agricultural Tube Wells
90
4.00
315
7.61
D-1(b) TOU for SCARP & Agri. - Peak
TOU for SCARP & Agri. - Off Peak
315
3.42
E- TEMPORARY SUPPLY TARIFFS
10.00
10.50
7.50
Minimum Monthly charges for E1 (i & ii) Rs. 50/day subject to a minimum of Rs. 500/OTHERS TARIFFS
F - SEASONAL SUPPLY TARIFF
G - PUBLIC LIGHTING TARIFF
9.62
Minimum Monthly Charges Rs. 500/- per KW month of lamp capacity installed
H-RESIDENTIAL COLONIES OF INDUSTRIES
8.65
I - RAILWAYS Traction
7.50
K - SPECIAL CONTRACTS
K(1) AJ&K
295
3.17
K(1) AJ&K TOU - Peak
295
8.72
K(1) AJ&K TOU - Off Peak
295
4.82
Rawat Lab
6.58
TABLE 13.4
Effective from 1st Oct, 2009 (FOR ALL DISCOs)
Tariff Category
A-1 GENERAL SUPPLY TARIFF - RESIDENTIAL
Schedule-II
i. Upto 50 Units
1.40
ii. 1 - 100 Units
3.49
iii. 101-300 Units
5.26
iv. 301 - 700 Units
8.51
v. Above 700 Units
10.00
A-1(b) Time of Day (TOD) - Peak
9.76
A-1(b) Time of Day (TOD) - Off - Peak
5.96
Minimum Monthly Charges for: S/ Phase Rs. 75/- & 3/Phase Rs. 150/- per connection per month
10.40
A-2(b) Normal
315
6.49
A-2(c) Time of Use - Peak
315
9.17
A-2(c) Time of use - Off Peak
315
5.60
7.50
315
6.05
B-2(b) TOU Peak
315
9.17
B-2(b) TOU Off Peak
315
5.60
B-3 For All Loads upto 5000 KW (at 11/33kv) TOU - Peak
305
8.84
B-3 For All Loads upto 5000 KW (at 11/33kv) TOU - Off Peak
305
5.08
B-4 For All Loads (at 66, 132 kv & above) TOU - Peak
295
8.52
B-4 For All Loads (at 66, 132 kv & above) TOU - Off Peak
295
4.76
Fixed Min. Charges/month for B-1 Rs. 350/-, B-2 Rs. 2000/-, B-3 Rs. 50,000/- & B-4 Rs. 500,000/C-SINGLE POINT FOR PURCHASE IN BULK BY A DISTRIBUTION LICENSEE
C-1(a) At 400/230 volts, load upto 5 KW
7.91
C-1(b) At 400 Volts - load 5 - 500 KW
315
7.29
C-1(c) TOU Opt. Peak
315
9.02
C-1(c) TOU Opt. Off - Peak
315
5.51
C-2(a) At 11/33 kV load incl. 5000 KW
305
6.91
C-2(b) At 11/33 kV load incl. 5000 KW - Peak
305
8.70
C-2(b) At 11/33 kV load incl. 5000 KW - Off - Peak
305
5.00
C-3(a) At 66 kV & above and S/load > 5000
295
6.78
C-3(b) At 66 kV & above and S/load > 5000 - Peak
295
8.38
C-3(b) At 66 kV & above and S/load > 5000 - Off - Peak
295
4.69
D-AGRICULTURE SUPPLY TARIFFS
6.75
90
4.00
D-1(b) TOU for SCARP & Agri. > 5 KW- Peak
315
7.61
TOU for SCARP & Agri. > 5KW - Off Peak
315
3.42
10.00
10.50
7.50
125% of the relavent industrial supply
10.20
9.17
7.50
K - SPECIAL CONTRACT TARIFFS
K(1) AJ&K
295
3.36
295
9.24
295
5.11
Rawat Lab
6.97
TABLE 13.4
Effective from 1st Jan, 2010 (FOR ALL DISCOs)
Tariff Category
A-1 GENERAL SUPPLY TARIFF - RESIDENTIAL
Schedule-II
i. Upto 50 Units
1.66
ii. 1 - 100 Units
3.91
iii. 101-300 Units
5.89
iv. 301 - 700 Units
9.52
v. Above 700 Units
11.87
A-1(b) For load > 5 KW TOU - Peak
10.93
A-1(b) For load > 5 KW TOU - Off Peak
6.67
11.65
A-2(b) for load > 5 KW
315
7.27
A-2(c) For load > 5 KW TOU - Peak
315
10.27
A-2(c) For load > 5 KW TOU - Off Peak
315
6.27
8.76
315
6.78
B-2(b) TOU Peak
315
10.27
B-2(b) TOU Off Peak
315
6.27
B-3 All Loads upto 5000 KW (at 11/33kv) TOU- Peak
305
9.90
B-3 All Loads upto 5000 KW (at 11/33kv) TOU - Off Peak
305
5.69
B-4 All Loads (at 66, 132 kv & above) TOU - Peak
295
9.55
B-4 All Loads (at 66, 132 kv & above) TOU - Off Peak
295
5.33
Fixed Min. Charges/month for B-1 Rs. 350/-, B-2 Rs. 2000/-, B-3 Rs. 50,000/- & B-4 Rs. 500,000/C-SINGLE POINT FOR PURCHASE IN BULK BY A DISTRIBUTION LICENSEE
For supply at 400/230 volts
C-1(a) For load upto 5 KW
8.86
C-1(b) For Load 5 & upto 500 KW
315
8.17
C-1(c) load > 5 KW & upto 500 KW TOU Opt. Peak
315
10.10
C-1(c) For load > 5 KW TOU Opt. Off - Peak
315
6.17
C-2(a) For Supply at 11/33 KV load upto & incl. 5000 KW
305
7.74
C-2(b) At 11/33 kV load incl. 5000 KW Peak
305
9.75
C-2(b) At 11/33 kV load incl. 5000 KW Off - Peak
305
5.60
C-3(a) For supply at 66 kV & above and S/load > 5000 KW
295
7.60
C-3(b) At 66 kV & above and S/load > 5000 Peak
295
9.39
C-3(b) At 66 kV & above S/load > 5000 Off - Peak
295
5.25
D-AGRICULTURE SUPPLY TARRIFS
7.56
90
4.75
D-1(b) TOU SCARP & Agri. > 5 KW - Peak
200
9.03
D-1(b) TOU SCARP & Agri. > 5 Off - Peak
200
4.06
10.00
10.50
7.50
125% of the relevant industrial supply
11.42
10.27
8.90
K - SPECIAL CONTRACT TARIFFS
K(1) AJ&K
295
3.76
295
10.35
295
5.72
Rawat Lab
7.81
TABLE 13.5
OIL SALE PRICES
Date
Ex-Depot Sale Price
Motor Gasoline
HOBC (Automotive 100 Octane)
Super (90 Octane) Blend of Motor
Gasoline @ 60% and HOBC 40%)
Kerosene
HSD
LDO
Aviation gasoline (100LL)
JP-1:
i) For sale to PIA Domestic Flight
ii) For sale to PIA foreign
flights & foreign airline
iii) For Cargo & Technical
Landing Flights
JP-4
JP-8
16-01-2007
01-02-2007
16-02-2007
01-03-2007
16-03-2007
Rs/Ltrs
01-04-2007
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
31.52
30.57
31.66
31.75
33.22
33.53
33.93
36.65
33.30
35.64
35.02
36.80
35.63
36.89
37.87
38.46
38.11
38.78
TABLE 13.5
OIL SALE PRICES
Date
Ex-Depot Sale Price
Motor Gasoline
Kerosene
HSD
LDO
JP-1:
Landing Flights
JP-4
JP-8
1-05-2007
16-05-2007
01-06-2007
10-06-2007
16-06-2007
Rs/Ltrs
01-07-2007
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
36.48
36.58
37.03
36.96
36.90
38.07
40.89
41.91
41.29
42.01
42.23
42.49
41.91
42.06
40.86
42.00
41.30
43.22
TABLE 13.5
OIL SALE PRICES
Date
Ex-Depot Sale Price
Motor Gasoline
Kerosene
HSD
LDO
JP-1:
Landing Flights
JP-4
JP-8
16-07-2007
01-08-2007
16-08-2007
01-09-2007
16-09-2007
Rs/Ltrs
01-10-2007
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
35.23
37.73
32.37
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
38.67
39.34
38.36
37.38
39.19
40.96
42.44
43.86
42.32
44.55
41.15
43.53
40.50
42.49
41.94
44.40
43.83
46.26
TABLE 13.5
OIL SALE PRICES
Date
Ex-Depot Sale Price
Motor Gasoline
Kerosene
HSD
LDO
JP-1:
Landing Flights
JP-4
JP-8
16-10-2007
01-11-2007
16-11-2007
02-12-2007
16-12-2007
Rs/Ltrs
01-01-2008
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
53.70
64.88
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
41.12
44.13
49.68
50.89
47.89
48.85
44.21
46.43
46.89
49.58
51.42
55.42
52.69
56.68
50.61
53.53
51.73
54.54
TABLE 13.5
OIL SALE PRICES
Date
Ex-Depot Sale Price
Motor Gasoline
Kerosene
HSD
LDO
JP-1:
Landing Flights
JP-4
JP-8
17-01-2008
01-02-2008
17-02-2008
01-03-2008
17-03-2008
Rs/Ltrs
01-04-2008
53.70
64.88
53.70
64.88
53.70
64.88
58.70
64.88
62.81
74.77
62.81
74.77
35.23
37.73
32.57
35.23
37.73
32.57
35.23
37.73
32.57
38.37
41.23
36.07
41.13
44.13
38.59
41.13
44.13
38.59
49.98
47.39
48.83
52.77
56.45
59.47
53.07
55.72
51.06
53.02
52.06
54.51
55.46
58.66
57.79
62.53
59.17
65.69
TABLE 13.5
OIL SALE PRICES
Date
Ex-Depot Sale Price
Motor Gasoline
Kerosene
HSD
LDO
JP-1:
Landing Flights
JP-4
JP-8
18-04-2008
01-05-2008
16-05-2008
01-06-2008
21-06-2008
Rs/Ltrs
29-06-2008
65.81
77.77
68.81
80.77
68.81
80.77
68.81
80.77
68.81
80.77
75.23
88.85
41.44
47.13
41.59
41.44
50.13
44.59
41.44
50.13
44.59
41.44
50.13
44.59
41.44
50.13
44.59
49.73
55.14
49.05
62.31
67.33
72.25
84.90
80.07
81.40
61.32
65.69
65.70
73.95
70.02
79.11
80.05
92.39
73.59
83.29
76.13
84.62
TABLE 13.5
OIL SALE PRICES
Date
Ex-Depot Sale Price
Motor Gasoline
Kerosene
HSD
LDO
JP-1:
Landing Flights
JP-4
JP-8
01-07-2008
21-07-2008
01-08-2008
16-08-2008
01-09-2008
Rs/Ltrs
16-09-2008
75.69
88.85
86.66
96.08
86.66
96.08
86.66
96.08
86.66
96.08
81.66
96.08
49.73
55.14
49.05
58.37
64.64
56.50
58.37
64.64
56.50
58.37
64.64
56.50
58.37
64.64
56.50
61.87
68.14
60.00
82.10
90.36
86.11
77.07
75.34
71.44
76.79
85.35
83.75
93.6
79.45
89.34
72.59
80.31
72.13
78.57
68.56
74.66
TABLE 13.5
OIL SALE PRICES
Date
Ex-Depot Sale Price
Motor Gasoline
Kerosene
HSD
LDO
JP-1:
Landing Flights
JP-4
JP-8
01-10-2008
16-10-2008
01-11-2008
16-11-2008
01-12-2008
Rs/Ltrs
16-12-2008
81.66
96.08
81.66
96.08
76.66
96.08
66.66
81.08
57.66
72.08
57.66
72.08
61.87
68.14
60.00
61.87
68.14
60.00
61.87
68.14
60.00
56.87
61.14
53.00
51.87
57.14
48.00
51.87
57.14
48.00
69.01
59.75
50.90
48.57
42.54
36.40
64.36
72.22
55.26
62.96
42.66
54.10
37.67
51.77
33.55
45.75
30.73
39.61
TABLE 13.5
OIL SALE PRICES
Date
Ex-Depot Sale Price
Motor Gasoline
Kerosene
HSD
LDO
JP-1:
Landing Flights
JP-4
JP-8
01-01-2009
01-02-2009
01-03-2009
01-04-2009
01-05-2009
Rs/Ltrs
22-05-2009
57.66
72.08
57.66
72.08
57.66
72.08
57.66
72.08
57.66
72.08
56.21
70.28
51.87
57.14
48.00
51.87
57.14
48.00
51.87
57.14
48.00
51.87
57.14
48.00
51.87
57.14
48.00
51.87
55.71
48.00
35.89
35.62
31.24
31.83
36.17
36.17
31.40
39.09
33.54
38.84
32.60
34.45
33.50
35.04
37.06
39.38
37.06
39.38
TABLE 13.5
OIL SALE PRICES
Date
Ex-Depot Sale Price
Motor Gasoline
Kerosene
HSD
LDO
JP-1:
Landing Flights
JP-4
JP-8
01-06-2009
01-07-2009
08-07-2009
09-07-2009
01-08-2009
Rs/Ltrs
01-09-2009
57.66
72.08
57.66
72.08
57.66
72.08
57.66
72.08
57.66
72.08
56.21
70.28
51.87
57.14
48.00
51.87
57.14
48.00
51.87
57.14
48.00
51.87
57.14
48.00
51.87
57.14
48.00
51.87
55.71
48.00
35.89
35.62
31.24
31.83
36.17
36.17
31.40
39.09
33.54
38.84
32.60
34.45
33.50
35.04
37.06
39.38
37.06
39.38
TABLE 13.5
OIL SALE PRICES
Date
Ex-Depot Sale Price
Motor Gasoline
Kerosene
HSD
LDO
JP-1:
Landing Flights
JP-4
JP-8
01-10-2009
01-11-2009
Rs/Ltrs
01-12-2009
61.63
75.59
61.63
75.59
66.00
80.52
57.87
64.79
54.97
57.87
64.79
54.97
62.63
70.52
60.22
46.03
48.37
52.26
44.24
45.75
45.68
48.09
50.02
51.97
TABLE 13.6
GAS SALE PRICES
(Rs/mcft)
Category
20-08-2002 25-10-2002 21-03-2002 20-08-2008 1-7-2003
1-7-2004
1.12.2004
2-2-2005
DOMESTIC (Slab)
i Upto 1.77 M cu.ft./ Month
66.86
67.95
67.95
67.95
69.31
73.95
73.95
73.95
ii Upto 1.77 to 3.55 M cu.ft./ Month
100.73
102.37
102.37
102.37
104.42
111.42
111.42
120.61
iii Upto 3.55 to 7.1 M cu.ft./ Month
161.16
163.78
163.78
163.78
167.06
178.25
178.25
192.96
iv Upto 7.1 to 10.64 M cu.ft./ Month
201.45
213.06
213.06
213.06
217.32
231.88
231.88
251.01
v Upto 10.64 to 14.20 M cu.ft./ Month

vi Upto 4.20 to 17.75 M cu.ft./ Month
217.85
vii All over 17.75

COMMERCIAL
186.98
190.02
190.02
190.02
193.82
204.88
204.88
221.78
General Industry
166.18
168.88
168.88
168.88
172.26
182.09
182.09
197.11
Cement
222.32
222.32
222.32
222.32
209.78
209.78
209.78
227.09
CNG Station
166.18
168.88
168.88
168.88
172.26
182.09
182.09
197.11
Pakistan Steel
182.09
Captive Power
Independent Power Projects
FERTILIZER
SNGPL'S SYSTEM
i For Feed Stock
Pak-America Fertilizer Ltd. PAFL
36.77
36.77
36.77
36.77
36.77
36.77
36.77
36.77
F.F.C Jordan
36.77
36.77
36.77
36.77
36.77
36.77
36.77
36.77
Dawood Hercules/ Pak Arab
62.57
62.57
62.57
62.57
67.26
73.99
73.99
73.99
Pak china/ Hazara
66.40
66.40
66.40
66.40
71.38
78.52
78.52
78.52
ii For Fuel Generation
166.18
168.88
168.88
168.88
172.26
182.09
182.09
197.11
168.88
168.88
168.88
(a) Engro Chemical
13.09
13.09
61.68
61.68
66.31
72.94
72.94
72.94
FFC
61.68
61.68
61.68
61.68
66.31
72.94
72.94
72.94
(b) Pak Saudi
61.68
61.68
61.68
61.68
66.31
72.94
166.18
166.88
168.88
168.88
172.26
182.09
Dawood and Pak Arab

FOR MARI GAS CO. SYSTEM
i For Feed Stock
ii For Power Generation
72.94
182.09
182.09
POWER Stations
SNGPL & SSGCL'S SYSTEM
Liberty Power Ltd.
166.18
168.88
168.88
168.88
172.26
182.09
182.09
197.11
190.80
190.80
190.80
222.89
235.77
234.33
235.76
262.03
GAS DIRECTLY SOLD TO

WAPDA'S GUDDU POWER STATION
SUI FIELD (917 BTU)
145.51
KANDHKOT FIELD (866 BTU)
160.54
163.15
163.15
163.15
166.41
175.90
175.90
190.41
MARI FIELD (754 BTU)
156.14
158.68
158.68
158.68
161.85
171.08
171.08
185.19
SARA/SURI FIELD
156.14
158.68
158.68
158.68
161.85
171.08
171.08
185.19
(Contd.)
Billing/pricing system changed from Rs. Per thousand cubic feet to Rs. Per million btu w.e.f. 1-1-2002
TABLE 13.6
GAS SALE PRICES
(Rs/mcft)
Category
1-7-2005
1-1-2006
1-7-2006
1-2-2007
1-1-2008
73.95
80.98
85.03
78.38
78.38
30-6-2008 01-01-2009
DOMESTIC (Slab)
i Upto 1.77 M cu.ft./ Month
78.38
82.30
ii Upto 1.77 to 3.55 M cu.ft./ Month
127.62
147.41
89.03
82.07
82.07
82.07
86.17
iii Upto 3.55 to 7.1 M cu.ft./ Month
204.17
235.84
162.07
149.40
149.40
149.40
156.87
iv Upto 7.1 to 10.64 M cu.ft./ Month
265.59
306.79
v Upto 10.64 to 14.20 M cu.ft./ Month
259.29
239.01
239.01
313.10
332.12
337.30
310.92
310.92
407.31
432.06
vi Upto 4.20 to 17.75 M cu.ft./ Month
529.50
vii All over 17.75
561.67
730.17
COMMERCIAL
234.67
271.07
298.03
268.23
283.05
370.80
393.33
General Industry
208.56
240.91
264.87
238.38
251.55
329.54
339.43
Cement
240.28
277.55
305.15
305.15
335.67
428.89
454.95
CNG Station
208.56
240.91
264.87
238.38
291.36
388.32
427.15
Pakistan Steel
208.56
Captive Power
208.56
240.91
264.87
238.38
251.55
422.60
339.43
Independent Power Projects
295.03
FERTILIZER
i For Feed Stock
(i)For Feed Stock
Pak.Americal Fertilizer Ltd.PAFL
36.77
36.77
36.77
36.77
36.77
36.77
36.77
F.F.C Jorden
36.77
36.77
36.77
36.77
36.77
36.77
102.01
Dawood Hercules/ Pak Arab
83.24
83.24
91.52
91.52
91.52
91.52
96.14
ii For Fuel Generation

(ii)For Fuel Generation
88.34
88.34
97.11
97.11
97.11
97.11
102.01
208.56
240.91
264.87
238.38
251.55
329.54
339.43
82.06
82.06
90.22
90.22
90.22
90.22
94.78
82.06
82.06
90.22
90.22
90.22
90.22
94.78
264.87
238.38
251.55
329.54
339.43
Dawood and Pak Arab

i For Feed Stock
(i)For Feed Stock
(a) Engro Chemical
FFC
ii For Power Generation
(ii)For Power Generation
82.06
208.56
POWER Stations
SNGPL & SSGCL'S SYSTEM
Liberty Power Ltd.
208.56
303.25
264.87
238.38
251.55
329.54
349.56
303.25
467.52
445.98
443.06
443.06
848.10
255.86
230.28
243.00
318.34
337.68
GAS DIRECTLY SOLD TO

WAPDA'S GUDDU POWER STATION
SUI FIELD (917 BTU)
KANDHKOT FIELD (866 BTU)
201.47
232.72
MARI FIELD (754 BTU)

SARA/SURI FIELD
195.95
195.95
226.34
248.85
223.96
236.34
309.61
328.42
248.85
223.96
236.34
309.61
Source : Hydrocarbon Development Institute of Pakistan
Billing/pricing system changed from Rs. Per thousand cubic feet to Rs. Per million btu w.e.f.1-1-2002
Traansp
portand
d
Com
mmuniccatio
ons
14
An efficieent transport system conttributes to economic growth by loweering domestiic production

n cost
through timely
t
delive
ery of raw materials,
m
enh
hancing economies of scaale in the prroduction pro
ocess,
integratin
ng markets, creating
c
econ
nomic opporttunities and communicatio
c
on links amo
ong people. In this
fashionit alsoenhance
esthecompeetitiveadvanttageoftheecconomyinprroductionofggoodsandthereby
promotesstrade.Acom
mpetenttranssportsystemwillalsoenco
ouragetourissmandforeigninvestmentt.This
sectorgen
neratesalarggenumberoffemploymen
ntopportunities,currentlyy6percentoffemployedlaabour
force is said to be enggaged with this sector. Th
he sector alsso contributes to the goveernment reveenues
products,and
dfees
throughtaxesandduttiesonproductionandimportofvehiclesandparts,petroleump
onownerrshipandoperationofvehicles.
Globally transport an
nd communiication is ch
hanging everry aspect off human lifee, from trad
de to
manufacturing, education, researcch, entertainm
ment, culturee and defencce. Most em
merging econo
omies
beingawaareofthestrengthofthesseservicesarretransformingtheirecon
nomiestowarrdsknowledgeand
communications. In order
o
to keeep pace with
h the global environmentt, Pakistan is also developing
efficient and well inttegrated tran
nsport and communicatio
c
on system. With
W
this it will emerge as a
competitiveeconomy,enhancingittstradeperfo
ormanceandttherebyattainingsustainaablegrowth.
Road den
nsity of any country
c
is an indicator of the level of prosperity and developm
ment. Currentt road
density in
n Pakistan is 0.32km/km2 which is much less eveen from regio
onal standard
d. Governmeent of
2
Pakistanisendeavouringhardtodo
oubleroaddeensityto0.64
4km/km asshowninFig1
14.1
3.5
3.07
Fig1:RoadDensityComparison
0.08
0.15
0.17
0 23
0.23
0.32
1.00
0.68
0.20
0.5
0.65
1.0
1.04
1.5
1 62
1.62
2.0
1.70
2.5
1.62
Roaddensity
3.0
0.0
Source:NHA
201
14.1ROADTRANSPORT
Roads have become the most important segment of transport sector in Pakistan with ever increasing
relianceonroadtransportation.In1947,relianceonroadswasonly8%,however,theroadsnowcarry
over96%ofinlandfreightand92%ofpassengertrafficandareundoubtedlythebackboneofPakistans
transport sector. From only around 50,000 km in 1947, Pakistans current road network is now more
than260,000km.ThisincludesNHAnetworkofaround12,000km,whichdespitebeingmerely4%of
theoverallroadnetworktakes80%ofPakistanscommercialtraffic
14.11ROADNETWORK:
Pakistansroadnetworkisvitalforthemovementofpeopleandgoodsandplaysanimportant
roleinintegratingthecountry,facilitatingeconomicgrowthandreducingpoverty.Pakistanhas
a road network covering 259,618 kilometres including 179,290 KM of high type roads and
80,328 KM of low type roads. Total roads, which were 229,595 KM in 199697, increased to
259,618 KM by 200910 (JulMar) an increase of 13 percent. A sizable and continuous
improvement of the high type road network can be observed from 199697 to 200910 (Jul
Mar),intable14.1.
Table14.1:LengthofRoad
(Kilometers)
LowType
Total
FiscalYear
Length
%Change
Length
%Change
199697
103,478
3.6
229,595
5.2
199798
107,423
3.8
240,885
4.9
199899
110,132
2.5
247,484
2.7
199900
110,140
0
240,340
0.3
200001
105,320
4.4
249,972
0.7
200102
102,784
2.4
251,661
0.7
200203
98,943
3.7
252,168
0.2
200304
97,527
1.4
256,070
1.5
200405
95,373
2.2
258,214
0.8
200506
91,491
4.1
259,021
0.3
200607
86,370
2.8
259,197
1.1
200708
84,038
5.5
259,038
1.3
200809
83,140
2.7
260,200
0
200910(JulMar)
80,328
3.4
259,618
0
Sources:NationalTransportResearchCentre
#:Thepercentagechangeinlowtyperoadscanbenegativesincemost
oftheseroadsarebeingconvertedtohightyperoads.
HighType
Length
%Change
126,117
6.5
133,462
5.8
137,352
2.9
138,200
0.6
144,652
4.7
148,877
2.9
153,255
2.9
158,543
3.5
162,841
2.7
167,530
2.9
172,827
3.2
175,000
0.8
177,060
1.3
179,290
1.2
Graphical representation of high type and low type of roads in Pakistan since 199697 are shown in
Fig1
14.12NationalHighwayAuthority(NHA)
National Highway Authority (NHA) network plays a major role in the allweather reliability,
reducedtransportation costsandincreasedaccesstomarketsforlocalproduceandproducts,
accesstonewemploymentcentres,employmentoflocalworkersontheproject,betteraccess
tohealthcareandothersocialservices,strengtheningoflocaleconomies.
202
TransportandCommunications
LengthofRoad
HighType
LowType
200,000
(Kilometers)
180,000
160,000
140,000
120,000
100,000
80,000
200910
(JulMar)
200809
200708
200607
200506
200405
200304
200203
200102
200001
60,000
Source:NTRC
NHA has performed reasonably well during the current and previous financial years, as could be
appreciatedfromfollowingfactsandTable14.2.
a.
NHAlaunched30newdevelopmentprojectscoveringalengthofalmost1000kminclusiveofa
numberofbridges,flyovers&interchanges
b.
NHA completed 23 development projects costing Rs. 41 billion NHA has targeted completion of
differentprojectswithatotallengthofwellabove2000kmduring2010
c.
Launching of new projects entailed creation of 2500 PCI vacancies within NHA of different
nomenclature/cadres. Besides these direct job opportunities, the development projects of NHA
have indirectly resulted in creation of thousands of jobs, which the masses in Pakistan so
desperatelyneed.
Table14.2:COMPLETIONOFDEVELOPMENTPROJECTSSINCE2008
Project/Section
Route
Sindh
1. LyariExpressway(SBC)
LEP
2. SirShahSulemanSohrabGoth(NBC)
LEP
includingInterchanges
3. ManghopirInterchange(SBC)
LEP
4. LarkanaKhairpurBridge(RiveIndus)
Balochistan
5. GwadarPleriJiwani
N10
6. PleriGabd
N10
7. QuettaWesternBypass
N25
8. LakpassTunnel(with5kmapproaches)
N25
9. HubUthal
N25
10. KhanozaiMuslimBagh
N50
11. MuslimBaghQilaSaifullah
N50
NWFP/GB
Km
(CostinM)
Completion
Feb08
11870
Jul09
1445
Feb10
Dec09
69
37
23
180m
83
50
50
1996
330
375
921
3023
1169
1713
Oct08
Dec09
Aug08
Jun09
Jan10
Apr09
Sep09
203
Table14.2:COMPLETIONOFDEVELOPMENTPROJECTSSINCE2008
Project/Section
Route
12. NaranJalkhad
N15
13. TimergrahAkhagram
N45
14. LowariRailTunnelProject(excavation)
N45
15. SouthaccessroadtoLRTP
N45
16. DargaiChakdara
N45
Punjab
17. ZahirPirTMPanah(SectionII)
N5
18. BabaFaridBridge(RiverSutlej)
19. ShershahBridge(RiverChenab)
N70
(with13kmapproaches)
20. SatraMileLowerTopa
N75
NationalHighwayImprovementProgram
21. UbauroShWahan
N5
22. MianChannuSahiwal
N5
23. NowsheraPeshawar
N5
Km
40
25
8.6
9
25
(CostinM)
1969
570
5546
245
622
Completion
Dec08
Oct09
Jan09
Jun09
May09
45
1531
913
Jun08
Jan10
950
Sep08
43
2949
Mar10
50
46
58
1200
863
789
Jan10
Dec09
Aug09
Source:NHA
Operationandmaintenance
Byadoptingtheprincipleofawardingtolloperation&managementcontractsonguaranteedrevenue
basis, NHA has been able to increase the toll revenue which is the lifeline for maintenance of NHA
networkby36%asshowninTable14.3.
Table14.3ComparisonofGrosstollcollection
Revenuesource
(JulyFeb)
200809
Motorways
1332
N5
2300
OtherHighways
810
Total
4442
(JulyFeb)
200910
1512
3367
1177
6056
Increase
180
1066
367
1613
(RsinMillion)
%Changes
13.54
46.35
45.29
36.32
Source:NHA
14.2PakistanRailways
An efficient transportation system plays a vital role in the economic development of a country. The
government vision for economic growth and poverty reduction requires massive investment and
developmentofinfrastructureforsustainableeconomicgrowth.PakistanRailwayshasadefiniteedge
overroadsforlonghaulandmassscaletrafficmovementbothforpassengerandfreightinadditionto
providingasafe,economicalandenvironmentfriendlymodeoftransport.
Throughout world history, rail traffic has played an important part in the development and economic
prosperityofnations.Railwaysareavaluablesourceofemploymentwhilegeneratinglargeamountsof
revenue to the benefit of the economy. An effective railway system facilitates commerce and trade,
reduces transportation cost (monetary and nonmonetary), and promotes rural development and
nationalintegrationwhilereducingtheburdenoncommuters.PakistanRailwayswastheprimarymode
of transportation in the country till the seventies. However, owing primarily to a diversion of already
scarceresourcestowardstheexpansionoftheroadnetwork,theperformanceandconditionofPakistan
204
Railwaysdeclinedanditsshareofinlandtrafficreducedfrom41percentto10percentforpassenger
and73percentto4percentforfreighttraffic.
Duringthelastnineyears(20002009),PakistanRailwayshasshownimprovingtrendinbothpassenger
andtrafficregisteringanaverageincreaseof3.2percentand4.0percentperannum,respectively(See
Table14.4).Adecreasein passengertrafficwasseenfortheyear20092010(JulMar)withanegative
growthrateof7.15percentduetolesstravellingasaresultofdeteriorationininternalsecuritywhereas
freight traffic has decreased by 13.1 percent over the same period of last year. The negative growth
trendcanbeattributedtotherecessionintheeconomicgrowthinthecountryaswellaslawandorder
situationcreatedinthecountrybythemiscreant.Thefallingrowthratesforfreighttrafficduringthe
current financial year has been attributed to the less availability of locomotives for freight traffic
becauseofnonprocurementofsparesduetofinancialconstraint.Manypartoftherailwaytrackhave
been destroyed with immense damage being caused to the rolling stock and stations of Pakistan
RailwaysduringriotsinDecember,2007.Thedamagedassetsduringriotshavenotbeenrepaireddue
to reduction in PSDP allocation last year. However, Pakistan Railways is undertaking a number of
developmentprojectsandadoptingbetterpoliciesaimedatmodernizationofPakistanRailways.
Table:14.4PassengerTraffic(MillionPassengerKm)
FreightMillionTonKm
PassengerTraffic(Million)Passenger
FreightMillionTon
Km
Km
FiscalYear
Road
%Change
Rail
%Change
Road
%Change
Rail
%Change
199697
163,751
5.9
19,114
1.1
84,345
5.6
4,607
9.3
199798
173,857
6.2
18,774
1.8
89,527
3.1
4,447
3.5
199899
185,236
6.5
18,980
1.1
95,246
6.4
3,967
10.8
199900
196,692
6.2
18,495
2.6
101,261
6.3
3,753
5.4
200001
208,370
5.9
19,590
5.9
107,085
5.7
4,520
20.4
200102
209,381
0.5
20,783
6.1
108,818
0.2
4,573
1.2
200203
215,872
3.1
22,306
7.3
110,172
1.2
4,830
5.4
200304
222,779
3.2
23,045
3.3
114,244
3.7
5,336
10.7
200405
232,191
4.2
24,238
5.2
116,327
1.8
5,532
3.6
200506
238,077
2.5
25,621
5.7
117,035
0.6
5,916
6.9
200607
26,446
3.2
5,453
7.8
200708
24,731
6.5
6,178
13.3
200809
25,702
3.95
5,896
4.10
200910*
18,270
7.15
3,925
13.2
(JulMar)
*Estimated
Source:MinistryofRailways&MinistryofCommunications
14.21FutureOutlook:
In order to continue improvements and to consolidate reforms, Pakistan Railways is struggling to
increase its competitiveness, responsiveness and efficiency. Pakistan Railways is planning to take a
seriesofinterlinkedinitiativesasdiscussedbelow,whichwillenableittocompeteeffectivelyinthefast
growingtransportsectorinPakistan.
x PakistanhasalreadycompletedprefeasibilitystudyforestablishingaraillinkwithChina.This
raillinkcouldfurtherboosttraderelationsbetweenthetwocountriesbyfacilitatingthealready
growingtradewithChinaandoperationsofGawadarSeaPort.
205
x Pakistan Railways has signed contract with Chinese supplier for the maintenance of Chinese
locomotivestoimprovereliabilityandavailabilityoflocomotive.
x PakistanRailwayisencouragingprivatesectortobringrollingstockforrunningofpassengerand
freighttrainsbypayingtrackaccesscharges.
x Acontractagreementforprocurementandmanufacturingof202Nos.coacheshasbeensigned.
150Nos.Coachesoutof202Nos.shallbemanufacturedinPakistanCarriageFactoryIslamabad
fromcompletelyknockdownkitsduringnextthreeyears.
x 150 Nos. out of 500 Nos. completely knock down (CKD) wagons received from China will be
manufactured in Pakistan Railways workshop in Moghalpura this year against the project for
Procurement/Manufactureof530highcapacitywagons.
x Rehabilitation of 400 old coaches is underway with 80 coaches expected to be rehabilitated
duringthecurrentfinancialyear.
x Another ongoing development project is the doubling of tracks from KhanewalRaiwind (246
Km).
x DoublingoftrackwillbecompletedfromChichawatnitoOkarastationsduringtheperiodunder
review.
Pakistan Railways has finalized loan agreements for
variousprojectsforimprovementofoperationonthe
system and letter of credit are being established for
thefollowingprojects:
x Procurement/manufacture of 75 diesel
electriclocomotives(DELocos).
x Procurement/manufactureof202highspeed
moderncoaches.
x Replacement of old signaling gear on
LodhranShahdaraBaghSection.
x Rehabilitation of signals system damaged
duringriots.
The earnings of Pakistan Railways since 199899 are
giveninTable14.5
Table14.5:Earnings ofPakistanRailways
(Rs.Million)
FiscalYear
Earning
%Change
199899
9,310
199900
9,889
6.2
200001
11,938
20.7
200102
13,046
9.3
200203
14,812
13.5
200304
14,636
1.2
200405
18,027
23.2
200506
18,184
0.9
200607
19,194
5.5
200708
19,973
4.1
200809
23,160
16.0
200910(JulMar)
16,875
3.3
Source:MinistryofRailways
14.3PAKISTANCIVILAVIATIONAUTHORITY(CAA)
Civil Aviation Authority is responsible for the promotion and regulation of Civil Aviation activities and
development of infrastructure for safe, efficient, adequate, economical and properly coordinate air
serviceinPakistan.CCAplaysanimportantroleinthedevelopmentofacountryseconomybyproviding
fastandefficientaccessbetweendifferentpartsofthecountryaswellasdifferentdestinationaround
theworld.Privateparticipationonthisfronthasbeenencouragedthroughconcessionandincentivesfor
development of airports and airlines to increase the availability of air transport services both
domestically and internationally it is important to construct and maintain airports in the country to
facilitateeconomicactivityinanincreasinglyglobalizeworld.Thefollowingmajornew/existingairports
airbeingconstructedbyCAAcurrently.
206
i)NewBenazirBhuttoInternationalAirport(NBBIA)atIslamabad
TheNewBenazirBhuttoInternationalAirport(NBBA)willbeastateoftheartwithmodularfacilitiesfor
both domestic and international passengers and cargo capacity to accommodate the projected
demands. The facilities planned include Passenger and Cargo Terminal Buildings, Runway System,
Aprons, Taxiways, Airfield Lighting System, Air Traffic Control Tower, NAVAIDs, utilities and
infrastructureincludingroads,carparkingfacilities,powersupplysystems,stormwaterdrainage,swage
treatmentplant,etc.Theprojectisplannedtobecompletedbytheendof2012.
ii)NewGwadarInternationalAirport(NGIA)
InordertoencouragedevelopmentofGwadar,Govt.ofPakistanhasapprovedconstructionofanew
internationalairportatGwadar.TheGovt.ofPakistanalsoapprovedexecutionoftheprojectasaPSDP
scheme.SultanateofOmanhasalsoagreedtoprovideagrantof17.5MUS$forthisproject.Theentire
projectisplannedtobecompletedbyDecember,2012.
iii)UpgradationofMultanInternationalAirport
The facilities including Terminal Building at Multan International Airport are inadequate. CAA has
therefore,plannedtoupgradetheexistinginfrastructureattheairportforB747/B777operationson
modernlinestosupportthe21stcenturyaircrafttechnologyandtomeettheoperationalrequirements
ofnext1520years.
iv)ExpansionofPeshawarInternationalAirport
SchemefortheupgradationandexpansionofexistingfacilitiesatPeshawarAirporthasbeenprepared
byCAA.M/sNESPAKhasbeenappointedasConsultantforPlanning,DesigningandSupervisionofthe
Project.
14.31PAKISTANINTERNATIONALAIRLINE(PIA):
Theairlineindustryprovidesservicestovirtuallyeverysegmentofthecountryandplaysanintegralrole
inthedevelopmentofeconomy.Theairlineindustryitselfisamajoreconomicforce,intermsofbothits
ownoperationsanditsimpactsonrelatedindustriessuchastradeandtourism.
The year 2009 was worst for the airline industry. According to IATA, passenger demand all over the
worlddeclinedby3.5%anditisexpectedthatindustrywillpostUS$11billionlosses.Althoughthere
wassomereliefonthefuelbillbutthepassengerandfreightdemandcontinuedtodisappearbecauseof
economicrecessionandairlinesfacedovercapacity.
Asian Pacific carriers continued to be the hardest hit by the current economic turmoil. Passenger
demanddeclinedby5.6%andexpectedlossessurgedtoUS$3.4billionforyear2009.
Despiteuncertainenvironmentinthecountry,globaleconomicrecessionandastiffcompetitionfrom
theregionalcarriers,PIAtosomeextent,hasmanagetomaintainitspassengertrafficduringyear2009.
TherewassomereprieveonfuelbillbutthedepreciationofPakRupeeascomparetoUS$andfinancing
costonfleetandnonfleetloansseverelyhurtPIA.
Duringtheyear2009PIAincreaseditsoverallcapacityby1.7%whileitspassengertrafficandseatfactor
witnessadropof0.2%and1.3pprespectivelyoversameperiodlastyear,mainlyduetoweakdomestic
traffic. Numberpassengerscarriedoninternational sectorsincreasedby1.0%ascompare toprevious
207
year.Whereasondomesticsectorsnumberofpassengerscarrieddecreasedby4.2%ascomparetolast
year.Declineindomestictrafficcanbeattributedtoeconomicdownturn,lawandordersituationinthe
countryandincreasingcompetitionfromthedomesticcarriers.
Despitetheeconomicdownturnandthesituationincountry,duringyear2009,comparedtolastyear,
overallrevenueoftheairlineincreasedtoRs.94.6billion,anincreaseofaround6%.
PIAreduceditslossesbyRs.30.3billiontoRs.5.8billionduringtheyear2009comparetosameperiod
lastyear.Thereductioninlosseswasmainlyduetoreductionincostandincreaseinrevenues.Themain
contributiontothelossofRs.5.8billionincludesforeignexchangetranslationlossofRs.6.7billiononUS
$dominatedfleetloans/leaseobligationsandfinancecostofRs.9.2billion.
14.4PORTSANDSHIPPING
a)KarachiPortTrust:
ThesteadyandcontinuousprogressmadebyKPThashelpedboostthenationaleconomy.TheKarachi
Port Trust established an annual cargo handling record of over 38.7 million tons during 200809,
showing a slight increase of 4.1 percent over last years record cargo handling of 37.2 million tons.
However,therehasbeenariseinactivityduringthefirstsixmonthsofthecurrentfiscalyear,showing
remarkableincreaseinalltypesofcargohandlingincludingbulk,Breakbulkandcontainers.Duringthe
first six months of the current fiscal year, 20.5 million tones of cargo have been handled. Statistics of
cargohandledduringlastmanyyearsaregiveninTable14.6.
Table14.6:CargoHandledatKarachiPort
Year
Imports
%Change
199697
18,362
1.9%
199798
17,114
6.8%
199899
18,318
7.0%
19992000
17,149
6.4%
200001
20,064
17.0%
200102
20,330
1.3%
200203
19,609
3.5%
200304
21,732
10.8
200405
22,100
1.7%
200506
25,573
15.7%
200607
23,329
8.8%
200708
25,517
9.4%
200809
25,367
0.6%
JulyDec
14,009
200910
Exports
5,113
5,570
5,735
5,613
5,918
6,362
6,273
6,081
6,515
6,697
7,517
11,676
13,365
6,536
%Change
5.2
8.9%
3.0%
2.1%
5.4%
7.5%
1.4%
3.1%
7.1%
2.8%
12.2%
55.3%
14.5%
Total
23,475
22,684
24,053
22,762
25,982
26,692
25,882
27,813
28,615
32,270
30,846
37,193
38,732
20,545
(000Ton)
%Change
0.4%
3.4%
6.0%
5.4%
14.1%
2.7%
3.0%
7.5%
2.9%
12.8%
4.4%
20.6%
4.1%
Source:KPT
b)PakistanNationalShippingCorporation(PNSC)
PakistanNationalShippingCorporation(PNSC)manages14withatotalcapacityof649703metrictones
deadweight.TheconsolidaterevenuesoftheGroupforthequarterendedDecember31,2009wereRs
1,833million(includingRs595millionfromPNSC),makingatotalofRs3,566million(includingRs1,133
million from PNSC)for the halfyear under review as against Rs.6,767 million for the half year ended
December31,2008.
208
TheearningspersharefortheperiodunderreviewwereRs.2.54asagainstRs.9.77oflastyear.PNSC
made a net after tax profit of Rs.336 million as against Rs.1, 291 million of last year. The decline in
revenuesandprofitabilitywasasexpected,duetodownturninglobalshippingactivities.
FutureProspects
Aspartofitsfleetreplacement program,PNSChascontractedtopurchasetwoAFRAMAXoiltankers.
The vessels are expected to be delivered soon in the current financial year. PNSC is in the process of
replacingitsageingfleet,whichwillhaveapositiveimpactonitsprofitability.
c)GawadarPort
TheGawadarPortstarteditsshiphandlingoperationsduringMarch2008byberthingthefirstbiggest
shipeverhandledinPakistan.Thiswas76,000DWTPanamaxBulkernamedPOSGlosywhichoffloaded
63,000M.TonsofWheat.ThefulloperationalizationofGawadarPortwillbepossibleaftercompletion
oftheroadlinkage.A949kmExpresswayfromGawadartoRathoderoisalreadyunderconstructionand
isabout65%complete.SimilarlyinordertomeettheelectricitydemandsofthePort,anew132KVA
Grid Station is under construction near Gawadar Port which will be fed from 220 KVA main Grid
connectedfromIran.
d)PortQasimAuthority:
Port Qasim is the first industrial and commercial port of Pakistan operating under landlord concept.
Todayitcatersforaround40%shippingrequirementsofnationaleconomy.PQAhandledavolumeof
18.8milliontonnescargoduringthefirstninemonthsofcurrentfinancialyear,showinganimpressive
growthof5percentovercorrespondingperiodoflastyear.
The volume of import has declined by 6 percent from 14,243 thousands tones to 13,383 thousands
tonesinthecurrentfinancialyear.However,thevolumeofexportincreasedby44percentfrom3,773
thousandstonesto5,448thousandstonesinongoingfiscalyear(seeTable14.7)
Table14.7:CargohandledatPortQasim
Period
Import
%Change
199798
13,823
39
199899
12,191
12
199900
13,238
09
200001
11,841
11
200102
10,932
08
200203
11,980
10
200304
11,264
06
200405
16,006
42
200506
17,588
10
200607
19,511
11
200708
21,502
10
200809
19,445
10
JulyMarch
200809
14243
12
200910
13383
6
Export
1,144
1,742
1,703
1,747
2,385
3,129
2,859
3,431
3,985
4,839
4,922
5,584
%Change
65
52
02
03
36
31
09
20
16
21
02
16
3773
5448
03
44
(000Tonnes)
Total
%Change
14,967
41
13,933
07
14,941
07
13,588
11
13,317
02
15,109
13
14,123
07
19,437
37
21,573
11
24,350
13
26,424
09
25,030
05
18016
09
18831
5
Source:PortQasimAuthority
209
FuturePlaans
x Th
here has bee
en marked im
mprovement in cargo han
ndling over laast five years. Average annual
grrowth has been
b
around 13% over last five yeaars which caalls for deveelopment off new
beerths/terminal for capacitty enhancem
ment. The currrent handling capacity off port with eleven
e
beerths is 40 million ton
nnes per an
nnum. To meet
m
growing requiremeents for cap
pacity
en
nhancement,,PQAhaschaalkedoutan ambitiousdeevelopmentp
plan.Asagain
nst3privatessector
projects in 25
5 years of Port
P
Qasim existence,
e
8 private sector projects which
w
includ
de 2nd
Container Term
minal, Grain & Fertilizer Terminal,
T
Coaal & cement//Clinker Term
minal, GasPortt LNG
nd
nd
Flloating Terminal, 2 IOCB, 2 Oil jettty are curren
ntly under co
onstruction/p
planned in private
seectorsince20
006.Withtheecompletionoftheseterm
minalsby201
13,PQAhand
dlingcapacityyshall
beeincreasedto86millionttonnesperan
nnumshowingganincreaseeof115%.
x To
o accommod
date bigger veessels, PQA plans
p
deepen
ning of navigaation channeel of a cost of US$
20
00millionforrallweather14meterdraughtatPQA.
x PQ
QA is also viggorously purssuing development of ind
dustrial comp
plex. PQA plans to spend more
th
han18billionrupeesonin
nfrastructurefacilitiesinvaariousindustrrialzones.
14.5Tele
ecomSector
Theyear2
2009hasbee
enatoughpatchforPakisttans
LocalLoop
Teledensity
economy in general, the ripple effects
e
of wh
hich,
C
CellularMobile
reached the
t telecom sector as weell. Although the
W
WirelessLocalLoop
p
80
aftermath
hs of precarrious securitty situation and
2.7
2.2
2.2
unstable political an
nd economicc condition has
60
3
slowed down
d
the paace of teleccom growth, yet
timely interventions by the Authority and
40
3.4
extraordin
nary efforts by telecom companies have
h
54.7 58.2 58.7
4
0.9
ensured that
t
the sector maintainss at least a linear
20
22.2
growth paattern. With technologicaal revolutionss like
1.4
1.7
1.1
1
0.7
1.6
0
SIM Verification Systtem 789, SIM
S
Informaation
200506 2006
607 200708 20
00809 10Feb
System 6
668 and ach
hievements like Reductio
on in
Source:PTA
Taxes/Dutties, formulaation of various regulatiions;
PTAhasb
becomeafron
ntrunneramo
ongthesucceessfultelecom
mregulatorso
oftheworld.
In terms of statistics, industry has shown possitive
growth off 2.43% in th
he last two quarters
q
of 2009.
2
Teledensityhasreache
ed62.4%(Feeb10),asiggnof
continuou
usgrowthin theindustry..Cellularindu
ustry
has a 94
4% share in
n total teleecom teledensity
followed byfixedlocalloop(FLL)3
3.5%andwireeless
local loop
p (WLL) 2.5%
%, therefore, performancce of
cellular in
ndustry is of utmost im
mportance to the
overallsectorgrowth.
e
14.5iCellularMobile
e
of Feb 2010, Cellular subscriibers
At the end
reached 96.2 million depicting a net addition of
CelllularSubscrribers
88
100
0
80
0
94.3
96.2
63.2
60
0
40
0
33.9
20
0
0
200506 200
0607 200708 200809
2
10Feb
Source:PTA
210
TransportaandCommuniccations
1,889,199
9subscribers (JulFeb10) withtheaveerageof209,9
911permonth.CellularSSubscribersgrrowth
rate of 2..0% has been
n achieved during Jul 09Feb 10. Condition of celllular industryy was quite topsy
t
turvyinth
helasttwoq
quarters.Cellu
ulargrowthrratecameto agradualhaltintheperio
odfromAugu
ustto
October, 2009 mainly due to Ufon
nes churn. We
W can see a definite posiitive trend affter October, 2009
which sud
ddenly dropp
ped in January, 2010 mainly due to Warids
W
churn
n of subscrib
bers based on the
Active Su
ubscriber de
efinition of PTA.
P
But, the industry iss back on itts feet and continues
c
to
o gain
momentu
umsincelastfourmonths..MobilinkandTelenoraddedthehighestnumbero
ofsubscribersswith
2.1mnan
nd2.0mnresspectivelywh
hileWaridand
dUfonelostaabout1.6mn
nand1.2subscribers.Zonggalso
added0.9
96newsubscribersrespectively.
In terms of share in cellular
c
industtry (Feb 10
0), Mobilink, being the SM
MP, leads witth overall shaare of
potwith23.8%share.UfoneandWarid
dshare19.5%
%and
32.5%.Teelenorcontinuestoholdthesecondsp
16.9respeectively.Zonggfollowswith
hmarketsharreof7.2%.
CellulaarMobileShaare
(Jun0
09)
Zong
6.77%
Ufone
21.20%
Mobilin
nk
30.89%
%
(Feb10)
Instaphone
0.04%
Saales
0.0
00%
Sales
7.20%
Telenor
22.15%
Sales
23
3.80%
Sales
19.50%
Warid
18.96%
Sales
16.90%
1
Sales
32.50%
Source:PTA
Source:PTA
14.5iiFixxedLocalLoo
op
6,00
00,000
5,00
00,000
4,00
00,000
3,00
00,000
2,00
00,000
1,00
00,000
9Dec
200809
200708
200607
200506
ningworldovverdue
Fixedlineserviceshavebeendeclin
w
solutions.
to increasing popularity of wireless
Pakistan is also experiencing a
a fast decliine in
subscriptiion during last few years with
h the
introductiion of wireless based technologies
t
which
FixedLineSubssribers
200405
Fixed Loccal Loop is one of the oldest meaans of

communication in th
he country's telecom ind
dustry.
SinceDerregulationof telecomsecttorin2003,aatotal
of 84 liceenses were issued to 37
7 operators for
f 14
telecom regions in Pakistan.
P
It was
w expected
d that
fixed line teledensity would increaase, as PTCL would
be forced
d to reduce
e the tariffs and improve its
standardss in lieu off intense co
ompetition in the
market.
Source:PTA
211
provide easy
e
and che
eap alternatee of such serrvices. Figuree depicts thee declining trend of fixed
d line
servicesin
nPakistan.In
nthecurrentyear,Pakistanlostover10
06,825subscribersreachin
ngat3.4millionat
theendofDec2009asscomparedto4.5millionsubscribersaattheendofJJune2009.
WirelessLocallLoop
14.5iiiW
WLLSubsribersandGrowth
3,00
00,000
2,50
00,000
2,00
00,000
1,50
00,000
1,00
00,000
50
00,000
9Dec
200809
200708
200607
200506
WirelessllocalloopisaanimportanttpartofPakistan's
telecom sector as it provides a feasible lastt mile
solutionfforruraltelep
phonyduetorelativelylow
wcost
of deployyment and maintenance.
m
Pakistan op
pened
the WLL market in 20
003 by award
ding 93 licensses to
16 operaators for 14 telecom reegions across the
country. The emerge
ence of new operatorss has
proved ass an important factor devvelopment off WLL
sector, ass they are pushing the existing
e
giantts like
PTCL, Worldcall and Telecard to
t improve their
coverageandservicesstandards.
ngrowingat arapidpacesince
WLLindustryhasbeen
Source:PTA
4. During firrst six montths of
its incepttion in 2004
FY200910
0, WLL subsccriber tally reached
r
2.69 million from
m 2.6 million
n (200809). A total of 78,864
subscribers have been
n added by WLL
W operators showing a growth of 3%
%. Although the
t growth rate
r
is
less when
n compared to
t 17% in 20
00809, the performance
p
of WLL has been convincing if factorrs like
recession,cellulargrow
wthandsecu
uritysituation
nareconsideered.WLLteledensityhasalsobeenstteady
1.65%from1
1.60%infirstttwoquartersofFY
lastyear,similarly,totalWLLpenettrationlevelincreasedto1
200910. AlthoughWLLLisidealforrcoveragein farflungareeas,slowroll outofservicesbyoperatorsin
ruralareaasisdiminishingthepoten
ntialofwirelesssmedia.
14.5ivBroadband
Broadban
ndhasoftenb
beencompareedwiththeccellularindusttryofPakistanduetotheexemplarygrrowth
ofthelattterinthelasttfewyears.Ittisafactthattbroadbandpenetrationlevelsarelow
wbuttheexteentof
thisinfanttindustryssu
uccessshould
dbegaugedb
byitsgrowthratesnotitspenetrationllevel.Theinh
herent
constraintts of broadbaand also effeect its propaggation such as literacy ratte, computer skills, high tariffs,
reservatio
ons among parents regaarding cyber security an
nd child safeety, languagee barrier, seervice
availabilitty,highcosto
ofcomputereequipmentettc.Aclosesccrutinyofalltthesefactors wouldreveaalthat
broadban
nd is actually propagatingg at a rapid pace
p
even exxceeding estiimations by various renowned
broadban
nd experts. Fo
or example, Business
B
Mon
nitor Internattional (BMI) in its last quarterly reporrt (Q3
2009) had
d forecasted that there will
w be a 12% broadband penetration by end of 20
013 but revised its
estimatetto33%byendof2014intthemostreceentpublicatio
on.(Q12010).
Broadban
ndhaslongbeentermedaasTheNext BigThingforPakistanprrimarilybecau
usenotonly itisa
fastandrreliablebutalsoacheapssourceofinfo
ormationdissseminationandcommuniccation.Broad
dband
market has experiencced unmatcheed growth raates and steaadily rising penetration
p
leevel coupled
d with
injectiono
oflatesttech
hnologieslikeWiMaxandEEvDO.Pakistaanisrankedaamongsttopfivemostdyn
namic
economieesintermsoffincreasedintternetpenetrrationinSoutthAsianregio
on(Source:UN
NCTAD2009))
212
BroadbandSu
ubscribers
Subscribeers
800
0,000
60
52
700
0,000
64
43,892
600
0,000
88,373
68
50
50
00,792
500
0,000
413,809
400
0,000
300
0,000
Grow
wth
267
7,180
40
29
30
21
272,626
20
200
0,000
7
2
100
0,000
10
0
ec08
De
Maar09
Jun09
Seep09
Deec09
Jaan10
Source:PTA
dofJan2010
0,Broadbandsubscribershavereached
d688,373witthagrowthrateof7%witththe
Attheend
netadditiionof44,481
1.Comparedw
withDecemb
ber2008,areemarkablegro
owthrateof141%and376,712
net additiions depict the unmatcheed success off the sector. Broadband penetration
p
leevel has also been
steadilyim
mprovingand
dstandsat0.42%,upfrom
m0.16%from
mDecember2
2008.Pakistanhasbeenraanked
6th in term
ms of quarte
erly growth and
a 10th in teerms of annu
ual growth in the global broadband
b
m
market
(Source:P
PointTopic). However,ind
dustrystatistiicsascollecteedbyPTAplaacePakistan atthetopoffboth
thelistsw
whencompare
edwithotherrcountrysfigguresinthesaidreport.
PTCL and Wateen are
e the two maajor operatorrs of broadbaand in Pakistan while oth
her companiees like
Worldcall,Linkdotnett,LinkdirectaandWiTribearecatchingupfast.
urturing this new born fieeld by provid
ding a
PTA as a regulator off the sector is actively involved in nu
common platform forr broadband experts via establishmen
nt of Broadb
band Stakeho
olders Group
p and
facilitatingg the new entrants in evvery possiblee way. Being an active member
m
in USSF board, PTA
A has
mandated
dthebroadbaandprojectsfforruralareaas.BillionsofRupeesarebeinginvested
dinthebroad
dband
projects for
f rural areaas via USF since 2007. Th
he first results of the ten
nacious workk by PTA, USF and
industry has
h brought 1Mbps PTC
CL broadband
d connection for only Rs. 299/ to far furlong areeas of
Faisalabad
dandMultan
nlikeJhang,SSargodha,To
obaTekSingh,Khushab,Bhakkar,Bahaawalpur,D.G Khan,
Khanewall,RahimYarK
Khanetc.Suchalowpriceofbroadbandconnection
nisunmatcheedanywhereinthe
worldand
damajorach
hievementforbroadband stakeholderss.Tomaintain
nfairness,thesearesubsiidized
rates onlyy for rural areas where no
n broadband service waas previously available. This
T
step will also
encourageeashiftinpe
eoplesdepen
ndencyondialupinterneetintheseareeasandeven
ntuallyconverrtthis
huge poo
ol of internett users into broadband internet
i
userrs. Other pro
ojects of USF like laying optical
o
fiber in ru
ural areas an
nd establishm
ment of Educcational Broadband Centeers and Comm
munity Broad
dband
centersw
willbringmore
eawareness andelevatetthepoweroffBroadbandaamongmassees.Itishoped
dthat
withsuchinitiatives,broadbandwilllsoonbepreesentineveryynookandco
ornerofthecountry.
213
405,359
388 186
388,186
200809
9D
9Dec
40
00,000
387,490
50
00,000
353,194
PC
COsandGro
owth
279,320
30
00,000
20
00,000
10
00,000
200708
200607
200506
Card payp
phone service
e has been a
a part of Pakiistan's
telecom engine
e
for decades.
d
In its early dayss, the
market was
w dominated by PTCL an
nd Telecard, which
provided prepaid card
d services to the people across
a
Pakistan. With the ad
dvent of deregulation in 2003,
newCPP companiesem
mergedopen
ningthemarkketfor
atoughccompetition. Hardcompettitioncoupled
dwith
remarkab
blegrowthofcellularindusstrytranslateedinto
financial crippling of
f CPP compaanies, a situ
uation
whichalo
otofnewcom
merscouldnotcopewith
h.Asa
result, on
nly a few big companies are
a dominatin
ng the
CPPmarkketthesedayss.
200405
14.5vCaardPayphone
e
449,121
Source:P
PTA
1,000
1,439
143
14.5vi(a))ForeignDire
ectInvestment
815
1,500
464
14.5viTe
elecomEcono
omy
1,824
1,905
Growth of
o CPP has be
een topsyturrvy over the last few yearrs in Pakistan
n. Currently, there are 388,186
PCOsallo
overPakistan,ascompareedto405,359
9duringthe2
200809.Thisshowsaneggativetrendo
of4%,
intheCPPindustryoffPakistan.Th
hemainreaso
onfor
this down
nfall is availability of afffordable tarifffs by
Fo
oreignDirecttInvestmen
nt
cellular companies, lo
ow cost of mobile
m
phonees and
2,500
cellularco
overageacrosssPakistan.
2,000
9Dec
200809
200708
200607
200506
200405
500
Pakistan'ss Economy experienced
d slow economic
growth en
nding at 2% rather than the
t target off 5.5%
mainly du
ue to the advverse effects of global financial
crisis, how
wever, telecom sector continued
c
to grow
positivelyy in terms of
o subscriptiion, revenuee and
Source:PTA
teledensitty.AsPakistanprovideslucrativeinvesttment
environment for foreign investors in the teleco
om, it managged to attracct US$ 815 million
m
in 200
0809.
During th
he last 6 mon
nths (JulDec 09) telecom
m sector received over USS$143 million
n FDI inflow which
w
becomes18%oftotalFDIduringthisperiod.
14.5vi(b))TelecomSe
ectorInvestm
ment
Owingto economicslo
owdown,satu
urationintheemarketand
dglobalfinan
ncialcrisis,theetotalinvesttment
bynearly47%
%.Despiteth
hefactthattheoperatorsshave
intheteleecomsector during200809reducedb
speedilyrrolledoutthe
eirinfrastructture,reachinggouttomosttofthepopu
ulation,there stillremainshuge
areas likee Broadband
d, WLL and manufacturin
ng etc, where investmen
nt opportuniities exist. During
D
200809,atotalofUS$
$1.6billionw
worthofinvesstmenthasbeeenmadebyalltheoperators.
214
In
nvestmentin
nTelecom
LL
WLL
Cellular
LDI
450
00
400
00
350
00
602.74
300
00
342.1
250
00
200
00
2584.5
100
00
50
00
52.31
1
2337.7
150
00
1229.7
75
40.57
746.95
52.8
403.9
82.41
1
276.75
200607
200708
20080
09
Source:PTA
14.5vi(c)TaxesonTe
elecomSector
Telecom sector contributes 12% in
i the total GDP,
G
making its share in total tax revvenue as 67%
% per
annum.D
Duringtheyeaar200809,th
hesectorcon
ntinuedtocontributehand
dsomeamountinnationalkitty
throughvvarioustaxes andregulato
orycharges.TTelecomsecto
ors'contributtiontonation
nalexchequerrrose
toRs.112
2billionin200809compaaredtoRs.11
11billionthepreviousyearr.Thegovern
nmenthasred
duced
theGST/FFEDratefrom
m21%to19.5
5%,besidesp
providingrelieeftocellular mobileoperatorsinActivvation
Tax by 50
0% i.e. from Rs. 500 to Rs.
R 250 per new
n
connection. This will certainly enaable the secttor to
contributeemoretoGSTcollectioninthenextyear.
TelecomContrributioninExchequer
PTADepo
osits
Otherrs
Activatio
onTax
GSTT
120
0.00
100
0.00
80
0.00
60
0.00
40
0.00
20
0.00
0
0.00
10.86
9.15
36.96
39.00
19.20
14.50
44.61
49.35
9.72
1
17.38
36.95
2
21.55
17.60
7.71
17
0.6
69
21.5
59
4.0
02
12.1
10
1.38
21
20
0.50
2
26.80
200304
200
0405
20
00506
1
11.40
7.53
36.28
2
200607
200708
200809
Source:PTA
215
14.5vi(d))TelecomRe
evenues
Telecomssectorrevenu
ueshoweda19.8%growtthduring200
0809compaaredto18.2%
%inprevious year.
During th
he year 2008
809, the tellecom sectorr generated revenue to the tune off Rs. 333.9 billion
b
compared
d to the last year's Rs. 27
78.5 billion. The
T cellular mobile
m
sector continued to
o be the lead
der in
telecomrrevenue,who
osesharecam
meouttobe 64%inthettotaltelecom
mrevenues.TThecellularm
mobile
sectorsho
owedabout1
17%positiveggrowthduringthefiscalyeear200809.
TelecomRevenues
400,000
333,882
350,000
278,261
300,000
250,000
200,000
235,6
613
194,562
150,000
100,000
50,000
200506
200607
200708
00809
20
Source:PTA
14.5vi(e))RegulatoryMeasuresfo
orpromotingtelecomSecttorinPakistaan
x Paakistan Teleccommunicatio
on Authority (PTA) launch
hed a new seervice named SIM Inform
mation
Syystem668toenabletheemobilesubsscriberstokn
nowthetotalnumberofSSIMsissuedaggainst
th
heirrespectivveCNICnumb
berwitheachmobileoperator.
on Authorityy (PTA) has introduced an
a online faccility for oveerseas
Paakistanis in order
o
to get their SIMs data regularized or to block the extra SIMs/connecctions
isssuedagainsttheirComputerizedNatio
onalIdentityC
Card(CNIC).
on Authority (PTA) has removed the condition off CNIC copy being
providedbyth
heconsumerssinordertoffacilitateboth
hCSCs/franch
hiseesandcon
nsumerstohandle
an
ndprocessm
maximumnum
mberofcomplaintsinshorttspanoftimee.
ons Authority (PTA) has formulated two sets of Key Perform
mance
In
ndicators(KPIIs)toimprovveandmonito
ortheQualityyofService(Q
QoS)ofFixedBroadband
dand
G
GPRS/EDGE networks. Th
he objective of introducin
ng these KPIss is to create transparency and
seetmonitorab
blestandardsinfixedbroaadbandandG
GPRS/EDGEseervices.
14.6ElecctronicMediaa
a)PakistaanElectroniccMediaRegulatoryAutho
ority(PEMRA))
PakistanEElectronicMe
ediaRegulato
oryAuthorityy(PEMRA)hasenteredintto8thyearoffitsexistencee.The
effortsrenderedbyth
heAuthorityd
duringthepaastfewyears foritsdevelo
opmentand diversifiedch
hoices
to the peeople for access to curren
nt affairs, education, info
ormation and entertainmeent. The Auth
hority
216
believethatfreedomofspeechandexpressionneedstobeexercisedinsuchafashionthatsentiments
ofanysegmentofthesocietyarenothurt.Fabricofsocialandreligiousharmonyinthesocietyhastobe
keptintact.
ContributionTowardsDevelopmentofBroadcastandDistributionMediaDuringTheFY200910
x PEMRA has issued 05 new licenses for establishing satellite TV channels. It is pertinent to
mentionthat2ofthesewereconferredtoM/sEyeTelevisionNetwork(PCT).Ltd.Thisincludes
Style360 and OYE. Altogether 83 licenses for establishing satellite TV channels have been
conferredsofarandfromwhich64areoperational.
x During current financial year, 08 licenses for establishing FM radios network were awarded
makingthetotalnumberoflicensesissuedunderthecategorytilldateto135.
x Additional 149 cable TV networks were licensed all across Pakistan during the last one year,
makingthetotalnumberoflicensesissuedtilldateto2373.
x ThisyeartheAuthorityhasestablishednewofficesacrossthecountryfortheclosemonitoring
ofthequalitydistributionservicesbystakeholderstotheviewers.
x During the current fiscal year, Authority has created considerable employment opportunities
againstthevacantpostsforskilledworkersinPakistanandappointednear146staffmembers.
x The Authority has also rationalized tariff for satellite TV channels so to encourage potential
investorsandenhancevoiceofPakistaninaneffectivemanner.
x CombatingculturalinvasionbyvariousforeignsatelliteTVchannels,theAuthorityhasremained
steadfastinperformingitssocialandmoralobligationsandsucceededinformulatingadraftfor
CodeofconductforthelocalsatelliteTVchannelsandrestrictingforeigncontentintheregular
broadcastingwiththecooperationofprivateTVchannels,owners.
FuturePlans
Technologicaladvancementswillalsohaveanimpactontheindustry.TheAuthorityhasalreadydecided
thatinpursuanceofMillenniumDevelopmentGoals(MDGs),furtherlicencingforanaloguedistribution
systemshallbediscouragedwhilethesystemsequippedpreferablywiththedigitaltechnologyshallbe
grantedlicences.Inruralareas,Authorityhasplannedthattheanaloguesystemwillbephasedouttobe
replacedwiththedigitalsystemsgraduallystartingfromtehsilheadquarterstosmallvillagesbyendof
year2015.
AfewofthemergingtechnologiesunderregulatoryappraisalbytheAuthorityareasfollows:
DigitalCableTVNetworks
IPTVNetworks
DirecttoHome(DTH)
SatelliteRadio
DigitalterrestrialTelevision
MobileTelevisionetc.
b)PakistanTelevisionCorporationLimited(PTV)
PakistanTelevisionisgraduallyextendingitssignaltoremoteandeconomicallybackwardareasofthe
country in order to uplift the socioeconomic conditions in these areas to eliminate the existing
217
disparity.
FuturePlans
x RebroadcastcentersatJura,Athmaqam,Karan,Dhudhnial,Sharda&KelinAJ&K.
x RebroadcastCentersatBadinandNewsBureauatLarkanainSindh.
x Permanent TV Centre at Multan and Rebroadcast Station at Mian Channu, Jhang, Patriata,
Sadiqabad,LadhawalaWaraichGujranwalainPunjab.
x Rebroadcast Centers at Buneer, Besham, Khund Bangla, Puran, Kohat, Salam Baba, Shamali
(Batagram)ShaikhBadin(D.I.Khan)and8RebroadcastcentersatupperDirinNWFP.
x RebroadcastCentersatQilla,Kharan,Sohrab&BarKhaninBaluchistan.
x Rebroadcast centers at Aliabad/Karimabad, Chilas, Gahkuch, Khaplu, Jaglot/Banju, Astore and
ShigarinNorthernAreas.
x PTVNationalhasalsobeenintroducedRegionalLanguageprogrammes.AnindependentSports
channelthroughterrestrialnetworkhasalsobeenplanned.
x PTVAbaseen(NWFP)&PTVBolan(Baluchistan)channelshavebeenplanned.
x Project of Terrestrial Digitalization DVBT & H of all Centers, as per ITU requirement has also
beenforwarded.
x High Definition (H.D) TV has been planned. Procurement of Vehicle Mounted DSDNG &
DigitalizationofallTVRebroadcaststationshasbeenplanned.
c)PakistanBroadcastingCorporation(PBC)
PakistanBroadcastingCorporationhas65broadcastingunits.Thelargestradionetworkinthecountry
withalistenershipthatisbiggerthanallprivateradiochannelsputtogether.
Programme&newwingsachievementsduringcurrentfinancialyear
x Reorientation of programme in line with peoples aspirations, democratic norms and
participatoryspirit.
x Radio Pakistan has become the voice of the peoples government against terrorism and
extremism by supporting the armed forces and security agencies carrying out difficult
operations in the country. The PBC has launched special interactive programmes containing
music, talks shows and interviews by prominent personalities and public participatory
programmes.
x Wehavehelpedinstall,establishandsustainRadioSwatandotherFATAradiostations.ThePBC
and ISPR have set new examples in collaboration for national cohesion and elimination of
terrorismandextremism.
x LiveBroadcastfromIDPcampsinNWFPareairedfromprovincialnetworkandportionsofwhich
arealsoairedonNBS.
x A new pubic outreach campaign was launched by arranging cultural and intellectual discourse
programmesalloverthecountry.Besidesspecialonairprogramme,majorfundraisingcultural
showswereheldalloverthecountrytosowsolidaritywiththeIDPsandpromotingawareness
218
againstterrorism.AnamountofmorethanRs.6millionhasbeencollectedfordepositinPMs
fund.
x AllPBCStationshavebeenlinkedwiththetoolsofSMSandLIVEphonecallstoensurepublic
participationresultinginthecreationofnewaudienceaswellastheretentionoftheold.
x To restore the credibility now the news value is driving the structure and timing of the news
bulletins.Breakingnewsisairedasandwhentheyoccur.
FuturePlans
x AnewplanabouttherevivalofPakistanBroadcastingAcademyisunderway,as20092010has
beendeclaredbyPBCastheAcademyyear.
x AnewdigitizationplanhasbeenconceivedtocreateadigitalplatformwiththehelpofIBMat
anestimatedcostof$2million(Rs.166million).
x ThePBCwillhaveasurveyconductedbyanindependentorganizationtoevaluatetheeffectto
thenewinitiativeslaunchedinDecember,2009.
x Pakistanneedsnationalconsensusonmajorissues(terrorism,sectarianism,extremism,Pakistan
identity, linguistic and cultural diversity). PBC is planning a national network programmed
involving celebrities and leading public opinion and newsmakers of Pakistan as a part of the
effortstoachievethisgoalinAugust2009.
14.7PakistanPostOffice
Pakistanpostofficeiscoveringthewholecountrywithanetworkof12340(Urban1846,Rural10495)
postoffices.PakistanPosthastakenvariousmeasurestostreamlinethePostOfficeSystemonmodern
lines.Duringcurrentfinancialyear200910(JulyDec.),followingongoingITrelatedprojectshavebeen
strengthenedandcontinuedprovidingefficientservicestotheclients.
a. BenazirIncomeSupportProgram(BISP)
Complete webenabled tracking and monitoring system for disbursement of funds for Benazir
IncomeSupportProgramcontinuedprocessing,monitoringandreconciliationofthespecialized
moneyorderscheme.
b. CallCenter
A call center has been established for receiving the complaints from the customers as well as
BISPbeneficiariesforquickredressal.Thecenteralsofacilitatesdisbursementofinwardforeign
remittances. Online complaint lodging facility on the webportal of Pakistan Post
www.pakpost.gov.pkhasbeenprovidedforthepublic.
c. CounterAutomation
Over one hundred GPOs including renovated post offices throughout Pakistan have been
providedwithcountercomputerizationfacilityforbetterservicequalitytothecustomers.This
numberisbeingincreasedinaphasedmanner.
d. ExpressMailTrack&TraceSystem(EMTTS)
Provisionoftrackinginformationtothearticlesunderreceipthasbecomeadefactostandardin
the courier industry. The web based Express Mail Track and Trace System of Pakistan Post
providesvaluableinformationrelatingtothedispatchanddeliveryofExpressMailarticlesfrom
219
endtoend. The system has been enhanced and now covers 14 main stations throughout
Pakistan. In additional 46 District Mail Offices throughout Pakistan Post have been covered
throughthesystem.
e. ComputerizedPensionPaymentSystem
Over 1.3 million Pensioners are served by Pakistan Post. Through computerization of Military
Pension payments, at all GPOs have efficiently been disbursing the pensions in a hassle free
environment.
14.72InternationalPostalServices.
PakistanPosthasmailinkswithallcountriesoftheworldexceptIsrael.Themailexchangewiththese
countriestakesplaceunderUniversalPostalUnionsRules&Regulations.Directmaillinksexistwith165
Postal Administrations. For the Remaining countries, the mail is exchanged by utilizing the transit
facilitiesofintermediaryPostalAdministrations.ThenetearningofthePakistanPostDepartmentfrom
internationalpostalservicesstoodatRs.50,854,719thecurrentfinancialyear.
14.73RemittanceServices.
Duringthefirstsixmonthsofcurrentfinancialyear,theremittancesinforeignexchangewerereceived
intheshapeofmoneyorderswereRs.2,446,904.8.
220
TABLE 14.1
TRANSPORT
Fiscal
Year
8,775
8,775
8,775
8,775
8,775
8,775
8,775
8,775
7,791
7,791
7,791
7,791
7,791
7,791
7,791
7,791
7,791
7,791
7,791
Number of
Passengers
carried
*(Million)
84.90
73.30
59.00
61.72
67.70
73.65
68.80
64.90
64.90
68.00
68.80
69.00
72.40
75.70
78.18
81.43
83.89
79.99
82.54
Freight
carried
(Million
Tonnes)
7.72
7.56
7.77
8.04
8.11
6.85
6.36
5.98
5.45
4.77
5.89
5.90
6.18
6.14
6.41
6.03
6.42
7.23
6.94
Railways
Freight
Tonne
(Kilometres
Million)
5,709
5,962
6,180
5,938
6,711
5,077
4,607
4,447
4,330
3,612
4,520
4,573
4,820
4,796
5,014
4,971
5,453
6,178
5,896
7,791
58.97
4.63
3,925
Route
(Kilometres)
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
(Jul-Mar)
2009-10 P
P : Provisional
Length of Roads
Locomotives
(Nos.)
Freight
Wagons
(Nos.)
753
752
703
676
678
622
633
611
596
597
610
577
577
592
557
544
544
555
551
34,851
30,369
29,451
29,228
30,117
26,755
25,213
24,275
24,456
23,906
23,893
23,460
23,722
21,812
21,556
20,809
19,638
18,638
17,259
Total
170,823
182,709
189,321
196,817
207,645
218,345
229,595
240,885
247,484
248,340
249,972
251,661
252,168
256,070
258,214
259,021
261,821
258,350
260,200
520
16,450
259,618
Kilometers
High
Type
86,839
95,374
99,083
104,001
111,307
118,428
126,117
133,462
137,352
138,200
144,652
148,877
153,225
158,543
162,841
167,530
172,891
174,320
177,060
179,290
Low
Type
83,984
87,335
90,238
92,816
96,338
99,917
103,478
107,423
110,132
110,140
105,320
102,784
98,943
97,527
95,373
91,491
88,930
84,030
83,140
80,328
(Contd.)
TABLE 14.1
TRANSPORT
Fiscal
Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
(Jul-Dec)
2009-10
Total
18,709
20,453
22,170
22,569
23,098
23,581
23,475
22,684
24,053
23,761
25,981
26,692
25,852
27,813
28,615
32,270
30,846
37,192
38,732
Cargo Handled at
Karachi Port (000 tonnes)
Imports
14,714
15,267
17,256
17,610
17,526
18,719
18,362
17,114
18,318
18,149
20,063
20,330
19,609
21,732
22,100
25,573
23,329
25,517
25,367
Exports
3,995
5,186
4,914
4,959
5,572
4,862
5,113
5,570
5,735
5,612
5,918
6,362
6,273
6,081
6,515
6,697
7,517
11,675
13,364
20,545
14,009
6,536
Shipping
No. of
Dead
Vessels
Weight
Tonnes
28
494,956
28
494,956
29
518,953
27
595,836
15
264,410
17
290,353
15
261,817
15
261,836
15
261,836
15
261,836
14
243,802
14
243,749
13
229,579
14
469,931
14
570,466
15
636,182
15
636,182
14
536,821
14
50,750
Gross Earnings (Million Rs.)

Pakistan
Pakistan
Railways
National
Shipping
Corp.
6,696
3,865.0
8,236
4,063.0
9,031
3,137.0
9,134
3,302.0
9,224
4,311.0
8,365
6,962.0
9,394
7,761.5
9,805
4,597.0
9,310
3,707.0
9,572
3,483.0
11,938
5,458.7
13,346
4,555.5
14,810
5,405.0
14,635
6,881.9
18,027
7,860.0
18,184
7,924.6
19,195
9,089.1
19,973
10,753.5
23,160
11,474.0
11
649,703
16,875
3,566.0
Source: (i) : Ministry of Railways
(ii) : National Transport Research Center
(iii) : Karachi Port Trust
(iv) : Pakistan National Shipping Corporation
TABLE 14.2
PAKISTAN INTERNATIONAL AIRLINES CORPORATION
Revenue
Kilometres
Flown
(000)
1992-93
270,536
69,377
1993-94
303,321
69,024
1994-95
353,221
72,544
1995-96
310,205
74,288
1996-97
336,230
78,796
1997-98
325,744
73,663
1998-99
335,348
70,697
1999*
332,417
75,483
2000*
317,213
76,212
2001*
324,815
40,158
2001-02
291,428
62,974
2002-03
311,152
63,863
2003-04
294,082
58,146
2004-05
354,664
80,699
2005-06
343,525
87,273
2006-07
446,570
80,302
2007-08
383,574
80,759
2008-09
311,131
79,580
2009*
380,917
80,108
* : PIA's Financial Year is based on Calendar Year
Fiscal
Year
Route
Kilometres
Revenue
Hours
Flown
Revenue
Passengers
Carried
(000)
5,780
5,645
5,517
5,399
5,883
5,531
5,086
4,914
5,297
2,729
4,290
4,391
4,796
5,132
5,828
5,732
5,415
5,617
5,535
132,775
131,122
134,683
138,014
143,686
136,104
129,379
135,136
134,066
65,615
110,136
108,942
96,765
131,262
141,666
141,479
132,416
132,378
132,155
Revenue
Passengers
Kilometres
(mln)
10,102
10,108
10,382
10,592
11,661
11,147
10,722
10,653
12,056
6,305
10,843
11,276
12,769
13,634
15,260
15,124
13,680
13,925
13,891
Available
Seat
Kilometres
(mln)
15,733
15,159
15,848
16,573
17,528
16,952
16,752
17,839
18,692
9,885
15,778
16,264
18,299
20,348
21,991
22,092
20,313.3
19,528.2
19,859.0
Passenger
Load
Factor
%
64.2
66.7
65.5
63.9
66.5
65.8
64.0
59.7
64.5
63.8
68.7
69.3
69.8
67.0
69.4
68.5
67.4
71.3
70.0
(Contd.)
TABLE 14.2
PAKISTAN INTERNATIONAL AIRLINES CORPORATION
Fiscal
Year
Revenue
Available
Tonne
Tonne
Kilometres
Kilometres
(Mln)
(Mln)
1992-93
1,333
2,352
1993-94
1,365
2,347
1994-95
1,408
2,452
1995-96
1,402
2,526
1996-97
1,495
2,649
1997-98
1,425
2,435
1998-99
1,313
2,403
1999 *
1,307
2,560
2000 *
1,452
2,631
2001 *
769
1,438
2001-02
1,325
2,270
2002-03
1,389
2,401
2003-04
1,456
2,528
2004-05
1,657
3,033
2005-06
1,818
3,302
2006-07
1,801
3,369
2007-08
1,593
3,125
2008-09
1,580
2,934
2009*
1,525
2,933
.. : Not available
* : PIA's Financial Year is based on Calendar Year
Revenue
Load
Factor
(%)
56.7
58.2
57.4
55.5
56.4
58.5
54.6
51.0
55.2
53.5
58.4
57.8
55.0
54.6
55.1
53.5
51.0
53.9
52.0
Operating
Operating
PIA Fleet
Revenue
Expenses
No. of
(Million
(Million
Planes
Rupees)
Rupees)
21,970
21,347
45
23,631
22,713
47
25,417
24,199
47
27,505
27,150
47
32,732
32,809
47
..
..
47
..
..
45
35,492
36,395
51
39,228
42,033
46
21,966
23,296
45
42,844
39,377
44
45,442
39,125
43
51,041
47,197
42
61,308
62,360
42
67,574
73,074
42
70,587
79,164
39
70,480
76,415
44
89,201
120,579
42
94,564
98,629
40
Source: Pakistan International Airlines Corporation
TABLE 14.3
NUMBER OF MOTOR VEHICLES REGISTERED
Calendar
Year
Motor Cars
Jeeps & Station
Wagons
682,636
731,960
819,350
868,159
902,654
923,577
966,747
1,068,116
1,085,969
1,162,876
1,182,307
1,201,738
1,282,371
1,292,888
1,301,406
1,321,590
1,375,419
1,444,190
1,553,499
1,608,154
Motor
Cabs/
Taxis
32,304
33,235
41,245
47,897
52,444
53,400
54,501
83,182
83,687
83,844
83,892
93,940
83,954
84,277
84,311
85,619
89,105
93,560
95,204
96,026
Buses
Trucks
84,016
89,094
94,988
98,681
107,440
113,516
114,415
119,365
125,929
150,108
154,401
158,694
162,672
162,957
163,242
165,775
172,530
181,157
184,104
185,578
105,245
107,171
111,391
114,394
118,389
119,174
123,658
131,322
132,895
145,111
148,569
157,027
170,615
178,883
181,150
183,962
191,454
201,027
204,179
205,755
Motor
Cycle
(2 Wheels)
1,250,749
1,381,136
1,497,017
1,573,370
1,679,259
1,754,737
1,842,531
1,995,421
2,068,730
2,175,488
2,260,772
2,346,056
2,407,466
2,444,567
2,681,066
2,722,645
2,833,540
2,975,217
3,123,252
3,197,270
1,688,562
100,827
194,857
216,043
3,357,134
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
(Jul-Mar)
2010 E
E : Estimated
Motor
Cycle
(3 Wheels)
50,862
52,439
56,267
59,510
62,183
63,370
69,756
76,224
81,777
95,345
99,376
103,407
115,919
122,448
124,076
126,004
131,134
137,691
150,049
156,228
Others
Total
507,025
528,878
558,926
589,281
615,497
642,174
666,549
700,315
724,309
746,718
772,279
797,840
825,552
846,017
860,480
873,825
909,416
954,887
975,980
986,527
2,712,837
2,923,913
3,179,184
3,351,292
3,537,866
3,669,948
3,838,157
4,173,945
4,303,296
4,559,490
4,701,596
4,843,702
5,048,549
5,132,037
5,395,731
5,479,417
5,702,598
5,987,729
6,286,267
6,435,538
164,039
1,035,853
6,757,315
TABLE 14.4
MOTOR VEHICLES ON ROAD (000 Number)
Year
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
(Jul-Mar)
2009-10 *
* : Estimated
Mcy/
Scooter
971.80
1,165.50
1,287.30
1,482.00
1,481.90
1,576.00
1,691.40
1,833.70
2,010.00
2,218.90
2,481.10
2,656.20
2,882.50
3,063.00
3,791.00
4,463.80
5,037.01
5,368.00
Motor
Car
429.10
465.80
493.70
516.80
538.40
564.50
593.00
731.30
815.70
928.00
1,040.00
1,110.00
1,193.10
1,264.70
1,999.20
1,682.20
1,853.46
2,029.10
5,469.63
2,076.16
Jeep
Tractor
Buses
31.60
35.60
38.00
41.30
43.50
45.50
47.80
16.70
17.00
18.30
43.40
44.40
47.80
51.80
65.70
85.40
82.87
79.00
Station
Wagon
43.60
48.80
52.70
56.00
59.00
62.00
65.00
60.60
73.90
93.80
122.70
126.40
132.40
140.50
140.80
169.10
163.22
155.60
45.00
51.70
56.40
60.90
64.50
68.20
72.50
84.40
92.80
86.60
96.60
98.30
100.40
102.40
103.60
108.40
109.88
111.10
M. Cab/
Taxi
33.50
40.00
44.50
47.90
51.40
54.10
57.30
68.50
69.80
79.80
96.40
104.10
112.60
120.30
122.10
119.10
129.80
138.60
Motor
Rck
42.40
46.70
50.50
53.40
58.70
65.60
74.60
56.70
59.90
72.40
80.80
80.90
81.00
81.30
77.80
79.00
89.34
88.40
275.30
353.00
376.60
399.80
424.80
439.80
463.60
489.80
528.40
579.40
630.50
663.20
722.70
778.10
822.30
877.80
900.52
911.70
89.68
176.73
1,009.85
120.24
144.41
97.29
(Contd.)
Oil
4.00
4.30
4.70
5.10
5.60
6.10
6.80
6.80
7.00
7.20
7.60
7.60
7.60
7.70
7.70
7.80
8.80
9.70
Others
Total
49.50
52.70
73.60
60.70
63.70
66.50
69.70
74.70
78.80
89.00
71.50
71.40
71.30
69.40
60.20
38.50
40.80
41.30
2,095.50
2,460.00
2,690.40
2,951.60
3,000.20
3,195.80
3,405.30
3,651.70
3,997.20
4,471.00
5,016.80
5,315.00
5,711.20
6,048.30
7,084.50
8,063.60
8,878.50
9,413.70
3.19
TABLE 14.4
MOTOR VEHICLES ON ROAD (000 Number)
Year
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
(Jul-Mar)
2009-10 *
* : Estimated
D.Van
Trucks
Pickup
61.40
69.80
74.00
78.20
81.30
84.30
87.60
51.70
55.50
72.40
116.90
120.30
121.30
121.90
143.30
148.90
163.50
167.20
75.80
84.20
92.00
98.30
104.20
110.30
117.10
121.00
127.40
132.30
145.20
146.70
149.20
151.80
151.80
173.30
177.80
181.90
30.20
39.50
44.10
47.10
50.50
50.20
56.10
56.40
61.60
68.40
78.30
80.60
84.40
87.60
93.50
104.50
115.30
125.50
Ambulance
1.70
2.00
2.30
2.70
3.30
3.70
4.30
1.50
1.70
1.70
4.10
4.30
4.40
4.50
4.50
4.60
5.20
5.60
180.13
195.85
129.13
4.42
Tankers
Water
0.60
0.70
0.70
0.80
0.90
1.10
1.30
0.70
0.70
0.80
0.90
0.90
0.90
0.90
0.90
0.90
1.00
1.10
1.07
70.48
9,768.26
Source: National Transport Research Center
TABLE 14.5
PRODUCTION AND IMPORT OF MOTOR VEHICLES
Fiscal Year/
Type of Vehicles
PRODUCTION (Nos.)
Trucks
Buses
L.C.Vs
4x4 Vehicles
Tractors
Motor Cycle/Scooters/
Rickshaw
Cars
IMPORTS (Nos.)
Cars
Jeeps
Motor Rickshaw
Station Wagon
Buses Including Trolly
Buses
Lorries/Trucks Including Ambulance
special Lorries, Trucks
& Vans
Motor Cycle
Scooter
Motorised Cycles
Passengers M. Cars (n.S)
Road Tractors for
Trailers
Tractor Agricultural
Tractor Caterpiller
Tractor Heavy Duty
for const.
Tractor Roads
Tractor (NES)
Car's Chassis with
Engine
Bus etc. Chassis
Spl. Truck etc. Chassis
Rickshaw, Chassis with
Engine
Pickup
Delivery Van
Chassis Un-Mounted
Motor Vehicles No
Bicycle
Motor Vehicles for
Goods
Passenger Vehicles
Public No
Tractor Chassis with Engine
.. : not available
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2,222
1,177
11,478
1,324
17,127
1,394
427
5,128
816
14,907
703
312
5,154
1,310
17,144
3,030
438
6,834
2,274
16,208
2,916
862
9,817
792
10,417
1,850
425
4,886
651
14,144
1,131
1,220
8,079
622
26,885
977
1,508
6,656
380
35,038
952
1,337
6,965
459
32,533
95,793
26,945
63,958
19,514
60,960
20,955
121,809
31,079
117,188
33,462
96,991
33,683
93,167
38,682
94,881
32,461
117,858
39,573
100,188
1,484
2,773
746
38,216
343
548
251
31,743
1,535
250
326
35,100
959
..
265
31,817
542
..
173
36,851
1
900
143
46,363
165
97
34,988
48
8
71
62,187
338
20
115
2,247
893
267
344
396
498
603
917
588
4,743
2,673
882
1,948
2,101
1,034
443
500
545
535
119,970
308
426
212
461
86,349
3
26
88
219
62,100
40
234
224
102
115,235
..
1,305
919
198
135,220
..
990
338
99
90,435
7
925
318
152
79,738
8
44
162
109
85,592
145
3
161
138
15,771
10
..
..
27
952
3
4
10,084
2
193
6,805
1
340
2,020
6
38
1,086
..
37
3,281
1
7
2,469
..
36
55
115
..
78
14
..
115
2
..
80
..
..
323
14
8
179
28
..
113
..
..
436
5
3
1
13
25,964
15
11
102
..
1
24
26
..
48
..
..
..
28
12
..
2
..
..
..
..
..
10
277
..
4
57
4
..
17,931
22,343
..
6,099
2,823
..
5,751
1,940
..
5,506
1,831
..
5,511
4,851
..
6,314
5,218
..
3,734
3,149
..
3,672
3,379
17
2,703
1,573
457
468
..
928
127
9,916
1
8,303
194
3,618
9
7,844
..
29,218
..
22,211
62
14,505
134
57
43
151
22
18
146
160
..
17
..
15
..
8
480
27
..
22
..
4
..
61
..
183
..
62
..
(Contd.)
99
TABLE 14.5
PRODUCTION AND IMPORT OF MOTOR VEHICLES
July - March
Fiscal Year/
2001-02 2002-03 2003-04 2004-05 2005-06
2006-07
2007-08 2008-09
Type of Vehicles
2008-09 2009-10 P
PRODUCTION (Nos.)
Trucks
1,141
1,950
2,022
3,204
4,518
4,410
4,993
3,135
1,559
1,493
Buses
1,099
1,340
1,380
1,762
627
993
1,146
657
294
320
L.C.Vs
8,491
12,174
14,089
23,613
29,581
19,672
21,354
16,158
11,341
7,455
Tractors
24,331
76,501
36,103
43,746
49,439
54,610
53,607
60,107
26,793
34,110
Motor Cycle
133,334
176,591
327,446
571,145
751,667
839,224
1,057,751
913,611
424,348
655,645
Cars
41,171
63,267
100,070
128,381
163,114
179,314
166,300
85,240
46,331
54,493
IMPORTS (Nos.)
Cars
40,079
60,554
88,130
66,338
36,563
202,785 *
540,025
425,721
308,354 1,442,755
Jeeps
666
6,010
11,435
5,409
2,108
1,938 *
210
14
13
23
Motor Rickshaw
101
3
3
15
1,727
60,519
125
125
907
Station Wagon
165
440
154
37
284
2,817 *
345
28
28
108
Buses Including Trolly
Buses
700
1,230
2,429
411
2,104
652
217
232
210
183
Lorries/Trucks Including Ambulance
728
14,036
2,883
2,616
13,463
16,610
4,331
2,405
1,529
1,327
special Lorries, Trucks
& Vans
157
54
95
1,544
551
573
875
1,203
963
3,610
Motor Cycle
111,711
143,952
127,861
189,721
167,626
164,078 *
209,098
200,745
134,310
163,938
Scooter
..
..
..
..
..
..
..
..
..
..
Motorised Cycles
509
675
4,143
9,472
12,467
18,512
20,726
13,332
19,554
161
194
243
244
1,587
1,174
690
557
495
154
Passengers M. Cars (n.S)
Road Tractors for
Trailers
18
122
124
117
498
997
2,409
2,149
1,146
1,404
Tractor Agricultural
220
14,000
11,420
6,543
20,769
30,588
8,914
2,636
1,373
11,890
Tractor Caterpiller
44
1
30
91
12
1
1
..
..
..
Tractor Heavy Duty
for const.
4
120
219
563
632
845
744
402
331
273
Tractor Roads
15,174
1,115
2,104
1,646
2,284
904
1,892
434
370
164
Tractor (NES)
115
496
736
2,167
3,378 *
7,213
16,364
10,927
11,573
112,587
Car's Chassis with
Engine
1
..
..
..
..
6
20
20
..
Bus etc. Chassis
60
46
164
18
7
24
314
1,017
550
1,952
Spl. Truck etc. Chassis
..
..
..
..
38
48
335
9
9
23
Rickshaw, Chassis with
..
Engine
36
10
2
144
315 *
421 *
187
6
6
6
Pickup
3,600
5,162
6,857
5,394
23,303
21,898
1,869
1,871
1,564
821
Delivery Van
2,120
471
26
178
2,586
1,583
311
37
37
5
Chassis Un-Mounted
168
..
..
..
..
..
..
..
..
..
Motor Vehicles No
Bicycle
20,240
37,836
39,894
61,187
52,022
28,509
38,249
42,966
20,472
90,325
Motor Vehicles for
Goods
2
234
511
269
3,844
297
22
2
..
631
Passenger Vehicles
Public No
6
473
721
1,519
5,228
2,123
836
363
336
239
Tractor Chassis with Engine
..
..
..
..
..
..
..
..
..
.. : not available
P : Provisional
* : Data has been revised according to new codification and introduction, shifting and deleting of new HS code for 2005-06 onwards
TABLE 14.6
POST AND TELECOMMUNICATIONS
Fiscal
Year
No of Post
Offices
Rural
Total
11,546 13,413
11,471 13,380
11,213 13,196
11,315 13,285
11,294 13,320
11,327 13,419
11,192 13,216
11,250 13,294
10,751 12,854
10,751 12,854
9,932 12,234
10,284 12,267
10,446 12,254
9,840 12,107
10,499 12,330
10,494 12,339
10,494 12,343
10,793 12,342
10,514 12,366
Urban
1990-91
1,867
1991-92
1,909
1992-93
1,983
1993-94
1,970
1994-95
2,026
1995-96
2,092
1996-97
2,024
1997-98
2,044
1998-99
2,103
1999-00
2,103
2000-01
2,302
2001-02
1,983
2002-03
1,808
2003-04
2,267
2004-05
1,831
2005-06
1,845
2006-07
1,849
2007-08
1,849
2008-09
1,852
Jul-Mar
2009-10
1,846 10,495 12,340
.. : Not Available
* : Included Cardpay Phones
** : All over country
Note : Telegraph offices closed in 2006
No of Telegraph
Offices
Urban Rural Total
195
302
497
299
210
509
320
210
530
327
85
412
330
86
416
319
104
423
340
93
433
356
92
448
308
93
401
293
91
384
293
91
384
258
104
362
239
87
326
215
73
288
215
77
292
..
..
..
..
..
..
..
..
..
..
..
..
Telephones
Internet No. of Internet
(000 Nos.) Connections
Cities
(Million)
connected
1188
..
1461
..
1548
..
1801
..
2126
..
2376
..
2558
..
2756
0.01
2861
0.20
3124
0.50
3340
0.80
3656
1.00
4940
1.60
1,350
4460
2.00
1,898
5191
2.10
2,210
5128
2.40
2,389
4806
3.50
2,419
4546
3.70
3,002
3523
3.50
**
No of
PCO
*
3,861
4,676
5,618
6,422
4,600
9,410
10,040
10,071
10,107
10,400
66,968
97,751
139,493
180,901
217,597
353,194
387,490
449,121
405,359
Mobile
Phones
..
..
..
..
..
68,038
135,027
196,096
265,614
306,463
742,606
1,698,536
2,404,400
5,022,908
12,771,203
34,506,557
63,160,874
88,019,812
94,342,030
..
3.50
**
..
97,579,940
Source: (i) : Pakistan Post Office
(ii) : Pakistan Telecommunications Company Ltd
(iii) : Pakistan Telecommunication Authority
Environment
15
Environment challengesandissuesof Pakistanare associatedprimarilywith animbalancedsocialand

economicdevelopmentinrecentdecades.Thischallengeisfurthercompoundedwithrapidurbanization
duetoashiftofpopulationfromruraltourbanareas.Thus,allmajorcitiesofPakistanfacehaphazard,
unplanned expansion leading to increase in pollution. This unchecked growth has led to creation of
slumsareasaroundcityperipheriesandlowlyingarea.Sincethemunicipalauthoritiesandutilityservice
providers have limitations in extending their facilities, urban congestion is the prime reason of ever
deterioratingambientairandwaterquality,solidwastemanagementandlossofbiodiversity.Underthe
present scenario, the managers of Pakistans major urban centres are facing rising difficulties in
developing their management plans to provide adequate water and sanitation facilities and health
servicestoensureahealthylivingenvironment.
Environmental degradation is fundamentally linked to poverty in Pakistan. Poverty is the main
impedimentin dealingwith theenvironmentrelated problems. Thereisanincreasingdemandonthe
already depleting natural resource base of the country. Since poor are directly dependent on natural
resources for their livelihoods whether agriculture, hunting forestry, fisheries, etc. Poverty combined
with a rapidly increasing population and growing urbanization is leading to intense pressures on the
environment.Thisenvironmentpovertynexuscannotbeignoredifeffectiveandpracticalsolutionsto
remedy environmental hazards are to be taken. Therefore, there has been a dire need to work on
povertyalleviation. Inthisregard,BenazirIncomeSupportProgramme (BISP)launched bythepresent
government is expected to have a positive impact on poverty alleviation and in releasing stress on
naturalresourcesandenvironment.
The MidTerm Development Framework: 20052010 (MTDF 200510) of the Planning Commission has
beendevelopedinlinewiththeNationalEnvironmentActionPlan(NEAP)objectives,andfocuseson
fourcoreareasi.e.,cleanair,cleanwater;solidwastemanagement,andEcosystemmanagement.The
PlanhasbeenpreparedkeepinginmindPakistansexperiencewithsuchinitiativesinthelastdecade;
thecurrentcapacitytoundertakeplanning,implementationandoversightandtheidentifiedneedsfor
improvement in such capacity. The MTDF clearly specifies issues in environment which need to be
addressed.
15.1AirPollution
Main factors causing degradation to air quality are, a) rapidly growing energy demand and b) a fast
growing transport sector. In the cities, widespread use of lowquality fuel, combined with a dramatic
expansioninthenumberofvehiclesonroads,hasledtosignificantairpollutionproblems.Airpollution
levelsinPakistansmostpopulatedcitiesarehighandclimbingcausingserioushealthissues.Although
Pakistansenergyconsumptionisstilllowbyworldstandards,butleadandcarbonemissionsaremajor
airpollutantsinurbancentres.
221
Table15.1:TheMTDF200510andMDGsTargetsandAchievements
PhysicalTargetsofMTDFperiod
Achievement
NameofSector/SubSector
200910
MDGTargets
ofTarget
Year200405
Targets
2015
Forests cover including State and private
4.9%
5.2%
6.0%
5.17%
forests/farmlands(%ageoftotallandarea)
Area protected for conservation of wildlife
11.3%
11.6%
12.0%
11.3%
(%ageoftotalarea)
No.ofpetrol&dieselvehiclesusingCNGfuel
380,000
800,000
920,000
2,400,000
Accesstosanitation(national%age)
42
50
90
44
Accesstocleanwater(national%age)
65
76
93
65
Numberofcontinuousairpollutionmonitoring
0
4
7
stations.
Number of regional offices of Environmental
0
8
16
6
ProtectionAgencies
FunctionalEnvironmentalTribunals
2
4
4
SeveralstudiescarriedoutbyEnvironmentProtectionAgency(EPA)andtheairqualitydatarecordedby
continuous monitoring stations in 5 capital cities confirmed presence of high concentration of
suspended particulate matter. The level of PM (particulate matter size below 2.5 micron), which is
mainlyduetocombustionsources,hasreachedtoanalarmingpoint(23.6timeshigherthanthesafe
limit).Table15.2andFig1showsaveragepollutantsin5capitalcities
1.
Islamabad
73.0
2.
Lahore
121.8
3.
Karachi
53.2
4.
Peshawar
70.2
5.
Quetta
47.1
SafeLimit
35.0
Source:EnvironmentProtectionAgency(EPA)
140
Fig1:LevelsofParticulateMatter
(PM2.5)
121.83
120
100
ug/m3
Table15.2:AverageSuspendedParticulateMatter
(PM2.5)
City
Levelug/m3
80
60
73
70.1
53.2
47.1
40
20
0
Source:EPA
ThelevelofgaseslikeCarbonMonoxide(CO),SulphurDioxide(SO2),Ozone(O3)andHydrocarbon(HC)
are still within safe limits though some pockets of high concentration are found in congested places,
whichgiveshorttermexposuretopublic.Formationofsecondarypollutantslikesulphatesandphoto
chemicalsmogisaverycommonphenomenon.
Themain causesofairpollutionare abruptincreaseinnumberofvehiclesandinefficientautomotive
technology, use of unclean fuels, uncontrolled emission of industrial units, emission of brick kilns,
burning of garbage and presence of loose dust. Motorcycles and rickshaws, due to their two stroke
222
Environment
engines, are the most inefficient in burning fuel and contribute most to emissions. The two wheeler
industry is performing very fast in Pakistan and it has increased by 143.0 percent in 200910 when
comparedwiththeyear200001.Rickshawshavegrownbymorethan34.4percentwhilemotorcycles
andscootershavemorethandoubledoverthetenyears.(seeTable15.3)
Table15.3:MotorVehiclesontheRoad
Year
200001
200102
200203
200304
200405
200506
200607
200708
200809
200910(JulyMarch)
Percentageinc./dec.over200001
E:Estimated
Total
2291.3
2561.9
2737.1
2963.5
3144.5
3868.8
4542.8
5126.3
5456.4
5567.2
143.0
(000 Nos)
Motorcycles/Scooter
Rickshaws
2218.9
72.4
2481.1
80.8
2656.2
80.9
2882.5
81.0
3063.0
81.5
3791.0
77.2
4463.8
79.0
5037.0
89.3
5368.0
88.4
5469.6
97.3
146.5
34.4
Source:National TransportResearchCentre
Forthelasttenyears,theuseofcoalinthepowersectorhasbeendecreasing.Itmaybeduetothefact
thatanumberofplantshavenowbeenconvertedtonaturalgas.Likewise,therehasbeenreductionin
coalusagefordomesticpurposes(Table15.4).
Table15.4:ConsumptionofCoal
Year
200001
200102
200203
200304
200405
200506
200607
200708
200809
200910(JulyDec.)
E:Estimated,:NotAvailable
Power
205.8
249.4
203.6
184.9
179.9
149.3
164.4
162.2
112.5
55.1
(000M/Tons)
BrickKilns
Household
2837.9
1.0
2577.5
1.1
2607.0
1.1
2589.4
1.0
3906.2
4221.8
3277.4
1.0
3760.7
1.0
3205.4
0.8
2379.1
0.8
PakistanhasbecomethelargestuserofCompressedNaturalGas(CNG)intheworld,asperthestatistics
issuedbyInternationalAssociationofNationalGasVehiclesonCNG.Presently,3105CNGstationsare
operatinginthecountryand2.4millionvehiclesareusingCNGasfuel(seeTable15.5).UseofCNGas
fuelintransportsectorhasobservedaquantumleap,replacingtraditionalfuelsandhashelpedalotin
lowering the pollution load in many urban centers. After the successful CNG programme for petrol
replacement, the government is now looking to replace the more polluting diesel fuel in the road
transportsector.ThegovernmenthasplannedtoofferincentivestoinvestorstointroduceCNGbusesin
themajorcitiesofthecountry.
223
Table15.5
5:GrowthinCNGSector
Ason
December,,1999
December,,2000
December,,2001
December,,2002
December,,2003
December,,2004
December,,2005
December,,2006
16thMay,2
2007
February,2
2008
April,2009
9
December,,2009
CNGStations(No.))
ConvertedVehicles(No.))
62
60
0,000
150
12
20,000
218
21
10,000
360
33
30,000
475
45
50,000
633
66
60,000
835
1,0
050,000
1,190
1,3
300,000
1,450
1,4
400,000
2,063
1,7
700,000
2,760
2,0
000,000
3,105
2,4
400,000
S
Source:HDPIht
ttp://www.hd
dip.com.pk,OG
GRA,IANGVhtttp://www.iang
gv.org
The Moto
or Vehicle Exxaminers (MV
VE) have no facilities to scientifically check fitnesss or emissio
ons of
vehicles. At present, only
o
commerrcial vehicles are checked by MVE. Evven passed veehicle cannott give
assuranceeofcomplianceofstandarrds.Noprivattevehicleund
dergoesanym
mandatoryinspection/emission
check.
15.2WatterPollution
Water po
ollution has been steadilyy increasing over the yeears. The sou
urces of this pollution in
nclude
uncontrollleddischarge
esofmunicipalaswellasiindustrialwasstesinwaterbodies,runofffromagricu
ulture
fields where agrochemical usage has been in
ncreasing and
d other natu
ural as well as anthropo
ogenic
activitiesttakingplaceiinthecatchm
mentareas.
The existting water re
esources in the country are
Fig2
2:Consumptio
onofWater
under th
hreat due to
t untreated discharge of
(Percentage)
municipallandindustriialwastesto riversandotther
surface water
w
bo
odies. The majority
m
of the
8%
populatio
on of Pakistan
n is exposed to the hazard of
23%
unsafe an
nd polluted drinking waater. Untreaated
sewage,in
ndustrialefflu
uents,andaggriculturalrun
noff
69%
are usually released in streams orr drains into the
rivers and
d sea. Pollute
ed water posses potential risk
to public health. High incidence of water bo
orne
diseases can directlyy be attributted to pollu
uted
A
Agriculture
Industry
Domesticuses
waters in lakes. Other imp
pacts of high
Soure:Ministry of
f Environment
he waters include
i
loss of
contamination in th
osystems, reeduction in fish
biodiversiity and eco
populatio
onanddamaggetosoilsand
dcropsintheeirrigatedareeas.
Theconsu
umptionofw
waterinAgricculture,IndusstrialandDom
mesticsectorisshownbelowaspercentage
totaluse.(seeTable15
5.6)andFig2
2.
224
Environment
After use, the remaining water becomes

wastewater containing all kinds of toxic chemicals
andbiologicalcontaminants.Municipalsewerageisa
majorsourceofpollution.About2millionwettonsof
human excreta are annually produced in the urban
sector of which around 50% goes into water bodies
to pollute them. About 70% of biological load is
generatedbytextileandbeverageindustry.
Table 15.6:ConsumptionofWater
Sectors
Percentage
Agriculture
69%
Industry
23%
Domestic
08%
Source:MinistryofEnvironment
NationalConservationStrategy(NCS)indicatedthatalmost40%ofdeathswererelatedtowaterborne
diseases.Untreatedwastewaterfromindustriesfurtheraggravatesthesituation.About8%ofthetotal
wastewater is treated and rest of the quantity is discharged untreated into different surface water
resourceslikecanals,rivers,lakesandsea.OnlythreecitiesKarachi(2),Faisalabad(1)andPeshawar(1)
have treatment plants but they are under capacity and do not meet NEQS. Recently, Capital
Development Authority (CDA) has installed a modern wastewater treatment plant in Islamabad which
complywiththeNationalEnvironmentQualityStandards(NEQS).
Industry that has the largest potential of wastewater discharges mostly comprises of textile, tannery,
paper and pulp. About 9000 million gallons of wastewater are daily discharged into water bodies in
PunjabandKarachi.Sometreatmentplantshavebeeninstalledbytheindustries(about133inPunjab,
207inSindhand2inNWFP).EnvironmentProtectionAgencies(EPAs)arerandomlycheckingpollution
levelsofindustryandmunicipalwasteandfillingcasesintheEnvironmentalProtectionTribunals.
WaterisnotconsideredasapreciouscommodityinPakistanasminimalwaterchargesareleviedon
the treated domestic water or on agricultural water. There is no restriction on extraction of ground
waterforanypurposes.Underthisscenario,conservationofwaterresourcesdoesnotgetimportance.
Same is the case with treatment of sewerage and industrial toxic waste. Weak enforcement of NEQS,
lack of cost effective indigenous technology and resource constraint are the predominating factors of
not treating wastewater. The most important element is the disinterests of municipal authorities to
address this issue. Some Water and Sanitation Agencies (WASAs) have planned treatment plants for
Rawalpindi, Lahore, Faisalabad and Multan with the assistance of Asian Development Bank but the
projectsfinancinghasnotyetbeenmadeavailable.Treatmentofsewageandutilizingtreatedwaterfor
agriculturepurposescouldbeagoodoptionforagriculturecountrylikePakistan.Anotherconstraintis
nonavailabilityoflocallymanufacturedcosteffectivepollutioncontroltechnologies.
Since the untreated wastewater is discharged into the rivers and other water bodies, the quality of
waterresourceshasbeendegraded.Peoplelivingdownstreamofrivers,particularlyinlowerPunjaband
Sindh, who have no other means, use this water for drinking. According to the WHO report about
2530%ofallHospitaladmissionsareconnectedtowaterbornebacterialandparasiticconditions,with
60%ofinfantdeathscausedbywaterinfections.Thelongtermeffectsonhumanhealthofpesticides
and other pollutants includes colon and bladder cancer, miscarriage, birth defects, deformation of
bonesandsterility.Duetolowoxygeninriverwaters,fishcatchhasalsodecreasedadverselyaffecting
livelihoodofpeople.
The National Drinking Water Policy has been approved by the Cabinet in order to provide adequate
qualityofdrinkingwatertothepopulationinanefficientandsustainablemanner.Thispolicyaimsto
provideaguidingframeworktoaddressthekeyissuesandchallengesfacingPakistanintheprovisionof
sustainable access to safe drinking water. Currently over 65 percent of Pakistans population is
225
considered to have access to safe drinking water. Huge disparities, however, exist with regard to
drinking water coverage between urban and rural areas and provinces/regions. The quality of the
drinkingwatersupplyisalsopoor,withbacterialcontaminationarsenic,fluorideandnitratebeingthe
parametersonmajorconcern.Sustainabilityoftheexistingwatersupplysystemsisalsoamajorissuein
thesector.
Inadequatewatersupplysanitationandhygieneresultinhighincidenceofwaterandsanitationrelated
diseasesinPakistan,whichinturnincreasemortalityratesandposeamajorthreattothesurvivaland
development of Pakistan children. It has been estimated that water, sanitation and hygiene related
diseases cost Pakistan economy about Rs 112 billion per year over Rs 300 million a day, in terms of
health costs and lost earning.1Out of this, the cost associated with diarrhoeal diseases alone is
estimatedtorangefromRs55to80billionperyear.
Thekeyprinciplestobepursuedforimplementationofthepolicyareasfollows:
i) Access to safe drinking water is the basic human right of every citizen and that it is the
responsibilityoftheGovernmenttoensureitsprovisiontoallcitizens.
ii) Waterallocationfordrinkingpurposeswillbegivenpriorityoverotheruses.
iii) In order to ensure equitable access, special attention will be given to removing the existing
disparities in coverage of safe drinking and for addressing the needs of the poor and the
vulnerable.
iv) Recognizing the fact that women are the main providers of domestic water supply and
maintainersofhygienichouseholdenvironment,theirparticipationinplanning,implementation,
monitoringandoperation&maintenanceofwatersupplysystemswillbeensured.
v) Responsibilitiesandresourceswillbedelegatedtolocalauthoritiestoenablethemdischargetheir
assignedfunctionswithregardtoprovisionofsafewatersupplyinaccordancewithLocalBodies
Legislation.
15.3Land
Pakistanispredominantlyadrylandcountrywhere80percentofitslandareaisaridorsemiarid,about
12percentisdrysubhumidandremaining8percentishumid.TwothirdofPakistansrapidlyincreasing
population depends on drylands to support their likelihood mainly through agropastoral activities.
However, like many other developing countries dry lands in Pakistan is severely affected by land
degradation and desertification due to unsustainable land management practices and increasing
demandofnaturalresourcescausingenormousenvironmentalproblems,includingdegradationofdry
landecosystems,lossofsoilfertility,flashfloods,lossofbiodiversity,reductioninlandproductivity,soil
erosion, water logging salinity, and many other associated problems to rapid growth in population is
puttingpressureonnaturalresources.Thesituationisfurtheraggravatedbyscarcityofwater,frequent
droughts and missmanagement of land resources, contributing to expansion of deserts, reduced
productivity and consequent increases in rural poverty. Moreover there is limited knowledge of
consequences and economic implications of land degradation, information gaps, and limited
institutional capacity to address and degradation and desertification problems through an integrated
landmanagementapproach.
Pakistan Strategic Country Environment Assessment (2006), the World Bank.
226
Environment
Table15.7:CausesandEffectsofLandDegradationin Barani(RainFed)Lands
Causesoflanddegradation
Effectsandimplications
Soilerosion
Soilerosionresultsinsiltationofrivers,irrigationsystemsandsmalldams,
debrisflowandlandslidesonhillslopesimpairingoftextureandstructure
ofsoilandlossofsoilnutrients,excessivewaterrunoff,riseinfrequency
offloodsdecreaseinwaterretainingcapacityofsoils.
Slopingcultivation
Clearing of forest land for crop cultivation, illicit cutting of trees for
firewoodandagriculturalimplements.
Overgrazing
Overgrazing cutting and lopping of forage trees, damage to young forest
crop and nurseries, disturbance or compaction of soil, increase in soil
erosion. Reduction in wildlife habitat quality and quantity, competition
with livestock for forages and space, less regeneration of natural
vegetationduetocompactionofsoil.
Deforestation
Deforestation results in excessive soil and water erosion, drying of
aquifers, reduced carbon sequestration, aridity in climate, reduction in
water retaining capacity of soil, excessive water runoff, destruction and
deterioration of wildlife resulting in lower number of wild animals and
birds.
Landtenureissues
Fragmentation of land holdings, cutting of forest for fuel, timber and
loppingforforage,clearingofforestareasforcropcultivation.
Poormanagementofnatural
Illegalcuttingoftreesinforestsandwatersheds,reductioninscrubforest
resources/forests.
cover, inadequate reforestation due to insufficient resources has
increased soil erosion and siltation of rivers. Weak law enforcement to
checktheftandillegalremovalofvegetationquiteevident.
Source:NationalActionPlantoCombatDesertification,M/oEnvironment
The menace of land degradation and desertification is not only affecting rainfed agriculture and
pastoral systems, but also reducing productive potential of irrigated agroecosystems due to water
logging and salinity. Sustainable Land Management (SLM) is now considered as a viable option to
combat land degradation and desertification. Federal and Provincial Governments have to integrate
SLMprinciplesintosectoralpolicies,strategiesandplans,aslanddegradationadverselyaffectsnatural
resourcebasedlivelihoodoftheruralpoor.FederalGovernmentshallsupportprovincialgovernments
to combat desertification as recommended under Poverty Reduction Strategy Paper (PRSP), National
ActionProgramme(NAP)andaligningPakistansNAPwith10YearStrategicPlanoftheUntiedNations
Convention to Combat Desertification (UNCCD) (see Table 15.7). According to National Forest Policy,
NationalDesertificationControlFundasenvisagedunderNAPandUNCCDshallbeestablishedtoensure
continuedfinancialsustainabilityforSLMinterventionsatgrassrootslevel.Appropriateincentivesshall
be designed to enlist the participation of local communities in sustainable management of land
resources.
15.4Forestry
Forests are crucial for the well being of humanity. They provide foundations for life on earth through
ecologicalfunctions,byregulatingtheclimateandwaterresourcesandbyservingashabitantsforplants
and animals. Forests also furnish a wide range of essential goods such as wood, food, fodder and
medicinesinadditiontoopportunitiesforrecreation,andotherservices.Forestsareunderpressuredue
toexpandinghumanandlivestockpopulationswhichfrequentlyleadstoconversionordegradationsof
forestsintounsustainableformsoflanduse.Whenforestsarelostorseverelydegraded,theircapacity
to function as regulators of the environment is also lost, increasing floods and erosion hazards,
reducingsoilfertilityandcontributingtothelossofplantandanimallife.Asaresult,thesustainable
227
provisionofgoodsandservicesfromforestsarejeopardized.
Theexistingforestresourcesareunderseverepressuretomeetthefuelwoodandtimberneedsofthe
countryandwoodbasedindustriesincludinghousing,sportsgoods,matches,boatmakingandfurniture
industry in the country. There is need to increase the area under tree cover not only to meet the
material needs of the growing population but also to enhance the environmental and ecological
servicesprovidedbytheforest.
UnderMillenniumDevelopmentGoalsofForestrySector,Pakistaniscommittedtoincreaseforestcover
from existing 5.2% to 5.7% by the year 2011 and 6% by the year 2015. An increase of one percent
impliesthatanadditional1.051millionhectaresareahastobebroughtunderforestcoverby2015.This
willincludeallstatelands,communallands,farmlands,privatelandsandmunicipallands.
15.4MeasurestoEnhanceForestCover
MassafforestationandTreePlantingCampaigns
Twointerprovincialmeetingstofinalizethetargetsandstrategiesforthemonsoonandspringtree
plantingcampaignswereheldunderthechairmanshipoftheMinisterforEnvironment.Duringthe
treeplantingcampaign55.77million and35.96milliontreeswereplantedinspringand monsoon
seasons respectively. The Federal Forestry Board develops policies and strategies related to the
Forestry Sector and also monitor the activities of the Provincial Forest Departments including the
forestcoverThisBoardcomprisestherepresentativesfromtheProvincialForestDepartments,AJK,
GilgitBaltistan,NGOsprogressivegamersandotherstakeholders
NationalVision2030
By2030thecountrywillbemanagingalltypesofforestsonecosystemapproach,enablingthemto
perform potential functions of conserving biodiversity, providing sustainable livelihood to
dependent communities, meeting national demands for wood and contributing positively to
mitigate global environmental problems. Achievement of the Vision 2030 on forest biodiversity
conservationisacombinedresponsibilityofallforeststakeholders.
NationalForestPolicy
Ministry of Environment is in process of formulating the National Forest Policy 2010 to provide a
broadframeworkforaddressingissuesofforestsandrenewablenaturalresourcesofPakistanand
their sustainable development for the maintenance and rehabilitation of environment and
enhancement of sustainable livelihoods. The Policy provides broad guidelines to the Federal
Government,ProvincialGovernments,FederallyAdministeredTribalAreasandLocalGovernments
forensuringthesustainablemanagementoftheirforestsandrenewablenaturalresources.
GuinnessWorldRecord
PakistanhassetanewGuinnessWorldRecordinmaximumtreeplantingduring24hoursonJuly15,
2009;threehundredplantersfromthelocalcommunitiesplanted541,176propagulesofmangrove
treeson796acresonanislandatKetiBundarintheIndusDetta.
NationalTreePlantingDay
PrimeMinisterofPakistandeclared18thAugustasNationalTreePlantingDay(NTPD).Theobjective
228
Environment
is to address deforestation and associated environmental problems being faced by the national
throughmotivationandinvolvementofallsegmentsofthesocietyintreeplantationcampaign.On
18thAugust2009massiveplantationwascarriedoutthroughoutPakistanwiththehelpofProvincial
ForestDepartmentsandFederallineMinistries/agencies.
PresidentMassAfforestationProgramme
President of Pakistan has launched a mass afforestation programme on December 22, 2008. This
programme is spread over a period of five years and shall largely be sponsored by private
entrepreneurs for planting trees on state and other suitable lands. Private entrepreneurs are an
integralpartofthisprogramme.Manyprivatecompanieshaveexpressedgreatinterestininvesting
inenvironmentalforestryaspartoftheirCorporateSocialResponsibility.
MangrovesfortheFuture(MFF)
Mangroves for the Future (MFF) initiatives focus on the countries worstaffected by the tsunami.
However,MFFwillalsoincludeothercountiesoftheRegionthatfacesimilarissueswithanoverall
aimtopromoteanintegratedocean wideapproachto coastalzonemanagement.Pakistanjoined
MFFasdialoguecountryin2008andprepareditsdraftNationalStrategy&ActionPlan(NSAP)as
per requirements of Regional Steering Committee of MFF to become regular member of this
regionalprogramme.
The 6th Regional Steering Committee (RSC) meeting of the MFF held in Thailand during January
2010 considered the Pakistans National Strategy and Action Plan and made it model for other
countries to follow. Pakistan also becomes the regular member of MFF. As a member, Pakistan is
now entitled to received assistance for institutional strengthening, capacity building and for
implementationofsmallandlargeprojectsincoastalareasofPakistanfromApril2010.
15.5ClimateChange
Climate change resulting from an increasing
concentration of Greenhouse Gases (GHGs) in the
atmosphere due to the use of fossil fuels and other
human activities has become a major worldwide
concern. It is particularly so for Pakistan because
climate change is posing a direct threat to its water
security, food security and energy security. The
countrys vulnerability to such adverse impacts is
likelytoincreaseconsiderablyinthecomingdecades
as the average global temperature, which increased
by 0.6 C over the past century, is projected to
increase further by 1.1 to 6.4 C by the end of the
current century. Already Pakistan is rated as a high
risk country in the global rankings for Climate
ChangeVulnerabilityIndex(CCVI)2009/10.(see15.8)
Table 15.8: Climate Change Vulnerability Index

(CCVI)2009/10
Rank
Country
Rating
1
Somalia
Extreme
2
Haiti
Extreme
3
Afghanistan
Extreme
29
Pakistan
HighRisk
44
Philippines
HighRisk
56
India
HighRisk
61
Indonesia
HighRisk
110
China
MediumRisk
152
USA
LowRisk
155
UK
LowRisk
166
Norway
LowRisk
Source:Maplecroft
229
PastandExpectedFutureClimaticChangesoverPakistan
During the last century, average annual temperature over Pakistan increased by 0.6 C, in
agreement with the global trend, with the temperature increase over northern Pakistan being
higherthanoversouthernPakistan(0.8Cversus0.5C).PrecipitationoverPakistanalsoincreased
ontheaveragebyabout25%.StudiesbasedontheensembleoutputsofseveralGlobalCirculation
Models(GCMs)projectthattheaveragetemperatureoverPakistanwillincreaseintherange1.3
1.5 C by 2020s, 2.52.8 C by 2050s, and 3.94.4 C by 2080s, corresponding to an increase in
average global surface temperature by 2.83.4 C by the turn of the 21st century. Precipitation is
projectedtoincreaseslightlyinsummeranddecreaseinwinterwithnosignificantchangeinannual
precipitation. Furthermore, it is projected that climate change will increase the variability of
monsoon rains and enhance the frequency and severity of extreme events such a floods and
droughts.
PakistansStatusasaGHGEmitter
Pakistans total GHG emissions in 2008 Table15.9:GHGEmissions(2008)
amounted to 309 million tones (mt) of Carbon Countries
Absolute
PerCapita
dioxide(CO)equivalent, comprisingabout54%
(MillionMetrictons) (Metrictons)
CO, 36% Methane, 9% Nitrous Oxide and 1% Australia
437.4
20.8
other gases. The biggest contributor is the UnitedStates
5,832.8
19.2
energysectorwith50%shares,followedbythe Iran
511.1
7.8
415.3
6.5
agriculture sector (39% share), industrial France
162.4
6.4
processes (6% share) and other activities (5% Malaysia
China
6,533.6
4.9
share). Pakistan is a small GHG emitter. It
Indonesia
434.1
1.8
contributes only about 0.8% of the total global
India
1,494.9
1.3
GHG emissions, on per capita basis, Pakistan
147.8
0.9
with 1.9 tonnes per capital GHG emissions Pakistan
Philippines
79.8
0.8
stands at a level which corresponds to about
SriLanka
13.3
0.6
onethirdof theworldaverage,onefifthof the
Source:EnergyInformationAdministration(EIA)
average for Western Europe and one tenth of
thepercapitaemissionsintheUS,puttingitat135thplaceintheworldrankingofcountriesonthe
basisoftheirpercapitalGHGemissions.(seeTable15.9)
MajorClimateChangeRelatedConcerns
ThemostimportantclimatechangepotentialthreatstoPakistanareidentifiedas:
Increasevariabilityofmonsoon;
RapidrecessionofHindusKushKarakoramHimalayan(HKH)glaciersthreateningwaterinflows
intotheIndusRiverSystem(IRS);reductionincapacityofnaturalreservoirsduetoglaciermelt
andriseinsnowline;
Increasedrisksoffloodsanddroughts;
Increasedsiltationofmajordamsresultingingreaterlossofreservoircapacity;
Severewaterstressedandheatstressedconditionsinaridandsemiaridregions;leadingto
reducedagricultureproductivityandpowergeneration;
230
Environment
IncreasedupstreamintrusionofsalinewaterintheIndusdelta,adverselyaffectingcoastal
agriculture,mangrovesandbreedinggroundsoffish;and
Threattocoastalareasduetosealevelriseandincreasedcyclonicactivityduetohighersea
surfacetemperatures.
TheabovethreatsleadtomajorconcernsforPakistanintermsofitsWaterSecurity,FoodSecurity
and Energy Security. Some other climate change related concerns of Pakistan are identified as:
Increaseindeforestation;lossbiodiversity;increasedhealthrisks(heatstrokes,pneumonia,malaria
and other vectorborne diseases) and risks to other vulnerable ecosystems (e.g. rangelands,
degradedlands,mountainousareasetc).
A Task Force on Climate Change (TFCC) was set up by the Planning Commission of Pakistan in
October2008.TheTaskForcereportrecommendsanumberofmeasurestoaddressbothMitigation
andAdaptationaspectsofclimatechange.Italsoidentifiesvariousongoingactivitiesandplanned
actionsenvisagedundertheplanningCommissionsMediumTermDevelopmentFramework2005
10andVision2030whichimplicitlyrepresentPakistansplansandactionstowardsmitigationand
adaptation efforts. Main recommendations of the Task Force on climate change are summarized
below:
MitigationMeasure
Energyefficiencyimprovementatalllevelsintheenergysystemchain.
Expansionofnuclearpowerprogramme.
Developmentofmasstransitsystemsinlargecities.
GreateruseofCNGasfuelforurbantransportation.
Newmethodsofricecultivationthathavelowermethaneemissions.
Development and adoption of new methods for reducing Nitrous Oxide releases from
agriculturalsoils
New breeds of cattle which are more productive in terms of milk and meat but have lower
methaneproductionfromentericfermentation
Intensiveeffortonforestationandreforestation.
AdaptationMeasures
Addition of sufficient reservoir capacity on IRS Rivers so that even during high flood years no
waterflowsdownKotriinexcessofwhatisnecessaryforenvironmentalreasons.
Developmentofnewbreedsofcropsofhighyield,resistanttoheatstress,droughttolerant,less
vulnerabletoheavyspellsofrain,andlesspronetoinsectsandpests.
Aggressive afforestation and reforestation programmes with plantation suited to the looming
climatechange.
Preservationofrangelandsthroughproperrangelandmanagement.
Theeffortoncommunicatingclimatechangerelatedinformationtotheintelligentsiaaswellas
the general pubic and raising their awareness of the critical issues should be substantially
expanded.
231
Capacity enhancement of all the organizations in the country which could make useful
contributiontowardsaddressingclimatechange.
IntroductionofclimatechangerelatedscientificdisciplinesinPakistansleadinguniversitiesso
astoensurearegularsupplyoftrainedmanpower,and
EstablishmentofaNationalDataBankforclimatological,hydrological,agrometeorologicaland
otherclimatechangerelateddatatocaterfortheneedsofallrelevantinstitutions.
InternationalNegotiationsforFutureClimateChangeRegime
Salient recommendations of the Task Force regarding Pakistans position in international
negotiationsforapost2012climatechangeregimeare:
Globaltemperatureshouldnotbeallowedtoexceed2C.
StriveforthecontinuationoftheKyotoProtocol.
CallfordeepcutsinGHGemissionsbydevelopedcountries.
AvoidanyonerousbindingGHGemissionreductionobligationsonPakistan.
Insistthat,basedontheprincipleofequity,anycaponGHGemissionsshouldbeonauniversal
percapitalevelbasisandapplyequallytoallcountries.
ProjectPakistanasaresponsibleandconstructivememberofinternationalcommunityandseek
accesstoadvancedCarbonfreeandlowCarbonandCleanGoaltechnologies.
EmphasizeadaptationasakeypriorityforPakistan.
Calltodefineandestablishvulnerabilityonscientificbasis.
Rejectlinkagebetweenclimatechangeandinternationaltrade.
Seeksubstantialincreaseininternationalfundingforadaptationandcallfornewfinancialand
technologicalmechanism.
Seek approval for nuclear power as an admissible Clean Development Mechanism (CDM)
technology.
ContinuetosupportthepositionoftheG77andChina.
15.6
PublicSectorDevelopmentProgramme,200910
The Government of Pakistan has increased its funds allocation to the Environment and Sustainable
Developmentinitscurrentpublicsectordevelopmentprogramme.Overall,anallocationofaroundRs
5,500millionhasbeenmadefortheenvironmentsectorprojectsinthefederalPSDP200910.Thereare
about 55 projects under implementation, which fall in the brown, green and capacity building
components/subsectors of environment such as: mass awareness, environmental education and
environmentprotection;preparationoflanduseplan;fuelefficiencyinroadtransportsector;projected
areas management; forestry; biodiversity; watershed management; hospital waste management;
environmental monitoring; capacity building of environmental institutions; natural disaster, early
warningandmitigation;improvementofurbanenvironment;etc.However,releaseoffundsremaineda
seriousissueduringtheyearduetofinancialcrunchbeingfacedbythecountry.
Many projects including forestry, watershed management and biodiversity projects in Mangla and
TarbelaWatershedsareunderwaytoreducesedimentload,createemploymentopportunities,alleviate
232
Environment
poverty, conserve the natural resources and rehabilitate the degraded land resources through
nurseries and plantations, construction of check dams, soil conservation, establishment of community
organizations,terracing,etc.Varioustreeplantingprojectsareunderimplementation.Thetreecoverin
the country (state and privately owned) has increased by 5.17%. To achieve the MDGs targets of
vegetationcoverof6%by2015,6projectsofforestryresourcedevelopmentcostingRs.12.00billionare
underimplementation.
Installation of water filtration plants in different pockets is underway. Sustainability of these water
filtration plants needs to be ensured through compliance of already deliberated operation and
maintenance aspects as well as ownership by the provincial/state and local governments. After
completionoftargetsforeachunioncouncil,nextphaseoftheprogramme,i.e.toinstalloneplantin
eachvillagemaybetakenup.
233
Population,LabourForce
andEmployment
16
Pakistanistheworldssixthmostpopulouscountry1.Withanestimatedpopulationof169.9millionasat
endJune 2009, and an annual growth rate (revised) of 2.05 percent, it is expected that Pakistan will
becomethefourthlargestnationonearthinpopulationtermsby2050(Fig16.1).
Fig1:Actualversusprojectedpopulation,selectedcountries
Thousands
1,800,000
1,600,000
ActualPopulation(2008)
1,400,000
ProjectedPopulation(2050)
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
CHINA
INDIA
USA
INDONESIA
BRAZIL
PAKISTAN
Source:World Bank
Withamedianageofaround20years,Pakistanisalsoayoungcountry.Itisestimatedthatthereare
currentlyapproximately104millionPakistanisbelowtheageof30years.Totalworkingagepopulation
is121.01million,withthesizeoftheemployedlabourforceestimatedat52.71millionasof200809.
Table16.1:SelectedDemographicIndicators
2007
2008
2009
2010
TotalPopulation(million)
162.91
166.41
169.94
173.51
UrbanPopulation(million)
56.82
58.74
60.87
63.05
RuralPopulation(million)
106.09
107.67
109.07
110.46
TotalFertilityRate(TFR)
3.9
3.8
3.7
3.6
CrudeBirthRate(PerThousand)
29.1
28.7
28.4
28.0
CrudeDeathRate(PerThousand)
7.9
7.7
7.6
7.4
PopulationGrowthRate(Percent)
2.12
2.10
2.08
2.05
LifeExpectancy(Years)
63.4
63.7
64.1
64.5
Male
62.7
63
63.3
63.6
Female
64.1
64.5
65.0
65.4
Source:SubGroupIIonPopulationProjectionsforthe10thFiveYearPeoplesPlan201015.
Pakistanspopulationestimateshaveundergonearecentrevision.Latestestimatesarebasedonrecentprojectionscarried
th
outbytheSubGroupIIonPopulationProjectionsforthe10 FiveYearPeoplesPlan201015.Thesewereofficiallyreleased
aftertheStatisticalportionoftheEconomicSurveywenttoprint.Therefore,thepopulationnumbersusedinthischapterwill
not tally with the Federal Bureau of Statistics estimates used to calculate percapita income in Table 1.5 of the Statistical
Appendix.
235
Theproportionofpopulationresidinginurbancentreshasrisento36%.Since1950,itisestimatedthat
Pakistan'surbanpopulationhasexpandedoversevenfold.
Despite a gradual decline in the Total Fertility Rate (TFR), currently close to 4, Pakistan has been a
laggardinachievingabreakthroughonthisfront.
Fig2:TrendinTotalFertilityRateinPakistan19702009
7
6
5
4
3
2
1
0
197075
1984
198691
199296
199700
2006
2007
2009
Source:NationalInstituteofPopulationStudies(NIPS)basedonPDSSurvey2007(FBS)
TheleveloffertilityinPakistanremainedconstantat6.8childrenperwomanfrom1961through1987,
population grew as life expectancy increased and fertility rate remained constant. Growth rate of
populationdeclinedduring19902000becausefertilityratedeclinedrapidlyduringthisperiodandlife
expectancystagnated.Fertilityratebeganbydecliningrapidlyinthedecadeof19912000,fallingfrom
6.3 to 4.8 children. The fertility decline started around 1988 with a reduction of approximately 2
children per woman in each decade through 2000 and later years, the subsequent decade 20002009
hasseenaslowingofthefertilitytransitionwithafallfrom4.8toabout4.0.
Thedraftpopulationpolicy200910envisagestoreducefertilitylevelfrom3.56(2009)to3.1birthsper
womanbytheyear2015.Toachievethiscontraceptiveprevalenceratehastoincreasefrom30to60
per cent by 2030. Lately the rise in CPR was from 12 to 28 from 1991 to 199798, an average of 2
percentayear,therisefrom1998until2004is2833,lessthanonepercentayear.
Table16.2:TOTALFERTILITYRATESCOMPARISON(19702010)
Country
197075
197580
198085
198590
1995
200005
200510
2000
Pakistan
7.00
6.80
6.60
6.45
5.67
4.98
4.44
4
Bangladesh
6.85
6.63
5.92
4.89
3.96
3.30
2.80
2.36
India
5.26
4.89
4.50
4.15
3.86
3.46
3.11
2.76
China
4.77
2.93
2.61
2.63
2.01
1.80
1.77
1.77
Source;PopulationDivisionoftheDepartmentofEconomicandSocialAffairsofUnitedNationsSecretariat,World
PopulationProspects:The2008Revision.
(ThetableaboveissourcedfromUnitedNationsstatistics,whichmaydifferfromothercitedfiguresusedelsewhere
inthedocument).
199095
16.1PopulationOverview
PopulationtrendsarebestexplainedbyCBR(Crudebirthrate),andCDR(Crudedeathrate).Theseshow
the growth and decline of a population per thousand births while IMR (Infant mortality rate) is the
236
Population,LabourForceandEmployment
number of newborns dying under a year of age divided by the number of live births during the year
times1000.Theinfantmortalityrateisalsocalledtheinfantdeathrate.Itisthenumberofdeathsthat
occurinthefirstyearoflifefor1000livebirths.Alltheseindicatorshaveimprovedifweseethepattern
from the last census in 1998. CBR declined by 20.32%, CDR by 12.79% and IMR by 17.73% taking the
time period from 19992009. This analysis confirms the juncture we are at, in terms of demographic
transition.Fertilityandmortalitybothareonthedeclineandwehaveanopportunitytoreapthewidely
acclaimedDemographicDividend.
Fig3:TRENDSINCBR,CDR&IMR
CBR
CDR
IMR
120
100
80
60
40
20
0
1991 1992 1993 1994 1995 1996 1997 1999 2002 2003 2004 2006 2007 2008 2009
Growth rates in the above parameters have been fluctuating since 1950. The period of demographic
transition when dependency ratio decreased is clearly marked as the demarcation towards lower
growthratesandthatoccurredfrom1990onwards.Thegrowthrateistodeclinefurtherbringinghope
thatthedemographicdividendwouldmaterialize.
16.2RegionalDemographics
Pakistan does well amongst its immediate neighbours in terms of basic demographics but the growth
rateofPakistanisthehighestamongthecountriesunderreview.Populationgrowthisskewedtowards
theyoungandayouthbulgehasevolvedovertime.
Table16.3:Demographicsofselectedcountries
Birthsper1,000
Deathsper1,000
Country
population
population
Population
million
Growthrate
(percent)
CHINA
12.2
6.9
1,300
0.49
PAKISTAN
25.1
7.1
177.2
1.51
BANGLADESH
23.8
9.1
158.1
1.27
INDIA
21.3
7.5
1,100
1.38
Source:USCensusBureauInternationalDatabase,2010
237
16.3Dem
mographicDivvidend
Thedemo
ographicdivid
dendisariseeintherate ofeconomicc
growth due to a risin
ng share of working
w
age people in a
populatio
on. The popu
ulation bulge enters and stays in the
working age
a group, an
nd the rate of
o growth of the workingg
age popu
ulation surpasses that of total populaation, with a
consequeent increase in
i the workin
ng age ratio.. This occurs
whentheefertilityrate
efallsandtheeyouthdepeendencyrate
declines. During this demographic
d
opportunityy, output perr
capita rises. This occurs
o
in th
he last stages of the
phic transitio
on, a situation about to
o happen in
demograp
Pakistan,whenfertilityyisinthepro
ocessoffallingtowardsits
finalreplaacementlevel.
The life cycle
c
consum
mption modell suggests that different age groups in
i a populatiion have diffferent
economicc implicationss. The youngg need invesstment in heealth and education, adu
ults supply laabour,
incomean
ndsavingsan
ndatoldagessthereisan
needforretireementincom
meand,again,,arequiremeentto
investinh
health.Asthe
erelativesizeeofeachofth
heseagegrou
upschangein
nthepopulation,therespeective
impact off the econom
mic behaviour associated with differen
nt ages also changes. Thus a larger laabour
force is good
g
for the economy prrovided it is put to use. It has been argued that the demogrraphic
dividend played a role
e in the "eco
onomic miraccle" of the Eaast Asian Tigeers, and even
n in the econ
nomic
boom in Ireland in th
he 1990s. Ass the proporrtion of workkers rises or falls, so do opportunitiees for
economicc growth. This is a time sp
pecific windo
ow of opporttunity, and is not going to
o last foreverr. The
adult producers turrn into depeendants as time passes. Crude deatth rate (CDR) will continue to
b
increasing again after year 20
045. This increase would be due to the changingg age
decline before
structureofthepopulaation,whichw
wouldthenh
haveabiggerproportionofelderlypopu
ulation.
h rate and th
he growth raate of the economically
e
Combining the populaation growth
active population
deliversstrikingresults.Whilepopulationgrowtthhasalargeeandstatisticallysignificaantnegativeeeffect
nteractedbyaastatistically significantpositiveeffecttfrom
onpercapitaincomeggrowth,thiseeffectiscoun
n the share of
o the populaation that is economically active. Witth the percen
ntage share of 52
growth in
percentin
nthelate80sstoearly90ss,theproporttionofworkingagepopulation(1564
4years)inPakkistan
has reach
hed almost 59
9 percent in 2006. The sh
hare of workking age popu
ulation will peak
p
in 2045 to 68
percent before
b
startin
ng to decline again, the reeason being the
t growing share of oldeer age population.
Theappro
oximatelythrreepercentoldagepopulaationsharew
wouldincreaseetoalmost1
10percentbyy2050
in Pakistaan, according to the mediium variant scenario
s
of th
he United Naations (2005). The share of
o the
youngageeinthetotalpopulationw
withdecreasin
ngfertility,w
willshowadeecliningtrend.Fromthecu
urrent
38percen
nt,theyounggpopulation isexpectedttocompriseo
only23perceentofthecountryspopulation
by2050. Lookingatth
helowandh
highvariants itisbelieved
dthat18and27percent ofthepopulation,
respectiveely,wouldco
ompriseyoungpeopleby 2050.These trendsinferttilityandmortalityratesiinthe
country indicate an in
ncreasing meedian age of the populattion. From a median age of 20 years, it is
projectedtoincreasettoanadult33
3yearsby205
50(mediumvvariant).
The mediian age of th
he population
n in Pakistan started to increase in th
he 1990s and
d, with decreeasing
fertilityleevel,thetrend
dwillcontinu
ueinfuture.Iffthedemogrraphictransitiionfollowsaslowerpathinthe
country,tthemedianaggewouldbearound29yeearsby2050,comparedto
o38yearsiftthefertilitydeecline
is more rapid.
r
By 20
050 Crude birth rate (CB
BR) is expected to almosst half, at 16
6 births per 1000
populatio
on.
238
Pakistanisalsoexperiencingadwindlingdependencyratio.Reduceddependencyratiosmeanthatthe
proportionofthepopulationinworkingages(1564)continuestoincreasewhilethoseintheyounger
ages (014) decrease. The proportion of the elderly in the total population is projected to show a
substantial increase after 2025. The decline in dependency ratio can affect per capita output through
severalintermediatechannels.First,thenumberofproducerssurpassestheconsumerssecondlysavings
increase which can make capital more available and thus relatively cheaper. It facilitates increased
savings and investment, at both micro and macro levels. At the micro level, parents with fewer
dependentchildren can morereadily affordproductiveinvestments,andat themacrolevelresources
otherwise needed to support an increasing population can be put to directly productive investments.
Countriescanmovefrombeingheavilydependentonexternalfinancetoapositionofrelativefinancial
selfsufficiency.
A second channel is through improving the quality of human capital. Education affects mortality and
fertilityrates.Notonlythepopulationsizebuttheagecompositionisalsoalteredbyeducation.While
currentpopulationandreproductivehealthpoliciesonlyfocusonthegapbetweentheactualandthe
desiredfamilysize,femaleeducationcanfosterastrictlyvoluntaryfertilitydecline.TheTFRisexpected
to continue to fall, reaching a near replacement level by 2050, according to the medium variant
projections[UN(2005)].
The above discourse boils down to one point: capitalizing on the demographic dividend demands
focusedpolicy.Flexiblelabourmarkets,anopeneconomy,provisionofwelfareandpolicyforthefuture
ageingpopulation,areessentialrequirementsforthedemographicdividendtomaterialize.
Source:UScensusbureauInternationalDatabase
239
The expansive type population pyramid shown above depicts a greater preponderance of young than
old in Pakistans population. The youth bulge has been described by some as a situation in which 20
percentormoreofapopulationisintheagegroup15to24years.Itistheresultofatransitionfrom
hightolowfertilityabout15yearsearlier.Theyouthbulgeconsistsoflargenumbersofadolescentsand
young adults who were born when fertility was high followed by declining numbers of children born
afterfertilitydeclined.
16.4AgeCompositionofPopulation
Impactofchangingagecompositionshasalreadyoccurredbecauseofthegradualfertilitydeclinethat
hasbeenunderwayinPakistansincethelate1980sandearly1990s.Awayoflookingatthechangesin
agestructureistoexaminedependencyratios,i.e.,theratioofpersonsunder15andover64topersons
between15and64.Thisratioisanindicationofhowmuchoftheyoungpopulationisincreasingand
thatofoldisdecreasing.Thedependencyratiohasalreadydecreasedfrom0.86to0.75inthefifteen
yearssincefertilitybegantodeclinein1990.Theratiowillcontinuetodeclineforseveralmoreyearsto
beyond2030,mainlybecauseofthereductionsintheproportionsofthepopulationattheyoungages
of 014, and a continuing increase in the working age population. Age is the foremost criteria of
harnessingthepotentialofeconomicgrowththroughthelabourforceparticipation.
Table16.4:PopulationbyAgeGroups;Pakistan
Projection(000s)
AGEGROUP
2005
2010
2015
2020
2025
2030
TOTALM+F
155,772
173,383
192,262
211,397
229,377
246,272
MALES
04
9,562
11,886
12,429
12,711
12,350
12,062
59
10,047
9,287
11,631
12,205
12,513
12,180
1014
10,130
9,936
9,210
11,554
12,133
12,446
1519
9,897
10,047
9,878
9,161
11,503
12,084
2024
7,885
9,767
9,958
9,801
9,089
11,428
2529
6,240
7,729
9,655
9,859
9,706
9,001
3034
5,077
6,099
7,627
9,555
9,763
9,617
3539
4,460
4,957
6,008
7,536
9,459
9,673
4044
4,042
4,349
4,869
5,919
7,440
9,354
4549
3,465
3,926
4,249
4,770
5,812
7,320
5054
2,796
3,331
3,795
4,120
4,637
5,664
5559
2,035
2,633
3,155
3,609
3,932
4,440
6064
1,543
1,854
2,416
2,911
3,346
3,662
6569
1,199
1,341
1,625
2,133
2,587
2,992
7074
841
973
1,100
1,346
1,782
2,179
75+
921
1,077
1,271
1,482
1,796
2,315
TOTAL
80,140
89,190
98,874
108,670
117,849
126,417
Source: WorldBank'sWorldDevelopmentIndicators(WDI)database
16.5PopulationProjections
Below are the population projections for Pakistan through to 2030. The term Medium variant means
thatifthepopulationincreasegoesatabalancedpacethisscenariowouldunfold,Highandlowvariant
meanifthe changeoccursatahighfertilityoralowfertility pace.Constant fertilityvariant describes
stablefertilitychange.
240
Table16.5:PakistanPopulation20102030
(Thousand)
Constant
Medium
High
Low
Year
fertility
variant
variant
variant
variant
2010
184753
184753
184753
184753
2015
205504
207325
203683
207918
2020
226187
231276
221098
234354
2025
246286
255820
236751
263398
2030
265690
280054
251345
294812
Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat,
WorldPopulationProspects:The2008Revision
Agethatdividesthepopulationintwopartsofequalsizeiscalledmedianage,thatis,thereareasmany
personswithagesabovethemedianastherearewithagesbelowthemedianage.
Taking five year period of 201015 and 202530, it is predicted by the United Nations that life
expectancyinPakistanwouldincreasefrom68to71.9.Thepopulationgrowthratewoulddecreaseto
1.52, and total fertility rate to 2.70. The crude birth rate (CBR), crude death rate (CDR) and infant
mortalityrate(IMR)areprojectedunderthisscenariotodeclineto21.4,5.6and42.2respectively.
16.6URBANIZATION
During 19502008, Pakistan's urban population
expanded over sevenfold, while the total
populationincreasedoverfourfold.Dramaticsocial
changes have led to rapid urbanization and the
emergence of megacities. Pakistan is the most
urbanized nation in South Asia with city dwellers
making up 36% of its population, (2008). While the
urbanizationrateis3%(200510).Demographically,
urbanizationisgaugedbothinabsoluteandrelative
terms as growth of cities within a defined area.
According to base case projections, the year 2030
will be a major landmark in Pakistans
demographics. For the first time in its history, the
urban population in Pakistan will constitute 50% of
thetotal.
Table16.6:MEDIANAGE
Pakistan
Medianage(years)
Mediumvariant20102030
Year
Medianage
2010
21.3
2015
22.5
2020
23.7
2025
25.0
2030
26.4
Source:PopulationDivisionoftheDepartmentof
EconomicandSocialAffairsoftheUnitedNations
Secretariat,WorldPopulationProspects:The2008
Revision
Itisbelievedthattherateishighestwhenindustrializationtakesplaceandthegraphshowsthatinthe
formativeyearsofPakistantheratewashighsincetheurbanpopulationhadampleopportunitiesand
thetrendcontinuedevenintheeighties.Theshifttourbanareasisstilltakingplacebutisconsideredto
besmallascomparedtothatinmanyotherpartsoftheworld.
241
Fig4:ProjectionsofpopulationinurbanareasofPak(%)(20152030)
2030
2025
2020
2015
0
10
20
30
40
50
Source:WorldUrbanizationProspects 2009
MostprojectionsareoftheviewthattherateofurbanizationinPakistanwillcontinuetoincrease.This
isduetotheinbuiltmomentumofpasthighgrowthrates.Morethanhalfofthetotalurbanpopulation
of Pakistan (2005) lived in eight urban areas: Karachi, Lahore, Faisalabad, Rawalpindi, Multan,
Hyderabad,GujranwalaandPeshawar.Between2000and2005,thesecitiesgrewattherateofaround
3percentperyear,anditisprojectedthatthisgrowthratewillcontinueforthenextdecade.
Table16.7:PopulationofMajorCitiesofPakistan
CITY
1998census
1981census
CAGR(%)
2010
KARACHI
9,339,023
5,208,132
3.49
13,386,730
LAHORE
5,143,495
2,952,689
3.32
7,214,954
FAISALABAD
2,008,861
1,104,209
3.58
2,912,269
RAWALPINDI
1,409,768
794,834
3.43
2,013,876
MULTAN
1,197,384
732,070
2.93
1,610,180
HYDERABAD
1,166,894
751,529
2.62
1,521,231
GUJRANWALA
1,132,509
600,993
3.79
1,676,357
PESHAWAR
982,816
566,248
3.29
1,386,529
QUETTA
565,137
285,719
4.09
871,643
ISLAMABAD
529,180
204,364
5.7
972,669
Source:PopulationCensusOrganization,EAWing
16.7MegaCities
Mega cities are defined as having a population in excess of 10 million people or a minimum level for
populationdensity(atleast2,000persons/squarekm).Thesemegacitiesarebeingagglomeratedata
highrate.In1950,only29.8percentofpeoplelivedinurbanareaswhereasby2020,anestimated57
percentwillliveincities.
242
Populationisnottheonlydistinguishingfeatureofmegacities;theirindispensablefunctionalityisalso
thecaseinpoint.Megacitiesaretheproductofthedemandsofcurrenteconomicera.Acriticalnumber
of cities are postindustrial production sites for the leading industries of our period, finance and
specializedservices,theyarenationalortransnationalmarketplaceswherefirmsandgovernmentscan
buyfinancialinstrumentsandspecializedservices,theyfunctionascentresforthecoordination,control
andservicingofglobalcapital.
According to Marshall (1890), the geographical concentration of economic activities can result in a
snowball effect, where new entrants tend to agglomerate as they benefit from higher diversity and
greaterspecializationinproductionprocesses.Workersalsobenefitfrombeinginanagglomerationas
theycanexpecthigherwagesandhaveaccesstoalargerchoicesetofemployers.Manynewmarkets
andinvestmentopportunitiesin,forexample,infrastructure,transportation,healthcare,educationand
recreation will unfold. Handled well, urban expansion can be the key to continuing economic success
(McKinsey).
The population of Karachi was about 105,000 inhabitants by the end of the 19th century, with a
cosmopolitanmixofdifferentnationalities.NongovernmentalandinternationalestimatesofKarachi's
populationrunanywherefrom12millionto18million.Thecity'spopulationisgrowingatabout5%per
year (mainly as a result of ruralurban internal migration), including an estimated 45,000 migrant
workers coming to the city every month from different parts of Pakistan while the overall rate of
urbanizationforPakistanis3%.
Table16.8:TOP15MEGACITIESOFTHEWORLDIN2010
RankOrder
City
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Tokyo
Delhi
SaoPaulo
Mumbai(Bombay)
MexicoCity
NewYork
Shanghai
Kolkata(Calcutta)
Dhaka
Karachi
BuenosAires
LosAngles
Beijing
Riodejaneiro
Manila
Population
(millions)
Japan
36.67
India
22.16
Brazil
20.26
India
20.04
Mxico
19.46
UnitedStatesofAmerica
19.43
China
16.58
India
15.55
Bangladesh
14.65
Pakistan
13.12
Argentina
13.07
UnitedStatesofAmerica
12.76
China
12.39
Brazil
11.95
Philippines
11.63
Source:WorldUrbanizationProspects:The2009 Revision.
Country
16.8PakistaniDiaspora
There are approximately 7 million Pakistanis living abroad, remitting close to US$8 billion annually
through formal channels to Pakistan. Worker remittances are the second largest source of foreign
exchangeafterexports.ItisbelievedthateconomicmigrantsconstituteavastmajorityofthePakistani
243
diaspora.
Remittances,whichareusuallysenttoimmediatefamilymemberswhohavestayedbehind,areamong
themostdirectbenefitsfrommigration;theirbenefitsspreadbroadlyintolocaleconomies.Theyalso
serve as foreign exchange earnings for the origin countries of migrants. In 2007, US$ 5,998 million in
remittances were sent to Pakistan. Average remittances per person were US$ 37, compared with the
averageforSouthAsiaofUS$33.
Table16.10:Remittances
Totalremittanceinflows(US$millions)
India
Bangladesh
Pakistan
SriLanka
Nepal
Globalaggregates
SouthAsia
World
35,262
6,562
5,998
2,527
1,734
53,201
370,765
Remittancespercapita(US$)
Luxembourg
SriLanka
Nepal
Bangladesh
Pakistan
India
3,355
131
61
41
37
30
16
SouthAsia
World
33
58
Source:HumanDevelopmentReport2009,UNDP
Most of the worlds 195 million international migrants have moved from one developing country to
anotherorbetweendevelopedcountries.Pakistanhasanemigrationrateof2.2%.Themajorcontinent
ofdestinationformigrantsfromPakistanisAsia,with72.5%ofemigrantslivingthere.
Table16.11:Emigrants
Originofmigrants
Afghanistan
Nepal
Pakistan
Iran
India
Globalaggregates
SouthAsia
World
Emigrationrate(%)
10.6
3.9
2.2
1.3
0.8
1.6
3.0
Majorcontinentofdestinationformigrants
Asia
Asia
Asia
NorthernAmerica
Asia
Asia
Europe
(%)
91.4
95.0
72.5
39.6
72.0
78.0
33.4
Source;HumanDevelopmentReport2009,UNDP
The United States is host to nearly 40 million international migrants more than any other country
thoughasashareoftotalpopulationitisQatarwhichhasthemostmigrantsmorethan4inevery5
peoplearemigrants.InPakistan,thereare3,554thousandmigrantswhichrepresent2.1%ofthetotal
population.
244
Table16.12:Immigrants
Destinationof
migrants
UnitedStates
India
Pakistan
Iran
Bangladesh
Maldives
Globalaggregates
SouthAsia
World
Immigrantstock
(thousands)
39,266.5
5,886.9
3,554.0
2,062.2
1,031.9
3.2
13,847.0
195,245.4
Destinationofmigrants
Qatar
Bhutan
Pakistan
Iran
Nepal
China
Afghanistan
Immigrantsasashareof
population(%)2005
80.5
5.7
2.1
2.9
3.0
0.0
0.4
SouthAsia
0.9
World
3.0
Source;HumanDevelopmentReport2009,UNDP
16.9PolicyInitiatives
KeyInitiatives:
Tocopewiththeevolvingdemographicchallenges,thedraftNationalPopulationPolicy2010seeksto;
x PursuePopulationStabilizationgoalthroughearlycompletionoffertilitytransition.
x Facilitate realization of demographic dividend by linking fertility transition process with skills
promotionandemploymentgenerationpolicies.
x Attainabalancebetweenresourcesandsizeofpopulation.
x Increaseawarenessoftheadverseconsequencesofrapidpopulationgrowthatalllevel.
x Promotesmallfamilynorms.
x Toachievethesegoals,thepolicyaimsatthefollowingkeyobjective.
x ProvideaccessoffamilyplanningandReproductiveHealthServicestotheremotestandpoorest
areasofthecountryby2015.
x Reduceunmetneedforfamilyplanningfrom25to20percentby2015.
x Reducefertilitylevelfrom3.56(2009)to3.1birthsperwomanbytheyear2015.
x Ensurecontraceptivecommoditysecurityforallpublicandprivatesectoroutletsby2015.
x Improvematernalhealthby:
Encouragingbirthspacing(ofmorethan36months),
Reducingincidenceoffirstbirth(inageslessthan18),and
Reducingproportionofmothersgivinglatebirth(agesbeyond34)
x Attainreplacementlevelfertilityi.e.2.1birthsperwomanby2030
x Achieve universal access to safe and quality reproductive health/ family planning services by
2030
x Reduceunmetneedforfamilyplanningfromexisting25to5percentby2030
245
x Achievecontraceptiveprevalenceratefrom30to60percentby2030
16.10LabourForceAndEmployment
Introduction:
Pakistanisthe10thlargestcountryintheworldaccordingtothesizeofthelabourforce.Onthebasisof
aparticipationrateof32.8percent,asperthelatestLabourForceSurvey200809,thelabourforceis
estimated at 53.72 million. Of the total labour force, 50.79 million are employed while 2.93 million
personsareunemployed,resultinginanunemploymentrateof5.5percent.
If we see the unemployment scenario in the past,
then compared to historical trend of 3 percent,
unemployment levels remained around 5 percent
post19931999,butinFY02asharpincreaseof8.27
percent was seen. The rate fell during 200307.
However, reaching a low point of 5.2 percent in
200809 it rose again to 5.6 percent in FY09. There
hasbeenadeclineinunemploymentratesince2003
04 accompanied by a substantial rise in the unpaid
familyhelpersparticularlyfemales.
SIZEOFLABOURFORCE
RANK
COUNTRY
1
CHINA
2
INDIA
8
BANGLADESH
10
PAKISTAN
33
NEPAL
56
SRILANKA
LABOURFORCE
(million)
812.7
46.7
72.5
55.8
18
8.1
Source:CIAFactbook
Economicgrowthcontributestorealwageincrease,povertyalleviationandreductioninunemployment
rate. In the labour market the forces of supply and demand jointly determine price (in this case the
wagerate)andquantity(inthiscasethenumberofpeopleemployed).Itisinterestingtonotethatthe
triggers to labour demand have been remittances by overseas Pakistanis as well as the structure of
economyasrepresentedbyownershippatternoflandholdingsandcontroloverfinancialassets,bothof
whichhaveimplicationsforemployment.
With the demographic transition taking place in Pakistan, youth unemployment takes centre stage.
Youthshouldbeabsorbedproductivelywellbeforetheperiodwhenoldagedependencythreatensthis
potential. Consider that the labour force is growing every year but the opportunities for employment
aredecliningandthattooatafastrate.Thegoodnewsthoughisthatyouthunemploymentisbelow
theglobalaverageinourcountry.
Trendsinagespecificunemploymentratesdifferconsiderablyformalesandfemalesinthelabourforce.
Male unemployment has increased in the last two decades whereas female unemployment has
decreased. The gap between the projected female working age population and the projected labour
force is likely to increase sharply over time. The reduction in this gap is desired. Although
unemployment among females has historically been higher than among males, the gender gap has
narrowedconsiderablyovertime.
16.11KeyIndicators
In 200809, the estimated labour force grew by 3.7%. The growth in female labour force was greater
thanmalelabourforceandconsequentlytheincreaseinfemaleemploymentwasgreater.Employment
comprisesallpersonsten yearsofageandabovewhoworkedatleastonehourduring thereference
periodandwereeitherpaidemployedorselfemployed.Thelabourforceisgrowingandthegrowth
inFY09isgreaterthanthatinFY08.
246
Fig-3: Labor force, Employed & Unemployed

(2003-09)
Indicators
60
LabourForce(Inmillions)
Labor force
Employed
Unemployed
200708
200809
Total
51.78
53.72
Male
40.82
41.91
Female
10.96
11.81
million
50
40
30
20
10
Source:LabourForceSurvey200809
0
2003-04 2005-06 2006-07 2007-08 2008-09
Source: Variousissuesoflabourforcesurveys,FBS
Unemploymentrateishigherascomparedtothelaststatistics.Thechangeisduetofemalethanmale
andurbanthanruralunemploymentrates.
Table16.13:CivilianLabourForce,EmployedandUnemployedforPakistan
(inmillions)
0304
0506
0607
0708
0809
LabourForce
45.50
50.05
50.33
51.78
53.72
Employed
42.00
46.95
47.65
49.09
50.79
Unemployed
3.50
3.10
2.68
2.69
2.93
Source:VariousissuesofLabour ForceSurveyFederalBureauofStatistics
16.12LabourForceParticipationRates
Labourforceparticipationrateisdividedintotwocategoriesi.ecrudeandrefined.Crudeactivityrateis
the currently active population expressed as percentage of the total population in Pakistan. Refined
activityrateisthecurrentlyactivepopulationexpressedasapercentageofthepopulation10yearsand
above.Thisrateenablesinternationalcomparisonbyfactoringintheeffectofagecomposition.Justas
crudeactivityrate,therefinedparticipationratealsohadnomajorchangeconsideringtheincreasein
totalpopulation
Table16.14:EmploymentTrendandChangesfrom199697and200809(million)
Pakistan
Rural
Urban
Year
Employed
Change
Employed
Change
Employed
Change
199900
36.32
2.19
25.55
1.68
10.77
0.01
200102
38.88
2.56
26.66
1.11
12.22
1.45
200304
42.00
3.12
28.81
2.15
13.19
0.97
200506
46.95
4.95
32.49
3.68
14.46
1.27
200607
47.65
0.70
33.11
0.62
14.54
0.08
200708
49.09
1.44
34.48
1.37
14.61
0.07
200809
50.79
1.70
35.54
1.06
15.25
0.64
Augmented activity rate is based on probing questions from the persons not included in the
conventionalmeasureoflabourforce,tonetinmarginaleconomicactivitieslikesubsistenceagriculture,
247
ownconstructionofonesdwellings.Participationratesuggestsfractionalimprovementacrossareaand
gender.However,improvementismoreaccordingtoareai.einurbanthaninruralareasandbygender
i.einfemalesratherthaninmales.
Indicators
200708
200809
CrudeActivity(Participation)Rates(%)
Pakistan
Total
32.2
32.8
Male
49.3
49.6
Female
14.0
14.9
Augmented
Total
38.2
38.8
Female
26.3
27.0
Rural
Total
33.8
34.3
Male
49.1
49.2
Female
17.9
18.5
Augmented
Total
42.3
42.7
Female
35.1
35.6
Urban
Total
28.9
29.9
Male
49.9
50.4
Female
6.2
7.6
Augmented
Total
30.0
31.0
Female
8.6
9.9
Indicators
200708
200809
RefinedActivity(Participation)Rates(%)
Pakistan
Total
45.2
45.7
Male
69.5
69.3
Female
19.6
20.7
Augmented
Total
53.6
53.9
Female
36.7
37.5
Rural
Total
48.8
49.2
Male
71.2
71.0
Female
25.6
26.4
Augmented
Total
61.0
61.2
Female
50.2
50.7
Urban
Total
38.6
39.3
Male
66.6
66.3
Female
8.4
10.1
Augmented
Total
40.1
40.8
Female
11.5
13.1
Population growth and incidentally working age population growth occurred, due to demographic
transition, according to which there appears to be a youth bulge and Pakistan has a considerable
numberofthepopulationwhichisnotdependant.Pakistanhasthecapacitybutisthereassimilation?
Table16.15:Population,LabourForceandLabour ForceParticipation(LFP)Rates
Population(million)
Labour Force(million)
LFPRate(percent)
Year
Total
Workingage*
Total
Increase
Crude
Refined
199798
130.58
88.52
38.20
1.90
29.3
43.3
199900
136.01
92.05
39.40
1.20
29.4
42.8
200102
145.80
99.60
42.39
2.99
29.6
43.3
200304
148.72
103.40
45.23
2.84
30.4
43.7
200506
155.37
108.79
50.05
4.82
32.2
46.0
200607
158.17
111.39
50.33
0.28
31.8
45.2
200708
160.97
114.64
51.78
1.45
32.2
45.2
200809
163.76
116.63
52.68
0.90
32.8
45.7
*Population10yearsandaboveisconsideredasworkingagepopulation.
16.13EmploymentbyStatus
Employmentbystatusindicatesthepositiononeoccupiesintheworkforce.StatusinEmploymentrefers
248
to the type of explicit or implicit contract of employment of the person with other persons or
organization.Statusofaneconomicallyactiveindividualiswithrespecttohisemployment.Thereisless
changeinstatusduetothefactthatinPakistanthereisalargeinformalsector.
Table16.16:EmploymentStatusbyRegion
Total
Employers
0.46
Selfemployed
16.77
UnpaidfamilyHelpers
14.20
Employees
17.66
Total
49.09
(Millions)
200708
Urban
0.34
4.51
1.72
8.04
14.61
200809*
Rural
Total
Urban
Rural
0.12
0.47
0.34
0.13
12.26
17.06
4.59
12.47
12.48
14.45
1.75
12.70
9.62
17.96
8.18
9.78
34.48
49.94
14.86
35.08
Source:FederalbureauofStatistics*Estimated
Employmentcategoriesaredefinedandtheirchangeduringtheyearisasfollows:
Employeeisapersonwhoworksforapublicorprivateemployerandreceivesremunerationinwages,
salary, commission, tips, pay in kind. Employees are divided into: Regular paid employees with fixed
wage,Casualpaidemployee,Paidworkerbyworkperformed,Paidnonfamilyapprentice.Overtheyear
200809employeesincreasedbothinruralandurbansettings.
Employer is a person working during the reference period, on ownaccount or with one or a few
partners at a selfemployment job with one or more employees engaged on a continuous basis.
Employersalmostremainedthesameduring200708and200809.
Selfemployment job is a job where the remuneration is directly dependent upon the profits, or the
potentialprofits,derivedfromthegoodsandservicesproduced.Selfemploymentincreasedin200809.
Thisreiteratesthefactthatinformalizationofoursectorsistakingplace.
Unpaidfamilyworkerisapersonwhoworkswithoutpayincashorinkindonandenterpriseoperated
byamemberofhis/herhouseholdorotherrelatedpersons.Thiscategoryalsoincreasedshowingthat
thisportionoftheworkforceisjustliketheunemployedonlyworseoff.
Theincreaseinselfemployedpersonsaswellasunpaidfamilyworkersindicatesthatactivitiesatthe
household level are increasing. Employment status shows marginal changes i.e decrease in the
comparativeprofilesofemployeesandselfemployedworkerswhileincreaseinthecaseofemployers.
In the Table 16.17 can be observed that the selfemployed males have decreased while female self
employmenthasincreased.
Table16.17:EmploymentStatusbySex
Total
Employers
0.9
Selfemployed
34.2
UnpaidfamilyHelpers
28.9
Employees
36.0
Total
100.0
200708
Male
1.2
39.6
19.7
39.5
100.0
Female
NA
12.8
65.0
22.2
100.0
(%)
200809
Total
Male
Female
1.2
1.5
0.1
33.3
38.7
13.1
29.7
20.2
65.0
35.8
39.6
21.8
100.0
100.0
100.0
249
16.14Em
mploymentbyySectors
Fig4
4:EmployedLab
borforcebySecctors(%)
Agriculturre was and still

s is the largest sector of
o the
economy but as pop
pulation distrribution is on
n the
verge of change and
d 50% of th
he people will be
residing in
i urban are
eas emphasiss is going to shift
towardso
othersectors..
Considering Table 16.18, the increease in agricu
ulture
and relatted activitiess is evident while for other
sectors the
t
figures are close to each other.
o
Constructtion shows some
s
increase while services
showdecline
Table16.18
8:EmployedLaabourForcebySectors(%)
200708
Sector
Total
Male
Agriculturee
44.6
36.9
Manufacturing
13.0
13.3
Constructio
on
6.3
7.8
Transport
5.5
6.8
Services
13.7
14.4
Others
2.3
2.9
Total
100.00
100.00
5.2
0.1
13.66
45.1
6.6
13
A
Agriculture
Maanufacturing
C
Construction
Traansport
S
Services
Oth
hers
Sou
urce:LabourForce Survey
200809
2
20080
09
Female
Total
Male
e
Fem
male
75.0
45.1
37.3
74.0
0
11.8
13.0
13.3
11.9
9
0.4
6.6
8.3
0.4
4
0.2
5.2
6.6
0.2
2
10.6
13.66
11.1
11.6
6
0.2
0.10
2.9
0.3
3
100.00
100.00
100.00
0
100.0
00
200809Federa
alBureauofSta
atistics
mploymentbyyProvince
16.15Em
Thefollow
wingtablegivvesacomparrisonbetween
nFY08andFYY09interms ofareaandp
province.Itcanbe
seenthatemployedin
ndividualsinccreasedinnumberandsodidpopulation.Itshouldbebornein mind
thatthisisinnowaycconnectedwitthunemploym
mentratewh
hichincreased
dduringthep
periodsinceiitisin
percentaggetermsandemployedto
otalisinmilliions.Unemplloymentrateistheunemployedpopulation
expressed
dasapercenttageofthecu
urrentlyactivepopulation.
OnecangglanceatTab
bleno16.19aandseethatttheemployed
dtotalisonttherise,beittaccordingto
oarea
orsex.Bu
utthechange
eismorepronouncedinruralthanurb
banareaand owesmorettomalesinPunjab
andSindh
hwhileequivvalentlytobo
othgendersinKhyberPukkhtoonkhuaaandBalochisttan.Thechan
ngein
employed
dpersonsisgreatestinPun
njabthenSindh,KhyberP
PukhtookhuaandtheleasttinBalochistaan.
Table16.19
9:EmployedPakistanandPro
ovinces
(m
million)
EM
MPLOYED
AREA/PROVINCE
Pakistan
Rural
Urban
Punjab
Sindh
KhyberPukkhtoonkhua
Balochistan
n
To
otal
49
9.09
34
4.48
14
4.61
28
8.97
12
2.26
5
5.73
2
2.13
200708
Male
39.0
06
25.7
79
13.2
27
22.0
07
10.4
43
4.6
65
1.91
Female
e
10.03
8.69
1.34
6.9
1.83
1.08
0.22
200809
Total
Male
Female
50.79
40.04
10.75
35.54
26.46
9.09
15.25
13.59
1.66
29.95
22.68
7.27
12.72
10.67
2.05
5.97
4.77
1.2
2.15
1.92
0.23
Source:LabourForceSurveyy200809
250
16.16FORMALANDINFORMALSECTORS
During the past years it is observed that there has been a large amount of informalization in the
agriculture sector. There has been a trend of selfcultivation and a decline in share tenancy.
Informalizationisnotjustrestrictedtoagriculture,itisontheriseinnonagriculturesectorsaswell.The
shareofformalsectoremploymentshrunkfrom35percentto27percentincaseofmalesandfrom33
percent to 27 percent in case of females from 20002008. Trade and services in urban small scale
manufacturing areas attracted the labour market and enhanced informalization of the urban labour
market.
Table16.20supportsthefindingsthatinformalizationisrisingandthatitismorepronouncedinrural
thanurbanareas.Sametrendfollowsaccordingtogender,malesareshiftingfromtheformalsectorso
arefemales.
Table16.20:FormalandInformalSectorsDistributionofnonAgricultureworkers(%)
Sector
200708
200809
Total
Male
Female
Total
Male
Female
Total
100.0
100.0
100.0
100.0
100.0
100.0
Formal
27.2
27.2
27.4
26.7
26.6
27.6
Informal
72.8
72.8
72.6
73.3
73.4
72.4
Rural
100.0
100.0
100.0
100.0
100.0
100.0
Formal
24.9
25.1
23.2
23.8
24.0
22.2
Informal
75.1
74.9
76.8
76.2
76.0
77.8
Urban
100.0
100.0
100.0
100.0
100.0
100.0
Formal
29.5
29.2
32.5
29.4
29.1
32.8
Informal
70.5
70.8
67.5
70.6
70.9
67.2
Source:Labour ForceSurvey200809FederalBureauofStatistics
16.17Unemployment
The global economic turmoil has created
unemployment around the world and in Pakistan
2.93 million of the work force is unemployed.
Mismatch in job and skills as well as the temporary
natureofmostjobsisproblematic.Certainsegments
ofthelabourmarketdonotgivesecureemployment.
There has been a positive increase of employed
labour force in both urban and rural settings;
however it should be borne in mind that the
populationincreasehasbeentremendoustoo.
Table16.21:AgeSpecificUnemploymentRate(%)
Total
AgeGroup
200708
200809
1014
9.0
9.3
1519
8.7
9.5
2024
6.8
7.3
2529
4.1
4.3
3034
2.3
2.6
3539
1.5
1.7
4044
1.6
1.5
4549
2.5
2.4
5054
3.7
4.6
5559
6.6
6.1
60yrs&above
12.5
12.7
Source:LabourForceSurvey,200809,
FederalBureauofStatistics
Unemployment rate is the unemployed population

expressed as a percentage of the currently active
population. while Currently Active Population
comprises all persons ten years of age and above
who fulfill the requirements for including among employed or unemployed during or unemployed
duringthereferenceperiodi.eoneweekprecedingthedateofinterview.Unemploymentratehasbeen
decreasingovertheyears.Theproportionofunemployedtothecurrentlyactivepopulationhasbeen
251
decreasingwiththeexceptionof200102whenitincreased.Usuallyitisseenthatunemployedlabour
force decreased during the last decade with the exception of a few years. A slight shift in the norm
occurredin200809whenunemployedlabourforceincreased.
Unemploymentrategoesdownwithage,itisobservedthatmostparticipationinthelabourforceisin
age group 2050. This table confirms the finding that unemployment rate goes down with age and
participationincreases(unlesstheageisabove50).
In200506,theunemployedlabourforceinyouth(1525years)was1.2million,whichwas0.4million
lowerthanthestockin200102.Ifthecurrentlevelofunemploymentprevailsforthenext20years,the
stockofyouthunemployedin2030willbearound6million.
Inreadingtable16.22wehavetomakeroomofthefactthatmostofthelabourforceisemployedin
theruralareasthustheunemploymentfiguresaretobeseenasafractionofthewhole.Unemployed
labour force is almost the same in both areas but unemployment rate is higher in urban areas. The
differenceisquitelarge.
Table16.22:UnemployedLabourForcebyArea
Years
UnemployedLabour Force(Inmillions)
UnemploymentRate(%)
Total
Rural
Urban
Total
Rural
Urban
199900
3.0
1.9
1.1
7.8
6.9
9.9
200102
3.4
2.1
1.3
8.2
7.5
9.8
200304
3.5
2.0
1.4
7.6
6.7
9.7
200506
3.1
1.8
1.2
6.2
5.3
8.0
200607
2.6
1.6
1.0
5.3
4.7
6.6
200708
2.6
1.7
0.9
5.2
4.7
8.3
200809
2.9
1.7
1.1
5.5
4.7
7.1
Source:VariousissuesofLabour ForceSurveyFederalBureauofStatistics,
16.18PolicyInitiatives
a)EmploymentPromotionPolicies
The policy focus of government is on creation of decent employment, and human resource
development.Theimportanceofthefactcanbegaugedbytheinitiativestakenbythegovernmentsuch
as National internship Program, Presidents Rozgar Program; credit is being provided for self
employmentbyNationalBankofPakistan(NBP),enhancementofresidentialfacilitiesbyconstructionof
one million housing units, doubling of lady health workers to cover Kachi Abadis, raising of minimum
wage and pension of workers, restoration of Trade Unions. These steps are helpful in employment
generationandhumanresourcedevelopment.Thespecificpoliciesareasfollows:
b)AcceleratingInvestment&EconomicGrowth
Economicgrowthhasdirectimplicationsforemployment.Productivityfosterscapitalintensiveactivities
thuscausinglayoffintheshortrunbutinthelongrunduetoproductdiversificationandgreateroutput
itcausesjobincrease.Thusgovernmentspriorityistotakethegrowthratetoanoptimumlevelforjob
creation.Thereisadistinctionbetweenlowqualityjobscontributingtotheincreaseinthenumberof
workingpoorandqualityjobssoemphasisisalsoonthisaspectofthelabourforce.
252
c)MinimumWage
Thegovernmenthasrecentlyannouncedaraiseof16%intheminimumwages.Thedegreetowhichthis
increasegeneratesanacceptablelivingstandardforwageearnershastobeassessedandtheextentto
whichithassharedthegrowthinGDPisalsotobegauged;itisatasktobeaccomplishedinfuturewage
legislation. Furthermore, the minimum wage fixation will be subjected to a tripartite deliberation
processatregularintervalstoprotectthelivingstandardsoftheworkersandwiderdispersalofgrowth
benefits.Implementationlapseswillbefocuseduponthroughstreamliningtheinspectionsystem.
d)InvestinginIncreasingWaterResources
AgricultureisthelargestsectorofPakistanseconomyemployingnearly45.1percentofthecountrys
workforcein200809.Morethantwothirdsofthecountyspopulationlivesinruralareasanddepends
directlyorindirectlyonagriculturefortheirlivelihood.ThemajorconstraintinPakistansagriculturehas
beenthelackofavailabilityofsufficientirrigationwater.
e)CreditFacilityThroughSMEBank
SME Bank was established to provide financial assistance and business support to small and medium
enterprises.Upto31stDecember,2009SMEBankhasfinanced8,299SMEs,disbursedloansamounting
toRs.9,510millionto40,891beneficiariesinthecountry.
f)MicroCreditFacilitiesThroughKhushaliBank
TheKhushaliBankwasestablishedtoprovideloansuptoRs.30,000/eachtounemployedpeopletoset
uptheirownbusiness.Upto31stDecember,2009,theKhushhaliBank(KBL)disbursedloansamounting
toRs.22,481millionto2,038,004beneficiaries.
g)PresidentsRozgarSchemeByNationalBankOfPakistan(NBP)
NationalBankofPakistanhasdevelopedafullrangeofproductsunderthepresidentsRozgarScheme
withabrandnameofNBPKAROBAR.Underthisscheme,aloanuptosizeofRs.100,000/isgivenfor
amaximumperiodoffiveyearswithagraceperiodofthreemonthsforestablishingthebusiness.
h)PakistanSkillingProgramme
NationalVocationalandTechnicalEducationCommission(NAVTEC)hasbeenestablishedwithaviewto
overcoming lack of standardization, skill gaps, non availability of proper curricula. Poor quality of
instructionalstaff,inadequateaccreditation/certification,poorinfrastructureandtoencourageprivate
sector to enhance technical education and vocational training capacity and to bring harmony and
develop linkage between technical education and vocational training. Being a regulatory body, this
Commissionwillberesponsibleforlongtermplanninginthisparticularfield.Itwillalsoberesponsible
for setting standards for formulating the syllabus, accreditation, certification and trade testing, etc.
NAVTEC is giving Rs. 2000/ per month to each trainee during the training course. Presently, 1522
technical institutes with an enrollment of 314,188 are working in the country and providing technical
skilltothelabourforce.Itisbeingplannedtoproduceonemillionskilledlabourperyear.
i)SkillDevelopmentCouncils
Inordertodevelopskilledlabourforceonmodernlines,LabourandManpowerDivisionhasestablished
five Skill Development Councils (SDCs) one each at Islamabad, Karachi, Lahore, Peshawar and Quetta.
TheSDCsassessthetrainingneedsoftheirgeographicalareas,prioritizethemonthebasisofmarket
253
demand and facilitate training of workers through training providers in the public and private sector.
TheseCouncilhavemetthediversifiedtrainingneedsoftheindustrialandcommercialsectorsandhave
sofartrained46,674workers.
j)OverseasEmployment
Onefactorthatallowedcountriestoreducepovertyandtoimproveincomedistributiondespiteaweak
growthemploymentlinkageisoverseasemployment,whichhasbeenanimportantfeatureofPakistans
experience. In 2008, for example, the flow of workers abroad was over 400,000. This amounted to
around 28 per cent of the total addition in the size of the domestic workforce between 200607 and
200708. In 2009, the flow of workers abroad reached 600,000 est. which is a major factor in the
increaseinremittances.
AseparateOverseasPakistaniDivisionhasbeenestablishedtofacilitateoverseasworkers.Community
WelfareAttaches(CWAs)havebeendeputedinalltheEmbassiesofPakistan,locatedinmajorlabour
importingcountries,toprotecttherightsofPakistaniworkers.Boostingofoverseasemploymentmay
behelpfulinreducingpressureonjobmarket.
MinistryofLabour,Manpower&OverseasPakistanisismakingeffortstoboostoverseasemployment.
Inthisregard,MoUs/AgreementswithKuwiat,Malaysia,Korea,QatarandUAEhavebeensignedwhile
MoUs/AgreementswithseveralothercountriesareunderProcess.Exportofmanpowerisundertaken
byOverseasEmploymentPromoters(inPrivateSector)andOverseasEmploymentCorporation(inPublic
Sector).MorethansixbillionUSdollarswouldbeearnedduringthenextbudgetyear.Theincreasein
overseas migration is the result of revolutionary steps taken by the Government for the export of
manpower.MoUhasbeensignedwithMalaysiaforrecruitmentofPakistaniworkerssoastoopennew
jobopportunitiesforalargenumberofsemiskilledandunskilledworkers
MoU in the field of manpower has also been signed between Pakistan and Korea. According to MoU,
PakistanwillsenditsworkerstoSouthKoreaonregularbasis.FirstbatchofworkersleftforKoreaon
22nd April, 2008. MoU in the field of manpower has also been signed between Pakistan and the
GovernmentofUnitedArabEmirates(U.A.E).MoUbetweenPakistanandLibyainthefieldofmanpower
exporthasalsobeensignedrecently.
k)InformationTechnology
Information Technology has enormous potential to create jobs for the educated unemployed in the
country.ThedevelopmentofITandTelecomsectorhascreatedenormousemploymentopportunities,
directly or indirectly, for educated unemployed in a wide range of areas like call centres, telecom
engineering telecom sales, customer services, finance and accounting etc. This is one of the fastest
growingsectorsoftheeconomy.TheallocationofRs.3.30billionhasbeenretainedforthissector.This
would further accelerate the activities in the next couple of years, creating more business and
employmentopportunitiesinthecountry.
l)LabourMarketInformationSystemandAnalysis
AProjectLabourMarketInformationSystemandAnalysishasbeenlaunchedintheHRDWingofthe
LabourandManpowerDivision.Theobjectiveoftheprojectistodevelopandconsolidatethecollection
and usage of Labour Market Data in Pakistan. An analysis of data will be made using internationally
recognized Key Indicators for Labour Market (KILMs). The system will yield regular statistics and
informationaboutemployment,underemploymentandunemploymentatnational,localandregional
254
levels.Thecoverageofvulnerablegroupsuchaswomenwillbeensured.Changesinsocioeconomicand
educational characteristics of the employed and unemployed labour force, as well as, the changes in
occupationalandsectoralcompositionoftheemployedwillalsobeanalyzed,enablingthepolicymakers
to suggest policy initiatives for employment generation. Three reports under the project have been
releasedwhichhavebeenappreciatedbyallconcernedatnational,aswellas,internationallevel
m)NationalInternshipProgram
ThefirstphaseofNationalInternshipProgram(NIP)hasbeencompleted.Underthefirstphase,25826
applicantswereofferedinternshipatFederal,ProvincialandDistrictGovernmentlevels.Secondphase
of NIP was launched in February, 2008. A total of 71,915 applications were received. So far 21138
applications have been verified by HEC and NADRA and are being placed in Ministries, Divisions,
DepartmentsandProvincialGovernmentsandatDistrictlevel.FinanceDivisionallocatedanamountof
Rs.1650millionforpaymentofstipendtointerneesduringthefinancialyear200809.
16.19LabourPolicy2010:Salientfeatures
In an effort to apply principles of social Justice in the world of work, the government announced a
LabourPolicyon1stMay2010,withthefollowingrelevantfeatures:
1. Raising of Minimum Wages by 16% from Rs. 6000 of the previous year to Rs. 7000 per month.
Paymentofwagesshouldbemadethroughcheques/banktransfersinallestablishmentsregistered
underanylaw.
2. In order to monitor the implementation of labour laws pertaining to wage payments, working
environment and time, Tripartite Monitoring Committees will be set up at district, province and
federallevel.
3. LabourMarketinformationsystemwillbeestablishedthroughcreationofHumanResourceCentres
atdifferentcities.
4. Contractemployeeswithinpublicsectorwillberegularized.
5. Initiation of a comprehensive social insurance scheme on self registration/voluntary basis for all
workersandselfemployedintheeconomyforoldagebenefits.
6. Establishment of a Board to review the cases of workers dismissed under the Removal from
services(SpecialPower)Ordinance2000.
7. Schools run by Workers Welfare Fund (WWF) are to introduce Matric Technical Scheme for skill
development.
255
ContingentLiabilities
1
Annex
Contingent liabilities are possible future liabilities that will only become certain on the occurrence of
some future event. Contingent liabilities are not shown in the balance sheet, but must be given
adequate disclosure. Contingent liabilities can be both explicit and implicit as discussed in the
frameworkbelow.
ExplicitContingentLiabilities:
Thesearespecificgovernmentobligationsdefinedbya
contractoralaw.Thegovernmentislegallymandated
tosettlesuchanobligationwhenitbecomesdue.
ImplicitContingentLiabilities:
Theserepresentamoralobligationorexpectedburden
forthegovernmentnotinthelegalsense,butbasedon
publicexpectationsandpoliticalpressures.
Guarantees for borrowing and obligations of

provincial governments and public or private
entities.
Umbrella guarantees for various loans (SME loans,
agricultureloans)
Guaranteesfortrade&exchangeraterisks
Guaranteesforprivateinvestments
Stateinsuranceschemes
Defaults of provincial governments and public or
private entities on nonguaranteed debt and other
obligations.
Liabilitycleanupinentitiesbeingprivatized
Bankfailures
Disasterandrelieffinancing
Failureonothernonguaranteedfunds
TheGovernmentissuesguaranteesforpublicsectorborrowerswithrelativelyweakcreditworthiness.In
some cases, such as in the case of Trading Corporation of Pakistan (TCP), the government has 100%
ownership,henceanycreditortotheentityhasfullrecoursetothegovernment.
Thegovernmentmayalsoissueguaranteesaspartof Table1: ContingentLiabilities
acostreductionstrategy,bytakingonrisksitisbest
Issuance
As%of
able to mitigate or absorb. However, there are also FiscalYear
GDP
(Rs.Billions)
costs associated with the provision of government FY07
140.7
1.6
138.8
1.4
guarantees. Hence, such offbalance sheet FY08
FY09
276.3
2.2
transactionscannotbeoverlookedinordertogaina
177.9
1.2
holistic view of a countrys fiscal position and unveil FY10*
thehiddenrisksassociatedwiththeobligationsmade *:July2009April2010
Source:BudgetWing&EFWing,MoF
by the government outside the budget. Similarly,
reported debt levels of a sovereign may be understated owing to the noninclusion of guarantees,
explicitorimplicit,whichmaymaterializeinfuture.InthecaseofPakistan,theseinclude,forinstance,
explicitandimplicitguaranteesissuedtoPublicSectorEnterprises(PSEs)andunfundedlossesofstate
ownedentitiessuchasPakistanSteelMill,PIA,WAPDA,PEPCO,Railways,etc.
TheFiscalResponsibilityandDebtLimitation(FRDL)Act2005stipulatesthattheissuanceofguarantees,
257
including those for Rupee lending, bonds, rates of return, output purchase agreements and all other
claims and commitments that may be prescribed from time to time as well as renewal of existing
guarantees, should not exceed 2.0 percent of the estimated gross domestic product in any financial
year. Since 200506, there has been a steady increase in the issuance of contingent liabilities but the
thresholdof2.0percenthasonlybeenbreachedin200809by0.2percentagepoints.AsofMarch2010,
guaranteesamountingtoRs.177.9billionhavebeengrantedtoPSEs,whichaccountedfor1.2percent
oftheprojectedGDPfor200910.
A further breakdown of institutionwise government guarantees in domestic and foreign currencies
indicatesthatWAPDA/PEPCOhasbeenthebiggestbeneficiaryofthisprovision.
Table2:InstitutionwiseIssuanceofGovernmentGuaranteesinDomesticCurrency
S.No. Organization
FY07
FY08
1
PIA
18.1
4.0
2
HBFC
9.8
3
AWT
6.5
4
WAPDA
29.0
54.9
5
NLC
1.0
6
CAA
4.0
7
PARCO
19.0
8
PSM
7.8
9
KESC
3.0
10
KSEW
3.4
11
PSO
42.0
12
Shell
11.0
13
NationalIndustrialParks
2.0
Dev.&Mgmt.Co.
14
PakTextileCityLimited
0.3
15
PAFShahbazAirHQ
16
NIT
17
TIP
Total
98.3
117.6
AspercentofGDP
1.1
1.1
Memo:
GDP(mp)
8,673
10,243
*July2009April2010
FY09
25.0
(Rs.billion)
FY10*
6.8
218.5
112.3
10.0
3.0
1.0
20.0
264.5
2.1
1.0
6.0
1.1
140.1
1.0
12,739
14,668
WAPDAwasissuedguaranteesamountingtoRs.218.5billionandarolloverofUS$125millioninthe
previousfiscalyear.Intheongoingfiscalyear200910,Rs.112.3billionhasbeenawardedtillApril2010
in respect of public guarantees to PEPCO/WAPDA in addition to US$ 248 million of foreign currency
guarantees.
The outstanding contingent liabilities as of April 30, 2010 stood at Rs. 642.1 billion. This includes the
stockofexplicitdebtguaranteesinbothdomesticandforeigncurrenciesthatappearintheaccounting
booksofPSEs.TheRupeeguaranteesaccountedfor52percentofthetotalstock.Suchahighmagnitude
ofpublicguaranteesmayleadtodistortionsinthedomesticyieldcurve,andhavefiscalconsequences.
258
ContingentLiabilities
Table3:GuaranteesOutstandingasofApril30,2010
OutstandingGuaranteesextendedtoPSEs (total)
642.1
DomesticCurrency(Rs.Billion)
330.7
ForeignCurrency(Rs.Billion)
311.3
MemoItem:
(ForeignCurrencyUS$Million)
3,690.8
Source:DPCO
In addition to these explicit contingent liabilities, the records of which are being maintained at the
Ministry of Finance, there is a need to quantify various implicit guarantees embedded in many
government contracts that represent a potentially significant charge on future budgets. Ideally, the
governmentshouldrestrainfromissuingnewguaranteesinbulkandinstead,advisethePSEstoexplore
alternativesourcesoffunding,i.e.,issuingRealEstateInvestmentTrust(REIT)units,securitization,etc,
inanattempttoimprovetheirsolvencypositions.
Table4:InstitutionwiseIssuanceofGovernmentGuaranteesinForeignCurrency
S.No.
Organization
FY07
FY08
1
PIA
692.0
81.0
2
MINFAL
133.0
3
WAPDA/PEPCO
125.0
4
MinistryofRailways
5
KSEW
7.0
Total
699.0
339.0
AspercentofGDP
0.5
0.2
Memo:
GDP(inbillionsofUS$)
143.0
164.5
*July2009April2010
(US$millions)
FY09
FY10*
25.0
125.0
247.6
203.7
150.0
0.1
451.3
0.3
162.3
173.6
Source:EFWing,MoF
Other than the publically guaranteed debt of PSEs, Finance Division has issued, each year, continuing
guarantees against the commodity financing operations undertaken by TCP, PASSCO, and provincial
governments. Commodity financing is secured against hypothecation of commodities and letter of
comfort from the Finance Division. The quantum of these guarantees depends on the supplydemand
gap of various commodities, their price stabilization objectives, volume procured, and domestic and
internationalprices.Asperpreviouspractice,theseguaranteesarenotincludedinthelimitof2percent
imposedbytheFRDLAct2005.
As of April 2010, the outstanding stock of Rs. 300.6 billion against the endJune 2009 position of Rs.
336.2billionindicatesaretirementofRs.35.6billiononbehalfofcommodityfinancingoperations.The
limitsanctionedbytheFinanceDivisioninrespectofguaranteesforcommodityoperationsforendJune
2010 approximates to Rs. 492 billion. The government intends to introduce world class warehousing
facilitiesinthenearfuturethatwillallowtheentitiesinvolvedinthecommodityoperationstosecure
financing against the warehouse receipt without explicit guarantee or letter of comfort from the
government.
259
TaxExpenditure
Annex
TheFederalBoardofRevenue(FBR)estimatestaxexpendituresfor200910atapproximatelyRs.147.14
billion. Details of estimates of taxwise tax expenditure during the fiscal year 200910 have been
highlightedbelow:
IncomeTax
Section53oftheIncomeTaxOrdinance,2001empowerstheFederalGovernmenttoexemptfromtax
anyincome orclassesofincome,orpersons.Thecostofexemptionsinrespectofdirect taxesduring
200910hasbeenreflectedinTable1:
Table1:IncomeTaxExpenditurefor200910
(Rs.inbillion)
EstimatedRevenueLoss
S.No. TaxExpenditureItems
200809
200910
1.
Pensions&Gratuity
0.0540
0.075
2.
IncomefromFunds,BoardofEducation,Universitiesand
ComputerTrainingInstitutions
0.828
0.950
3.
DonationsandContributionstoCharitableOrganizations
0.517
0.630
4.
IndependentPowerProducers
0.772
0.852
1.050
1.350
0.025
0.050
5.
6.
IncomefromCertainTrust,WelfareandCharitableinstitutions
nonprofitableorganization.
ProfitsonDebt/interestfromgovernmentsecuritiesandcertain
foreigncurrencyaccounts/booksprofitondebtearnedby
certainnonresidentsindividualsandinstitutions
7.
ExportofInformationTechnology
0.602
0.812
8.
Capitalgains
18.760
21.910
9.
OtherSectorandenterprisespecificexemptions
17.897
19.905
Total:
40.505
46.534
SalesTax
KeyexemptionsofSalesTaxareTractors,FertilizerPharmaceuticsetc.ThecostofSalesTaxexemptions
isestimatedtobeRs.27.409billionforthefiscalyear200910.Followingsarethemainexemptionsin
261
SalesTaxandtheircostofexemptionduringinfiscalyear200910[Table2].
Table2:TaxExpenditureofSalesTaxfor200910
S.No.
Sector
1.
2.
3.
4.
Fertilizer
Tractors
Pharmaceuticalproducts
Others
Total:
(Rs.inBillion)
EstimatedRevenueLoss
200809
200910
8.20
8.797
5.7
6.246
3.1
3.754
0.50
8.612
17.5
27.409
Custom
Customs exemptions are mainly given on raw materials and components; plant, machinery and
equipment imported by hightech, priority and value added industries; import for energy sector
projects;andexemptionstoexplorationandproductioncompanies.Someoftheseexemptionsaredue
tointernationalcontractualobligations.Followingisthebreakupofmainexemptionsincustomsduties
forfiscalyear200910[Table3].
Table3:TaxExpenditureofCustomsfor200910
S.No
SRONo.&Date
410(1)/2001,dated18.6.2001
Supersededby1065(1)/2005,
dated20.10.2004then
supersededby492(1)/2009.
456(1)/2004,dated12.6.2004
Supersededby565(1)/2005
dated6.6.2005then
supersededby565(1)/2006,
dated5.6.2006
567(1)/2005,dated6.6.2004
dated5.6.2006
678(1)/2004,dated12.6.2004
570(1)/2005,dated6.6.2005
575(1)/2005,dated6.6.2005
dated5.6.2006
OthersSROs
Total:
Description
Conditionalexemptionof
customsdutyandsalestaxon
temporarilyimportedgoodsfor
subsequentexportation.
Conditionalexemptionof
customsdutyonimportofraw
materialsandcomponentsetc.
formanufactureofcertaingoods
(Surveybased)
Generalandconditional
exemptionofcustomsduty(non
survey)
Exemptionofcustomsdutyand
salestaxtoexplorationand
production(E&P)companieson
importofmachineryequipment
&vehiclesetc.
Concessionofcustoms dutyon
goodsimportedfromSriLanka.
Exemptionfromcustomsduty
andsalestaxonimportof
specifiedmachinery,equipment,
apparatusanditems.
(Rs. inbillion)
EstimateRevenueLoss
200809
200910
2.335
2.525
2.839
3.822
18.121
21.299
4.401
5.117
0.036
0.153
11.189
11.555
22.361
28.726
61.282
73.197
262
TaxExpenditure
AccordingtotheFederalBoardofRevenue(FBR),theconsolidatedsummaryoftaxexpendituresforthe
fiscalyear200910isasshowninTable4.
Table4:TaxExpenditureofFederalTaxfor200910
S.No.
TypeofTax
1.
IncomeTax
2.
SalesTax
3.
CustomsDuties
Total
200809
40.864
17.5
61.282
119.646
(Rs.inBillion)
200910
46.534
27.409
73.197
147.140
263
ECONOMIC AND
INDICATOR
1960's
GROWTH RATE (%) (Constant fc)

GDP
6.8
- Agriculture
5.1
- Manufacturing
9.9
- Commodity Producing Sector
6.8
- Services Sector
6.7
GROWTH RATES (%)(Current MP)
Total Investment
- Fixed Investment
14.8
- Public Investment
14.0
- Private Investment
20.9
As % of Total Investment
- National Savings
- Foreign Savings
As % of GDP (Current MP)
Total Investment
- Fixed Investment
- Public Investment
- Private Investment
National Savings
Foreign Savings
Domestic Savings
GDP DEFLATOR (Growth %)
CONSUMER PRICE INDEX (CPI)
(Growth %)
3.2
FISCAL POLICY *
As % of GDP (MP)
Total Revenue
13.1
- Tax Revenue
- Non-Tax Revenue
Total Expenditure
11.6
- Current Expenditure
Defence
Interest Payment
Others
- Development Expenditure (#)
Overall Deficit
2.1
MONEY & CREDIT (Growth %)
- Monetary Assets (M2)
16.3
- Domestic Assets
15.0
STOCK EXCHANGE (Growth %)
- KSE - 100 Index
- Aggregate Market Capitalization
- : Not available
P : Provisional
# : From 1998-99 onward also includes net lending to PSEs.
1970's
1980's
1990's
Average (Annual)
2000's
1999-00
2000-01
4.8
2.4
5.5
3.9
6.3
6.5
5.4
8.2
6.5
6.7
4.6
4.4
4.8
4.6
4.6
4.8
3.2
7.0
4.2
5.3
3.9
6.1
1.5
3.0
4.8
2.0
-2.2
9.3
0.8
3.1
21.8
20.5
25.3
17.0
4.2
3.7
2.6
5.1
8.1
7.8
7.3
8.8
15.4
15.4
12.5
17.3
10.2
10.5
5.5
14.3
8.6
8.5
11.1
7.2
67.5
32.5
79.2
20.8
75.4
24.6
91.1
9.2
90.8
9.2
95.9
4.1
17.1
15.9
10.3
5.6
11.2
5.8
7.4
-
18.7
17.0
9.2
7.8
14.8
3.9
7.7
2.3
18.3
16.6
7.5
9.1
13.8
4.5
14.0
8.3
19.0
17.4
4.8
12.6
17.0
2.1
15.6
8.7
17.4
16.0
5.6
10.4
15.8
1.6
17.1
2.8
17.2
15.8
5.7
10.2
16.5
0.7
17.8
8.0
12.5
7.2
9.7
7.7
3.6
4.4
16.8
21.5
5.3
17.3
13.8
3.5
24.9
17.6
6.5
3.8
7.3
7.3
7.1
17.1
13.4
3.7
24.1
19.4
5.6
6.8
7.0
4.7
6.9
14.2
10.6
3.7
18.7
15.4
3.2
4.9
6.8
3.5
4.5
13.5
10.7
2.8
18.8
16.5
4.0
6.9
5.6
2.5
5.4
13.3
10.6
2.7
17.4
15.5
3.2
6.0
6.3
2.1
4.3
21.0
20.5
13.2
15.4
16.8
12.2
15.0
14.0
9.4
9.0
9.0
3.7
0.1
2.5
4.1
13.4
27.2
31.2
44.2
36.9
-10.2
-13.4
R : Revised
F : Final
* : Budget Estimates for 2009-10
SOCIAL INDICATORS
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
F
2008-09
R
2009-10
P
3.1
0.1
4.5
1.4
4.8
4.7
4.1
6.9
4.3
5.2
7.5
2.4
14.0
9.2
5.9
9.0
6.5
15.5
9.5
8.5
5.8
6.3
8.7
5.1
6.5
6.8
4.1
8.3
6.6
7.0
3.7
1.0
4.8
1.3
6.0
1.2
4.0
-3.7
0.8
1.6
4.1
2.0
5.2
3.6
4.6
3.2
3.2
-22.2
17.3
10.7
8.2
4.0
9.8
14.4
14.7
19.3
13.1
32.6
34.3
23.7
38.3
36.1
38.0
30.3
40.5
15.7
15.9
30.9
11.5
15.6
15.4
18.6
15.3
6.9
5.5
3.9
5.3
0.7
-0.6
7.2
-3.5
110.7
-11.3
123.1
-22.5
107.8
-7.8
91.6
8.4
82.4
20.4
77.3
22.7
61.5
38.5
70.0
30.0
83.1
16.9
16.8
15.5
4.2
11.3
18.6
-1.9
18.1
2.5
16.9
15.3
4.0
11.3
20.8
-3.8
17.6
4.4
16.6
15.0
4.0
10.9
17.9
-1.3
15.7
7.7
19.1
17.5
4.3
13.1
17.5
1.6
15.4
7.0
22.1
20.5
4.8
15.7
18.2
4.5
16.3
10.5
22.5
20.9
5.6
15.4
17.4
5.1
15.6
7.7
22.1
20.5
5.4
15.0
13.6
8.5
11.6
16.2
19.0
17.4
4.6
12.7
13.3
5.7
10.6
20.3
16.6
15.0
4.3
10.7
13.8
2.8
9.9
10.1
3.5
3.1
4.6
9.3
7.9
7.8
12.0
20.8
11.5
14.2
10.9
3.3
18.3
15.9
3.4
6.2
6.3
2.8
4.3
14.9
11.5
3.4
18.5
16.3
3.3
4.8
8.2
2.2
3.7
14.3
11.0
3.3
16.7
13.5
3.3
4.0
6.2
3.1
2.4
13.8
10.1
3.7
17.2
13.3
3.3
3.4
6.6
3.9
3.3
14.2
10.6
3.6
18.5
13.6
3.2
3.4
7.0
4.8
4.3
14.9
10.2
4.7
19.1
14.9
2.8
4.4
7.7
4.9
4.3
14.6
10.6
4.4
22.2
18.1
2.7
5.1
10.6
4.4
7.6
14.5
9.5
5.1
19.9
16.0
2.6
5.2
3.8
3.8
5.2
14.7
10.9
4.0
19.6
15.4
2.3
4.5
5.0
4.1
4.9
15.4
2.2
18.0
0.5
19.6
23.7
19.3
22.4
15.2
15.8
19.3
14.2
15.3
33.6
9.6
14.9
5.5
5.1
29.5
20.2
92.2
83.1
55.2
81.9
41.1
48.3
34.0
37.4
37.8
43.9
-10.7
17.0
-41.3
-43.0
38.6
32.8
(Contd.)
ECONOMIC AND
1960's
INDICATOR
BALANCE OF PAYMENTS (Growth %)

- Exports (fob)
- Imports (fob)
- Trade Deficit
- Private Transfers (net)
- Workers Remittances
- Current Account Deficit
As % of GDP (MP)
- Exports(fob)
- Imports(fob)
- Trade Deficit
- Current Account Deficit
COMMODITY SECTORS
Agriculture
Total Cropped Area
Mln. Hectares
Wheat Production
Mln. Tonnes
Rice
"
"
Sugarcane "
"
Cotton
"
Mln. Bales
Fertilizer Offtake
Mln.N/Tonnes
Credit Disbursed
Bln. Rs
Manufacturing
Cotton Yarn
Mln. Kg.
5.6
Cotton Cloth
Mln.Sq.Mtr.
3.1
Fertilizer
Mln. Tonnes
27.5
Sugar
"
34.3
Cement
"
10.7
Soda Ash
000 Tonnes
12.0
Caustic Soda
000 Tonnes
24.4
Cigarettes
Bln.Nos.
10.7
Jute Goods
000 Tonnes
INFRASTRUCTURE
Energy
Crude Oil Extraction Mln. Barrels
Gas (supply)
Mcf
Electricity (Installed 000 MW
Capacity)
Transport & Communications
Roads
000 Km
70.5
Motor Vehicles on RoadMln.Nos.
Post Offices
000 Nos.
7.1
Telephones
Mln.Nos.
0.1
Mobile Phones
Mln.Nos.
- : Not available
P : Provisional
1970's
1980's
Average (Annual)
1990's
2000's
1999-00
13.5
16.6
20.5
-
8.5
4.5
0.9
2.3
1.9
21.2
5.6
3.2
-0.6
5.9
-5.3
12.2
9.9
13.7
60.0
17.9
26.8
-3.4
8.8
-0.1
-32.3
34.7
-7.2
-52.9
9.8
18.7
8.9
3.9
13.0
17.4
4.4
4.5
12.4
16.4
4.0
3.9
11.2
13.1
1.9
1.6
20.3
12.5
3.3
33.1
6.3
1.4
11.2
22.4
17.0
3.9
44.6
9.7
2.3
23.8
22.9
20.8
5.2
50.5
11.6
3.3
113.9
22.7
21.1
5.2
46.3
11.2
2.8
39.7
3.4
-5.2
13.2
2.2
2.5
2.6
5.0
4.9
3.4
10.0
-1.1
10.7
14.4
8.6
6.7
6.6
-0.4
9.5
1884.4
487.8
4.9
3.6
11.2
269.0
147.2
55.4
101.1
2231.2
763.6
5.4
3.4
16.4
292.6
194.9
60.0
105.0
1672.0
435.0
4.4
2.4
9.3
248.9
141.3
47.0
85.5
2.8
165.4
1.3
10.9
385.2
3.1
26.1
908.0
12.9
23.3
1186.8
18.7
20.4
818.3
17.4
74.1
0.4
9.0
0.2
-
123.8
1.4
11.8
0.6
-
279.3
4.6
15.8
3.3
-
255.3
6.4
12.3
4.2
33.6
248.3
4.0
12.8
3.1
-
R : Revised
F : Final
SOCIAL INDICATORS
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
F
2008-09
R
2009-10
P
9.1
6.2
-10.1
27.3
10.4
-55.1
2.3
-7.5
-76.8
9.0
119.8
360.8
19.1
20.1
51.0
35.0
77.4
136.5
13.8
20.1
172.1
6.6
-8.6
-58.5
16.2
37.8
260.3
38.0
7.7
-233.4
13.8
31.4
89.8
17.5
10.4
-222.2
4.5
8.0
15.0
1.9
19.4
-30.3
18.2
31.2
54.2
9.4
17.4
104.7
-6.4
-10.3
-15.7
-0.3
21.1
-33.3
2.1
-6.3
-18.3
15.2
15.0
-65.9
12.4
14.2
1.8
0.7
12.6
13.0
0.4
+1.9
13.1
13.6
0.5
+3.8
12.7
13.9
1.2
+1.3
13.2
17.1
4.0
1.6
13.0
19.4
6.5
4.4
11.9
18.5
6.6
5.1
12.5
21.6
9.1
8.5
11.8
19.6
7.8
5.7
9.2
14.4
5.2
1.7
22.0
19.0
4.8
43.6
10.7
2.7
44.8
22.1
18.2
3.9
48.0
10.6
2.9
52.4
21.8
19.2
4.5
52.1
10.2
3.0
58.9
22.9
19.5
4.8
53.4
10.0
3.2
73.6
22.8
21.6
5.0
47.2
14.3
3.7
108.7
23.1
21.3
5.5
44.7
13.0
3.8
137.4
23.6
23.3
5.4
54.7
12.9
3.7
168.8
23.9
20.9
5.6
63.9
11.7
3.6
221.6
23.8
24.0
6.9
50.9
11.8
3.7
233.0
23.8
23.9
6.9
49.4
12.7
3.4
166.3
1721.0
490.0
3.8
2.9
9.7
218.0
145.0
58.6
89.4
1809.0
568.0
3.8
3.2
8.9
215.2
150.3
55.1
81.7
1925.0
582.0
5.3
3.7
10.8
280.3
164.4
49.4
95.5
1939.0
683.0
5.6
4.0
12.8
286.3
187.5
55.3
103.9
2290.0
925.0
5.9
3.0
16.4
297.3
206.7
61.0
104.8
2556.3
903.8
6.1
2.9
18.5
318.7
219.3
64.1
104.5
2727.6
1012.9
6.5
3.5
22.8
330.6
242.2
66.0
118.1
2809.4
1016.4
6.2
4.7
26.7
365.0
248.3
67.4
129.0
2862.4
1019.7
6.4
3.2
28.4
365.3
244.3
75.6
137.4
2159.2
762.0
4.9
3.1
22.7
300.7
137.0
49.5
77.9
21.0
857.4
17.5
23.2
923.8
17.7
23.5
992.6
17.8
22.6
1202.7
19.2
24.1
1344.9
19.4
23.9
1400.0
19.4
24.6
1413.6
19.4
25.6
1454.2
19.4
24.0
1460.7
19.8
17.9
1109.4
19.7
250.0
4.5
12.2
3.3
0.7
251.7
5.1
12.3
3.7
1.7
252.2
5.3
12.3
4.0
2.4
256.0
5.7
12.1
4.5
5.0
258.2
6.0
12.3
5.1
12.8
259.0
7.1
12.4
5.1
34.5
259.2
8.1
12.3
4.8
63.2
258.3
8.8
12.3
4.5
88.0
260.2
9.4
12.3
3.5
94.3
259.6
9.8
12.6
3.4
97.6
(..Contd.)
ECONOMIC AND
1960's
INDICATOR
HUMAN RESOURCES
Population
Population
Million
Labour Force
Million
Employed Labour
Force
Million
Un-employed Labour
Force
Million
Un-employment Rate % per annum
Crude Birth Rate
Per 1000 Persons
Crude Death Rate
Per 1000 Persons
Infant Mortality Rate
Per 1000 Persons
SOCIAL DEVELOPMENT
Education
Primary Schools
000 Nos.
Male
"
Female
"
Middle Schools
"
Male
"
Female
"
High Schools
"
Male
"
Female
"
Secondary/Vocational
Institutions
Nos.
Male
Female
Expenditure as % of GNP
Literacy Rate
Percent
Male
Female
Health #
Registered Doctors
(000 Nos.)
Registered Nurses
"
Registered Dentists
"
Hospitals
Numbers
Dispensaries
(000 Nos.)
Rural Health Centres
"
TB Centres
Numbers
Beds in Hospitals
and Dispensaries
000 Nos.
Expenditure on Health
as % of GNP
1970's
1980's
Average (Annual)
1990's
2000's
1999-00
96.3
11.6
124.6
35.1
150.9
45.5
137.5
40.4 E
11.2
33.1
42.4
37.2
0.4
1.4
-
2.0
5.7
-
3.6
6.8
27.4
7.9
79.6
3.2
6.0 E
32.7
9.1
85.0
88.8
64.6
24.2
6.8
4.6
2.2
5.4
3.9
1.5
143.5
96.4
47.1
15.3
8.8
6.5
10.6
7.4
3.2
155.2
96.6
58.6
31.9
16.7
15.2
18.6
11.9
6.7
162.1
107.0
55.0
18.4
10.9
7.6
12.6
9.2
3.4
508.6
282.2
235.2
0.8
29.5
39.0
18.7
572.2
328.7
243.5
2.3
40.7
51.6
28.6
1623.8
874.8
749.0
2.1
52.6
65.7
41.4
612.0
379.0
233.0
2.1
47.1
59.0
35.4
2.0
0.2
380.0
1.7
-
6.3
2.9
0.7
521.0
2.8
0.1
90.0
28.1
9.9
1.4
651.0
3.5
0.3
122.0
68.9
24.1
2.8
823.0
4.3
0.5
245.0
110.5
49.0
6.1
912.6
4.6
0.6
283.3
88.1
36.0
3.9
879.0
4.6
0.5
264.0
25.5
38.4
55.6
83.8
99.1
92.2
0.6
0.8
0.7
0.6
0.7
- : Not available
E : estimated
# : Calendar Year
P : Provisional
R : Revised
F : Final
SOCIAL INDICATORS
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
F
2008-09
R
2009-10
P
140.4
40.3
143.2
40.6
146.8
43.0
149.7
44.1
152.5
45.9
155.4
46.8
158.2
50.5
161.0
50.8
163.8
52.2
166.5
55.8
37.2
39.5
39.4
40.5
42.4
43.2
47.3
48.1
49.5
52.7
3.2
6.0
-
3.6
7.8
28.7
8.2
85.0
6.6
7.8
27.3
8.0
83.0
3.5
8.3
27.3
8.0
83.0
3.6
7.7
28.0
8.1
82.0
3.6
7.6
26.1
8.2
77.0
3.1
6.2
26.1
7.1
76.7
2.7
5.2
26.1
7.1
76.7
2.7
5.2
24.3
7.3
68.2
3.0
5.5
28.4
7.6
73.5
147.7
93.4
54.3
25.5
13.4
12.0
14.8
10.2
4.6
149.1
93.8
55.3
26.8
14.0
12.8
15.1
10.4
4.6
150.8
94.7
56.1
28.0
14.5
13.5
15.6
10.8
4.8
155.0
97.3
57.6
28.7
14.9
13.9
16.1
7.2
8.9
157.2
98.4
58.7
30.4
15.7
14.8
16.6
11.3
5.3
157.5
97.8
59.8
39.4
20.1
19.3
22.9
14.9
8.1
158.4
97.5
60.9
40.1
22.6
17.5
23.6
14.6
9.0
157.4
92.5
64.9
40.8
20.2
20.6
24.0
15.0
9.0
156.7
93.3
63.4
40.9
20.5
20.4
24.3
15.1
9.2
630.0
394.0
236.0
1.6
49.0
-
607.0
368.0
239.0
1.9
50.5
585.0
355.0
230.0
1.7
51.6
-
624.0
396.0
228.0
2.1
53.0
-
747.0
419.0
328.0
2.1
53.0
65.0
40.0
3059.0
1584.0
1475.0
2.2
54.0
65.0
42.0
3090.0
1599.0
1491.0
2.4
55.0
67.0
42.0
3125.0
1618.0
1507.0
2.4
56.0
69.0
44.0
3159.0
1636.0
1523.0
2.1
57.0
69.0
45.0
93.0
37.6
4.2
876.0
4.6
0.5
274.0
97.2
40.0
4.6
907.0
4.6
0.5
272.0
102.6
44.5
5.0
906.0
4.6
0.6
285.0
108.1
46.3
5.5
906.0
4.6
0.6
289.0
113.2
48.4
6.1
916.0
4.6
0.6
289.0
118.0
51.2
6.7
919.0
4.6
0.6
289.0
123.1
57.7
7.4
924.0
4.7
0.6
288.0
128.0
62.6
8.2
945.0
4.7
0.6
290.0
133.9
65.4
9.0
948.0
4.8
0.6
293.0
139.5
69.3
9.8
968.0
4.8
0.6
293.0
93.9
97.9
98.3
98.7
99.9
101.5
102.1
103.2
103.0
103.7
0.7
0.7
0.7
0.6
0.6
0.5
0.6
0.6
0.5
0.5
*
*
*
P
P
P
P
P
P
P
P
P
P
156.4
91.8
64.6
41.5
20.7
20.8
24.8
15.1
9.7
3193.0
1653.0
1540.0
2.0
E
E
E
E
E
E
E
E
E
E

Economic Survey Pakistan 2009 10

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conjunction withthe need toputinplace targetedsocialsafetynets,willfurtheraddtotheresource

Continued overhang of commodity financing debt stock, if unchecked, threatens to

Source: National Crisis Management Cell, Ministry of Interior, Government of Pakistan

The exportsector,withacontributionof12 percent to GDP,andasubstantialemploymentbase,has

Inclusive of original allocation and supplementary grants in budget 2009/10.

Theeffectoflowerenergyavailability isestimated atthe equivalentof2.02.5percentof GDPduring

I. COMMODITY PROD. SECTOR

6 Mining & Quarrying

Source: Federal Bureau of Statistics

Source: Federal Bureau of Statistics

Source: Federal Bureau of Statistics

Private & Public (A+B)

Public and General

0708 0809 0910

TABLE 2.1 (A)

TABLE 2.1 (B)

TABLE 2.1 (B)

Not Available for Culturable

Production of Important Fruit (000 tonnes)

Fertilizer off-take (000 N/Tonnes)

(Rs per bag of 50 Kgs/110lbs)

Seed Cotton (Phutti)

* : Population figures are actual figures of Livestock Census 2006

* : Population figures are actual figures of Livestock Census 2006

Working at the end

Food and Tobacco

Transport, Machinery &

Paper & Board

Against a backdrop of the most severe global Table4.1:StimulusPackages(est.)

Development Expenditure (PSDP)

Source: Budget Wing, Finance Division, Islamabad

Total Revenue (I+II)

I. Tax Revenues (A+B)

A. Direct Taxes (1+2)

5. Taxes on International Trade

7.1 Stamp Duties

7.2 Motor Vehicle Taxes

7.3 Foreign Travel Tax*

* : Revenues under these heads are exclusively Federal

Source: Budget Wing, Finance Division, Islamabad

Fiscal Year / Item

Interest on Domestic Debt

Interest on Foreign Debt

B. Repayment/Amortization of Foreign Debt

C. Total Debt Servicing (A+B)

(As Percent of GDP)

Interest on Domestic Debt

Interest on Foreign Debt

Repayment/Amortization of Foreign Debt

Total Debt Servicing

*July 2009-March 2010

Source: Budget Wing, Finance Division

The policy discount rate and the Cash Reserve

Net Bank Credit to Government

177,234 313,661 339,718 225,201

Currency held by SBP

Currency in tills of Scheduled Banks

Currency in circulation (1-2-3)

Other deposits with SBP 1

Scheduled Banks Total Deposits

Resident Foreign Currency Deposits