i

COMSATS WAH CANTT

NAME: HAMZA IMTIAZ MALIK
REG NO#: FA13-BS(SE)-039
Subject: Report Writing
Instructor: MR. NAVEED AHMAD

ASSIGNMENT NO. 2






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Table of Contents
ACKNOWLEDGEMENT ......................................................... Error! Bookmark not defined.
Abstract ......................................................................................................................... 2
Introduction ................................................................................................................... 3
Yearly Development Report Analysis .................................................................................... 4
During 1961-62.................................................................................................................... 4
During 1962-63 ..................................................................................................................... 4
During 1963-64.................................................................................................................... 5
During 1964-65 ..................................................................................................................... 6
During 1965-66 ..................................................................................................................... 6
During 1966-67 ..................................................................................................................... 6
During 1967-68 ..................................................................................................................... 7
During 1968-69 ..................................................................................................................... 7
During 1971-72 ..................................................................................................................... 7
During 1972-73 ..................................................................................................................... 8
During 1973-74 ..................................................................................................................... 8
During 1974-75 ..................................................................................................................... 9
During 1975-76 ..................................................................................................................... 9
During 1976-77 ....................................................................................................................10
During 1977-78...................................................................................................................10
During 1979-80...................................................................................................................11
During 1981-82...................................................................................................................11
During 1982-83...................................................................................................................11
During 1983-84 ....................................................................................................................12
During 1984-85 ....................................................................................................................12
During 1985-86 ....................................................................................................................13
During 1986-87 ....................................................................................................................13
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During 1987-88 ....................................................................................................................13
During 1988-89 ....................................................................................................................13
During 1989-90 ....................................................................................................................14
During 1990-91 ....................................................................................................................14
During 1992-93 ....................................................................................................................14
During 1993-94 ....................................................................................................................15
During 1995-96 ....................................................................................................................16
During 1996-97 ....................................................................................................................17
During 1997-98 ....................................................................................................................17
During 1997-98 ....................................................................................................................17
During 1999-2000 .................................................................................................................17
During 2000-01 ....................................................................................................................18
During 2001-02 ....................................................................................................................18
During 2002-03 ....................................................................................................................18
Pakistan Development plans ........................................................................................ 19
1. First Five Year Plan (1955-60)-An Erratic Beginning to planned Development. ...............20
2. Second Five Year Plan (1960-65)- An Experiment In Functional Inequality.....................20
3. Third Five year Plan (1965-70)- A Prisoner of Extraordinary Events. ..............................20
4. Fourth Five year Plan (1970-75)- A non-starter from the beginning. ...............................21
5. Fifth Five Year Plan (1978-83)-A Return of the Medium Term Planning. .........................21
6. Sixth Five year Plan (1983-88)- Development of the people, By the people, For the people.
21
7. Seventh Five Year Plan (1988-93)-Precursor of a long Term vision. ................................21
8. Eighth Five year Plan (1993-98)- An exercise in better macro-economic Management ....22
Conclusion.................................................................................................................... 23
Recommendations ......................................................................................................... 25
Bibliography: .............................................................................................................. 26
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Title Page

Praise is to Allah Almighty, the one testing us all at all times and making decisions
about what we dont know and cant know. Writing this report appeared to be a great
experience to us. It added a lot to our knowledge while we were working on this project.
If we say that this project is one of our memorable experiences in student life, then it
would not be wrong.
We owe deep appreciation to Mr. Naveed Ahmad for stimulating our creative abilities
by assigning this report to us. We are immensely obliged to all our fellow students who
guided us in making this report, without whose considerate attention and interest, it
would be difficult for us to complete this project on time. Whatever we have learnt from
them and this project report has put permanent impression on our mind. It is our
conviction that this learning experience will always be a source of help in our practical
life and professional career.
2
Abstract

The study about Pakistan Economy related to Industry sector. The project comprises on
the finding of Annually development reports and five year plans from 1960s to 2003. In this
decade many ups and downs come in to the Industrial sector.
Industrial sector is second largest sector in the economy of Pakistan in terms of it
contribution in the GDP. In this discuss about the factors that totally affect or depend the
industrial sector. Statistical analysis of the consumer goods (Sugar, cement, jute goods and etc)
year to year is count and analyze the factors that raise GNP or fall GNP.
After getting familiar with the importance and yearly contribution of Industrial sector in
Annual growth rate. The study includes some recommendations for future betterment of the
industrial sector.
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Introduction

Pakistan has a semi-industrialized economy, which mainly encompasses textiles,
chemicals, food processing, agriculture and other industries.
The economy has suffered in the past from decades of internal political disputes, a fast
growing population and ongoing confrontation with neighboring India.
Pakistan's average economic growth rate since independence has been higher than the
average growth rate of the world economy during the period. Average annual real GDP growth
rates were 6.8% in the 1960s, 4.8% in the 1970s, and 6.5% in the 1980s. Average annual growth
fell to 4.6% in the 1990s with significantly lower growth in the second half of that decade.
Two wars with India in Second Kashmir War 1965 and Bangladesh Liberation War 1971
and separation of Bangladesh adversely affected economic growth. In particular, the latter war
brought the economy close to recession, although economic output rebounded sharply until
the nationalizations of the mid-1970s.
Pakistan is aggressively cutting tariffs and assisting exports by improving ports, roads,
electricity supplies and irrigation projects. Islamabad has doubled development spending from
about 2% of GDP in the 1990s to 4% in 2003, a necessary step towards reversing the broad
underdevelopment of its social sector.
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Yearly Development Report Analysis

During 1961-62
The increase in industrial production in the 2-was about 18 percent, as compared to
only 6 percent during 1961.
During the first 2.5years of the plan period (July 1960-dec 1962), the previous made in
last industrial investment schedule (November 1960) had been over committed to the extent of
43 per against the total provision of rs.284 crores the amount committed war s 407 crores.
Guiding objective of government industrial policy to is to maximize the production of
manufacturing goods within the country and to accelerate e the development of the less
developed regions.
Protection from foreign competition and the various fiscal and monetary concession and
facilities are some of the many aids which the government has provided to industry.
Government policy to entrust the public sector with only such enterprises as the private sector
is either unable or unwilling to undertake, because of large capital investment or low return.
Special attention from government to the industrial development of less developed areas the
establishment
Projects of heave industries and the heavy sophisticated and first half of 196y industries
such as trucks, machine tools and electronics equipment have already been sanctioned.
During 1962-63
Investment schedule:
It will de seen from the above that the amount so far sanctioned has exceeded the
provision made in the schedule by 43 per cent. Of the 107 industries
provided for in the schedule, provision in respect of 69 has either
been fully committed or over utilized. Some of the important items
fro which allocation have been exhausted are steel, pipes, cotton
spinning and weaving and processing of fish, and shrimps, edible
oils and vegetable ghee.
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During 1963-64
The industrial policy of government continued to aim at rapidly expanding the
production of consumer, exportable and producer goods, improving the industrial efficiency
and quality of local products and accelerating the development of less developed regions.
Production of large and medium industries during the first three years of the second
plan period increased by 34 per cent and that of small industries by 15 per cent, against 60 per
cent and 25 per cent respectively aimed at during the entire plan period.
Taking 1959-60 as the base year the index of industrial production rose from 119.2 in
1961-62 to 133.6 in 1962-63 and is estimated to have increased to 156.5 in the quarter oct to
dec, 1963.
West Pakistan industrial development corporation:
Heavy engineering: the feasibility report on the heavy industry complex, estimated to cost 25
crores has been received. Effort is also being made to associate foreign capital participation.
Chemical fertilizers: The expansion will raise capacity from 50/000 tons to 1 lakh tons.
Financing arrangement s with the supplying
countries is being made for the Lyallpur factory
expansion aimed at raising the capacity by 36,000
tone of super phosphate.
Cement factories: a scheme for the 5
th
plan of the
zeal par cement factory to raise present capacity by
another 2, 10,000 tons per annum is in hand, while
cement plant of 15,000 tons capacity are in early
stages of execution.
Sugar industry: W.P.I.D.C has sponsored two sugar mills at bannu and bad in each with a
capacity of 15,000 to 18,000 tons of white sugar per annum.
Jute: This mill at jaranwala in west pak will manufacture 17,000 tones of jute goods per annum.
shipyard: the expansion scheme form the Karachi shipyard has been prepared by the
corporation. it provides a second dry-dock and a second berth and constriction of ships of
10,000 tons per year.
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During 1964-65
The efforts made both by the government and by private enterprises to achieve these
objectives have met with a large measure of success. The increase in manufacturing output was
on less spectacular. Its index which had risen by 12 per cent to 134.2 in 1962-63 rose by 13.8
per cent to 152.7 in 1963-64 and stood at 157.6 in oct- dec 1964.
Almost all industries contributed to the increase in production so much that self-
sufficiency has been attained in a large number of consumer goods industries and attention is
now being focused on the development of heavy and more sophisticated industries like steel
mills machine tools plant petrol chemicals and fertilizers factories etc.
During 1965-66
During 1965-1966the pace of industrial growth was slower because of the several
factors like the effect of war with India which for sometime restricted the operation of some
industries, suspension of foreign economic aid and consequent reduction in imported industries
raw material and spare parts and diversion of some national resources to defense. But in-spite
of these problems the industrial growth maintained.
According to central statistics office the index of production of manufacturing industries
increased by 6% from201.7 in 1964-65 to 214.2 in 1965-66. There was significant increase in 65-
66 in the production of sugar, vegetable ghee, cigarettes, jute goods, art silk and rayon cloth,
some varieties of and some organic chemicals like sulphuric acid and chlorine gas. And however
there were declines in the production of cotton, textile, newsprint, straw, and paper board,
packing and other paper, tea, sea salt, cement, tyres and tubes, paints, super phosphate and
few fertilizer and soda ash.
During 1966-67
The production trend during this year appears to b encouraging with the expectation of
chemical and cotton textile. The production of minerals increases very slowly. The index of
minerals production rose by 1.5% point from 174.5 to 176 during this year. It rose by 6.2 points
to 182.2 during 66-67. The index is estimated to rise by 9% to 233 in 66-67.
Investment: A comprehensive industrial investment schedule for the entire third plane period
aimed ensuring fulfillment planes investment target of 830 crores. It covered 200 items
involving large medium and small industries the investment allocation is rupees 1088.53 crores
in the private sectors, 586.07 crores West Pakistan and 502.46 crores for East Pakistan.
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Credits: Major allocations during this year from France 16.19 million $. USSR 9.67 million $.UK
15.98 million $. WORLD BANK 9.18 million $ and Belgium 4 million $. Total allocation increase
from 89.21 million $ in this year to 121.48 million $.
During 1967-68
The government entered into an agreement with the government of Poland will provide
the equipment required for the implementation of this project and it consists of 2.6 crore
expenditure. In western Pakistan during this year 143 miles of new forest roads and bridle
paths were constructed and another 150 miles are expected to be constructed. This year
government had given the attention to developed heavy and more sophisticated industries
such as engineering, electrical equipment, machine tools and petro chemicals etc.
During this year there is increase in the production of tea, salt, cotton cloth and yarn,
board, caustic soda, cement and cycle rubber tyres and tubes. The increase in the quantum
index of manufacturing industries from 100 in 1959-60 to 201.7 in 1964-65.
During 1968-69
Growth in 68-69 was 7.4% that was previously 7.8%. And in 49-50 the share go
agriculture was standing 60% which cam\e down to 46% in 68-69. This trend towards
diversification is also reflected in the pattern of exports and imports the share of primary
commodities, which was 95% of our exports in 1950 to 1951 decline to 69% in 64-65 and future
to 53% in 67-68 the rest being accounted for by
manufacture and semi manufacture. During 1967-68
and 1968-69 the increase in manufacturing output in
certain industries was a quite impressive. Production
of sea salt and cigarettes have already exceed the pain
target, while the performance of newsprints and
mechanical paper was 47%, cotton yarn 79.6%, white
sugar 63.9%, vegetable ghee 68.6%, juice goods
53.4$%. During 1967-68, substantial gains were also recorded by cotton yarn and cloth fertilizes
and chemicals, writing and printing paper etc. production of board and cycle tyres and tubes,
however, declined during the year.
During 1971-72
Industrial manufacturing is second largest sector in the economy in term of its
contribution to the gross domestic products. Currently its account one - fifth of GDP. Cotton,
Textile, Cement, leather goods etc are the products through which Pakistan enter in the world
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markets. Cotton textile 48% added value in the sector and cigarettes 10%, sugar 7%, basic
metals, electric and transport 5%.
Industrial growth is not smooth through out the history. Shortfall in the case of chemical
and chemical fertilizing because of different factor, war with India and tight credit polices and
East Pakistan crisis. Conditions are remaining unfavorable. The growth rate of large scale
industrial decline from 13.9% in 1969-70 to 2.8 in 1970-71 and showed a negative growth rate
of 5.6 percent in 1971-72.
During 1972-73
Industrial sector had all along been leading sector in terms of sustain growth. Value
added fell by 6.8%during 1971-72 compared to depress based of 1970-71 when the growth was
only 1.2%. GNP decline 12.7% 1970-71 to 11.7%.in 1971-72. Factors that affect GNP is loss of
East Pakistan market and shortage of raw material. Now manufacturing is now second largest
sector after agriculture in terms of contribution in GNP. Raw material of capital goods
accounted for 10.5 % of total imports and capital goods constituted 42.4% of total imports.
Heavy industry: A machine tool factory in Karachi already gone in production and produce
Rs.15 crore annually. Heavy Mechanical Complex at textile being built with Chinese assistance.
The plant is producing sugar, cement, road building machinery worth over Rs. 9 crore annually.
A steel mill of 1 million ton capacity near Karachi with assistance of U.S.S.R.
Strikes of labor also disturb the industrial production. Labor reforms introduce to
improve the workers.
In the start of 1972-73 improve some implications through which growth of different
product increase. Quantum index of manufacturing industry which had decline 162.1 in 1970-
71 to 151.1 in 19971-72 is estimated to have increased to 160.6 in 1972-73.
During 1973-74
Steady growth in 1973-74. Different factor, like war with India and tight credit polices
and East Pakistan crisis growth decline 6.8% in 1971-72. Steady improvement or recovery in
1972-73. Greater availability of industrial raw material increased growth rate 11.8% during
1972-73. In 1973-74 slow down in growth rate due to slackness, difficulties in obtaining raw
material and growth rate is 7% projected in this year. Large and small manufacturing scale 15%
of total GDP. Pakistan not only manufacture consumer goods its also export cotton cloth,
carpet, sports good cement and leather.
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During 1974-75
Manufacturing sector slow-down during 1974-75 because low level of investment and
shortage of raw material. Textile has heavy weight age in total industrial production.
Decline export of cement fulfills the need of cement in the country. Import of raw
material increased 66.6% fairly satisfactory. Improvements in industries of cotton, sugar and
cement in 1974-75. Also public sector investment industry is estimated at 1974-75.
During the period july 1974-march 1975 different items decline/increase over a
comparable period of last year.
Cotton yarn and cloth: Decline of 6.8 % in the production of yarn and 23.5 % decline in cloth.
Fertilizer: Increase in fertilizer production. The factories are working above their rated
capacities to fulfill the demand of the agriculture sector.
Vegetable ghee: The sharp increase of vegetable ghee production better utilization of installed
capacity. Actual production is 2.27 lakh tons during 1974-75.
Sugar: Decline in 4.4% in the production of sugar in 1974-75.
Cement: 16.2 % increase in cement because of operations plants are above rated capacity.
Cigarette: 0.3 % decrease in the production of cigarette during the period factory in Punjab
closed.
Safety Matches: Production of safety matches 20 % increased during 1974-75.
Electric fans & M.S. products: Electric fans decline 18 % & also decline of M.S. products 6.6 %
During 1975-76
Affects of international recession cause the large scale manufacturing sector estimated
to have growth of 1% with 15% for the whole sector 1974-75 there was also difficult when
value added project to grow by 10% in the LSM sector recorded negative growth of 1.7%
Index of manufacturing industries was 120.4 in 1974-75 and has been risen to 121.6% in
1975-76
At that time overall projects had been embraced both in public and private sector that
supports the manufacturing sector that is performance of the most of the industries was
satisfactory.
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During 1976-77
During this time manufacturing sector continue to remain under pressure due to various
national and international factors.
Export of cotton yarn 186.2m in 1972-73 decreases to 143.7 in 1975-76. Yarn exports
was 105.9m (1975-76) decreases to 87.3m in 1976-77
Export of cotton clothes, 97.1 m 1975-76 increases to 99.2m 1976-77 but quantity
decreases because exported prices of yarn had improved
Production of cotton yarn and cloth decreases by 18% in 1976-77 as in 1975-76
In 1976-77 LSI sector record negative growth of 2% against target of 9%
In 1976-77 SSI record growth of 3%
In 1976-77 manufacturing sector overall decline by 0.8%
In 1975-76 witness the inauguration of heavy foundry and forge at Texilla that cost about 616m.
Processing capacity national refining increase from .5m tons to 1.5 m tons
Project of Fertilizers also continue to further broader the counties industrial base setting
up a number of new fertilizers Cement and other plants.
During 1977-78
All the industries were going good but the decline in cotton cloth industry brought down
the overall contribution made by all the industries.
Trend of Industrial Production
Some of the items were having got rise in production while some of them got short fall:
Cotton Textiles: The decline of 6.5% in the production of cloth is a follow-up in the main.
Art-silk & Rayon cloth: In 1977-78 art-silk and Rayon cloth got 9% increase as compare to
the period 1976-77 due rising domestic demand and availability of synthetic fiber.
Vegetable Ghee: In the period 1977-78 vegetable oil got rise of 15.9% over the period of 1976-
77 due to high imports of edible oil and better availability of domestic cotton seed oil from
large cotton crop this year.
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Sugar: The increase of 22.9 % in the production of sugar was due to the better availability of
sugar cane.
Fertilizers: Fertilizers got a small decline of 2.2% in the production was offset by an increase of
1% in the out of fertilizers.
During 1979-80
The industrial recovery in initiated in 1978-79, after
virtual stagnation for three years has been further
consolidated the sector recorded a growth rate of 9.2%
in 1977-78, 4.8% in 1978-79 and 8.1 % in 1979-80. The
private sector lost confident in Govt. Policies and there
was a visible decline in industrial investment.
Policy/ Institutional Measures:
Denationalization the agro based industry was the first step took by Govt. in December
1980. Ever since 32 large industries units under 10 categories were take over in Public sectors.
During 1981-82
Manufacturing is second largest sector in economy and accounts for 17% of GDP. This
industrial gain is due to the Present Industrial policies pursued since 1977. Principle measured
and incentive provided by the Govt. are indicated below:
Monetary Incentives: Mandatory target was settled for small scale industry. In July 1978, the
interest rate on loans for fixed investment in industry and agriculture was reduced from 12.5%
to 11%.
Fiscal Incentives: With effect from September 4, 1978 compensatory rebates ranged from 7.5%
to 12.5% on F.O.B value of the exports of may cotton textile products have been allowed. These
incentives have been subsequently extended to manufacture of engineering goods.
Other Measures: A sponsor can apply for import license for machinery directly to the chief
controller of Imports and Exports. But normally duty is payable on the import of machinery. The
NRI projects are entitled to 25% concession in normal custom duty applicable.
During 1982-83
Manufacturing sector registered a growth of 8.3% during 1982-83 as compared to last
year 11.9%. The growth performance of 9% during fifth plan reflects significant increase in the
production of all major consumer items and some capital goods.
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Measures to Encourage Industry:
Fiscal Measures:
The major additional fiscal measures to encourage private industrial investors which were
announced in 1981-82 and 1982-83:
Initial depreciation allowance on plant and machinery were raised from 25-40%.
Monetary limit of investment rose from 45000 to 50000 RS.
Incentives for Overseas Pakistanis: Machinery up to RS. 15 million was allowed to be imported
against non-reportable investment without any prior sanction from any agency.
Export processing Zone: To attract the foreign investors an export
processing zone has been set up at Karachi over an area of 80.94
hectares. In this zone every kind of import takes place and export of
goods was freely allowed. Investment in zone has been allowed
income tax exemption for a period of 5 years and capital gain on sale
of assets will be exempt from taxes.
During 1983-84
Livestock contributed about 8.2% to GDP from 1983-84. The production and the per
capita availability have also increased. The exports of fisheries increased from Rs. 789.9 million
to Rs. 897.1 million from 1983-84. If we come to forestry, Pakistan had only 4% of forest area in
country. The demand is high but the production is low. And this gap is met by help from private
farm lands and imports.
Manufacturing accounts for 18.9 % of GDP, 55% of exports and 14.9% of labor force.
Manufacturing growth fell to 7.7% during 1983-84 from 8.9% in 1982-83, mainly due to lower
output of cotton textiles, as a result of shortage of raw cotton.
During 1984-85
In 1984- 1985 manufacturing growth was about 8.6% after a slow down last fiscal year
which was 8.1%. Nevertheless the growth rate achieved exceeded the average growth of
manufacturing in other countries. As compared to the previous year, most of the items saw a
%increase like sugar, motor tyres and tubes, vegetable ghee etc. But some items such as sea
salt and beverages saw a decline.
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During 1985-86
During 1985-86, GDP for manufacturing output has been 19.9%. during this year the
manufacturing is expected to grow by 8.2% as compared to 8.6% of previous year.
The annual average growth rate for manufacturing sector growth for small scale is 9.40
and for large scale is 7.82 making a total of 8.24 which is greater than previous year having
8.10.
During 1986-87
The manufacturing output has grown by 7.4% in 1986-87 as compared to 7.8% in 1985-
86. The annual compounded growth rate has been reducing since 1977-87 from 10.8 to 7.4
During 1987-88
Manufacturing:
According to the latest Labor Force Survey 1987-88 this sector absorbs 13.4% of the
total employed labor force in the country. This year 1987-88 show that the output has grown by
7.6% .The rate of growth in large-scale industries during 1987-88 was 7.4% and this growth
based on the selected industries which constitute 60% of the total large industries sub-sector.
Production trend:
During the first 9 months of 1987-88 out of 15 selected industries with a combined
weight of 44.3% there was increase in production of cotton yarn up to 17% and cotton cloth
production increases to 15.8%. Production of sugar in this year was 24.7% which means more
growth of sugar than the recent two years. Production of fertilizer, cement, and paper board
and jute goods decreases to -0.2%, 9.2%, 0% and -2% these industries had low growth rate as
compare to previous two years.
During 1988-89
Manufacturing:
In the budget of 1988-89 large number of fiscal and monetary incentives had made
available to the private sector for industrialization. Manufacturing sector was expected to grow
by3.07% in this year but it had increased by 3.96%.
Production trend:
Value added in large scale manufacturing during this year (1988-89) was increase by
1.19%, while that in small scale industries by 8.40%. The percentage of share in GDP in this
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year was 17.4%. There is decrease in the production of sugar, cement, and fertilizers and
increase in soda Ash production in this year. Overall there decrease in the production of more
industries in this year as compare to last two year.
During 1989-90
Manufacturing:
Manufacturing sector was expected to grow by 5.70% and it had increased by same
percentage as expected. The percentage of share in GDP in this year was 17.58%.
Production trend:
The production index in this year was 192.1 as compare to 183.4 of last year. In this year
there is dramatic increase in the production of industrial products because of applying new
policies of last year. There is increase in the production of sugar, cement, and fertilizers and
decrease in soda Ash, sugar and paper of all types production in this year.
During 1990-91
Manufacturing:
Manufacturing sector was expected to grow by 5.70% and it had increased by same
percentage as expected. The percentage of share in GDP in this year was 17.61%.
Production trend:
The production index in this year was 201.2 as compare to 192.1 of last year. In this year
large scale manufacturing was estimated to increase by 4.72% and small scale by 8.40%. in
1990-91 there is substantial increase in the production of billets followed by cotton yarn,
caustic soda, cement, pig iron and sugar. The production cotton cloth, vegetable ghee,
cigarettes, fertilizers, and paper all types declined due to various factors which are due to
various factors.
During 1992-93
Manufacturing:
The value added in manufacturing sector as hole grew by 5.6% during this year. Within
the sector the small scale industries maintained a growth of 8.4% based on a conventional
assumption, whereas its share in the GDP rose from 5.1% of last year to 5.3%.
15
Production trend:
The production of jute goods, phosphates fertilizer, paper all types, soda ash and caustic
soda declined by 2.8%, 2%, 6.2%, 0.4% and 1.9% in this year.
During 1993-94
During 1993-94 policies of privatization, deregulation and market friendly environment
were reinforced. A new concept of public-private partnership was also introduced to enable
private sector to play a key role in social sector growth. In 1993-94 performance of
manufacturing sector though short of expectations but showed improvements over 1992-93
Textile and ancillary industries affected by consequential increase in cotton & yarn
prices. There was Global shortage of cotton. Manufacturing sector affected by inadequate
power supply, break down of few power units and protracted load-shedding as result of
declining water levels. Still manufacturing sector showed resilience and maintained growth
trend.
Large scale manufacturing:
Textile industry is largest and important sub-sector of economy and the largest source
of job opportunities and accounts for 32.23% of total industrial labor force. It suffered seriously
in 1993-94
Production of yarn increased by 5.47% but production of clothes decreased by 3.63%
Industry also suffered from industrial structure due to lack of efforts to diversify to other
cotton segments, high interests rate and depreciation costs. Government takes steps to
redress the problems of cotton and ancillary industry. Polyester fiber and yarn industry, to
reduce pressure on raw cotton and availability of man-made fiber, import duty reduced from
Rs10 to 7.50/Kg.
Jute goods in July to march it were 75.7mt (1992-93) to 59.2mt (1993-94) with % -
21.80mt
Fertilizers include Nitrogenous and phosphates fertilizer in July to march 2030.8mt and
252.7mt (1992-93) as 2583.3mt and 240.2mt (1993-94) with % 27.21 and -4.95 respectively
Cement: In July to march 6341mt (1992-93) to 6308mt (1993-94) with % -0.52mt
Sugar: July to march 2240mt (1992-93) to 2619mt (1993-94) with % 16.91mt
Vegetable and cooking oil, in July to march 98752mt (1992-93) to 97768mt (1993-94)
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Small Scale Manufacturing:
Important segments of the economy generates employee opportunities their share in
GDP is 5.58% compare with 13.0% for the large scale manufacturing during 1993-94. These are
operating in all provinces of Pakistan where various training and handicrafts units are handled.
Public Sector Industries: Performance of these increases in 1993-94 because of efforts focused
on to boost production and investment.
Production value 26227m (192-93) to 28102m (193-94) with % 7.15m
Production state and cement corporation increased by 29.93%, Pakistan steel by
17.27%, Pakistan industrial development corporation by 14.24%, state engineering corporation
by 9.25% while production value decline by 5.27% and 33.72% of national fertilizer corporation
and Pakistan automobile corporation.
Net sales, aggregate net sales of all units by 41723m (192-93) to 45490m (193-94) with
% 3767
Pretax Profit/Loss: was 2424m (1992-92) to 4114m (193-94) with % 69.72m
Taxes and duties paid: 7744m (1992-93) to 11232m (1993-94) with % 45.04m
During 1995-96
Many improvements is taking place in this duration due to the policies of privatization,
de-regulation and liberalization.
Manufacturing during 1995-1996 grew 4.8%. that was previously 2.9% in 1994-1995.
The large scale manufacturing grew by 3.13% during 95-96. That was previously .54% during
94-95. And small manufacturing maintained the past trend with annual growth of 8.4% current
years.
Installed capacity in major sector such as textile, cement and sugar also expended
during the year. Investment in Industrial sector as a whole grew 37.6% during 95-96. And
foreign investment also increased 30% during 95-96. Direct investment is also increased 94.1%
during 95-96 compare to the direct investment of 94-95.
Production of major items increased as compare to last year and those items are cotton
yarn, cigarettes, cement, soda, ash, caustic soda, motor cycle and bikes.
17
During 1996-97
Liberalization policies also continued in this duration. Large scale manufactures have fell
short of expectations in term of growth. And then prime minister announce a package for the
support of manufacturing sector. In this duration small scale manufacturing maintained its
growth. But large scale declining by 1.43% in value added. And over all growth of manufacturing
sector was 1.78% which was previously 4.4%.
The items that have showed increase in previous year such as cotton yarn, cigarettes,
cement, soda, ash, caustic soda, motor cycle and bikes have showed mix trend. But there is an
increase in products of steel e.g coke, pig and iron.
During 1997-98
Liberalization policies also continued in this duration. Due to the government package
the commodity producing sector demonstrated a sharp acceleration in growth in this duration.
Manufacturing being second largest commodity producing sector staged a recovery registering
a growth rate of 6.96% in this duration as compare to last year.
Large scale manufacturing sector grow a dominant improvement with 6.19%. that was
previously 2.29%. Manufacturing sector overall growth was 6.5%. And major industries like
sugar, textile and cement also improved their installed capacity.
The main items who are main contributor in this revival are sugar, jute goods, cigarettes,
motor tires and tractors. And the item like cotton yarn, cotton cloth, paper, LCVS and bicycles
showed nominal growth.
During 1997-98
Global economic recession has slowed down the growth of large scale manufacturing in
98-99. Nevertheless it has registered a positive growth of 2.7% during 98-99. Some industries
which registered a considerable growth like cotton, cloth, fertilizer, cigarettes, vegetable ghee,
soda ash, caustic soda, paper board, cement, bicycles, refrigerator, tv sets, cars, buses and
tractors. And output is also not decreased in certain industries like blended tea, jute goods,
LCVS, papers and all types of motor cycle and steel products.
During 1999-2000
In 1999-2000, the overall manufacturing has grown by 1.6%. And the performance of
the LSM was very weak and it shows a growth of 0%. The factor which affects it more was
massive decline in the sugar cane production which leads toward decline in the production of
sugar. And its production lower by 24%. The growth rate excluding the sugar industry was 6.4%
18
which was comparatively better performance than last year. In these period only two out of
eleven sectors exhibited substantial decline which were 1-Food, Beverages and tobacco 2-
Automobile sector.
During 2000-01
In 2000-01 manufacturing staged an impressive recovery and it grew 7.1% with
comparison to last year 1.4%. And it was the best in last ten years. And LSM growth was 7.8%.
All sectors posted positive growth. This growth was same as in 1997-98 but that growth was
only dependent upon the sugar production.
During 2001-02
In 2001-02, LSM targeted to grow by 6.5% but due to event of 9-11 it grew only 4%. This
performance was more than satisfactory because the revised target was 3.2%. The LSM growth
affected in Sep-Nov due to Afghan war but it rose again in December. Other factors which
affect the growth were automobile sector by setting up the shortage.
During 2002-03
The year 2002-03 become the best performing year beside 2000-01for manufacturing
sector since 1987-88. Manufacturing grow by 7.7% with the contribution of 8.7% by LSM. The
growth surpassed the target of 6.5% for 2002-03. This all was due to domestic demand and
macro environment factors. Only leather industry showed a negative growth. The best industry
in this period who showed positive growth were automobile (49.8) Food and beverages (8.5)
textile and apparel (5.2) Paper board (15.7) and tires and tube (16.2).
19
Pakistan Development plans
There are total 8 Development plans have been presented in the history of Pakistan which are
listed below:
1. First Five Year Plan (1955-60)-An Erratic Beginning to planned Development.
2. Second Five Year Plan (1960-65)- An Experiment In Functional Inequality
3. Third Five year Plan (1965-70)- A Prisoner of Extraordinary Events
4. Fourth Five year Plan (1970-75)- A non-starter from the beginning
5. Fifth Five Year Plan (1978-83)-A Return of the Medium Term Planning
6. Sixth Five year Plan (1983-88)- Development of the people, By the people, For the
people
7. Seventh Five Year Plan (1988-93)-Precursor of a long Term vision
8. Eighth Five year Plan (1993-98)- An exercise in better macro-economic Management.
Here we are not discussing the whole Five Years Plans but going to take specific and relevant
part related to our topic from each Five Year Plan.
20
1. First Five Year Plan (1955-60)-An Erratic Beginning to planned
Development.
The revised total size of the First Plan was Rs. 1,080 crores with the public sector expenditures
of Rs. 750 crores and private sector expenditures of Rs. 330 crores. The First Plan was
implemented within certain obvious handicaps and limitations and its release was delayed by
two Years. The GNP recoded a growth of 13% instead of 15% as targeted in the Plan.
Industry together with fuels and minerals received another 31% of the total resources which
exceeds the target of 28% provided in the Plan.
2. Second Five Year Plan (1960-65)- An Experiment In Functional
Inequality.
The revised total size of the second Plan was fixed at Rs. 2300 crores in April, 1961. As
regards sector distribution, the size of the private sector expenditure was fixed at Rs. 1240
crores, while public sector was allocated Rs. 680 crores and the newly introduced semi-public
sector consisting of autonomous corporations was allocated the remaining sum of Rs. 380
crores.
The strategy paid off very well as the actual growth rate surpassed the projected growth
rate. The GNP registered a growth of 30% over the plan period compared to 24% proposed in
the plan and per capita income grew 15% instead of 12% projected in the plan.
The large scale industrial production exhibited nearly 161% increases in production
compared to only 60% increase proposed in the Plan. The share of the manufacturing industry
in GNP as a whole rose from 9.3% in 1960 to 11.5% in 1965.
3. Third Five year Plan (1965-70)- A Prisoner of Extraordinary Events.
The revised total size of the second Plan was fixed at Rs. 5200 crores as compared to Rs.
2300 crores in (1960-1965). In this Plan there was a great visible investment shift from
consumer goods to capital goods industry.
If we talk about the achievement of this Plan, the performance in the industrial sector
was also far from satisfactory particularly in the large-scale industrial sector. The large-scale
industrial sector exhibited a growth rate of 10% as against 13% targeted in the Plan. The
industrial sector as a whole expanded at an annual growth rate of 7.8% instead of 10% targeted
in the Plan. The small-scale industry also performed well.
21
4. Fourth Five year Plan (1970-75)- A non-starter from the beginning.
The revised total size of the second Plan was fixed at Rs. 7500 crores, an increase in 44%
over the Third Plan size. The increase 6.5% annual growth rate as compared to 5.5% targeted in
the Plan.
The share of the industrial sector that had 10% growth rate in the last Plan was
drastically slashed from 26% in the Third Plan to 10.2% in the Fourth.
5. Fifth Five Year Plan (1978-83)-A Return of the Medium Term
Planning.
The total size of the Plan was targeted at Rs. 21000 crores out of which Rs. 14820 crores
were proposed to be spent in the public sector and Rs. 6200 crores were proposed for the
private sector.
No major new industrial projects was planned for the public sector however it was
emphasized the completion of the under construction Pakistan steel mills and fertilizers and
cement factories. Private sector was expected to pay a vital role in the development of few
industries which is good for the well-being of the country. As a whole, the growth rate
projected for the industrial sector was almost fulfilled (growth rate was 9.7% as compared to
10% targeted in the Plan).
6. Sixth Five year Plan (1983-88)- Development of the people, By the
people, For the people.
The total size of the Plan was fixed at Rs. 49,500 crores which was more than twice the
size of the fifth Plan. Out of which Rs. 29,500 crores and Rs. 20,000 crores were allocated to
public and private sector respectively. The share of the private investment in industrial
development was to go up from 53.6% in 1982/83 to 91% in 1987/88 and in total investment
from 32.9% to 44% during the same period.
The share of the public sector industries in public sector development program was
therefore expected to decline from 15.6% to 5.1% as compared to forth Plan.
The industrial sector as a whole exhibited a growth rate of 7.7% per annum against the
Plan targeted of 9.3% per annum.
7. Seventh Five Year Plan (1988-93)-Precursor of a long Term vision.
The total size of the Plan was fixed at Rs. 66,020 crores which was more than fifth Plan.
Out of which Rs. 29240 crores and Rs. 36,780 crores were allocated to public and private sector
respectively.
22
The share of industry decreased from 5.1% in the sixth Plan to 2.0% in the
seventh sector Plan.
8. Eighth Five year Plan (1993-98)- An exercise in better macro-
economic Management
The total size of the Plan was fixed at Rs. 1700.5 billion. The size of public sector investment is
estimated at Rs. 752.1 billion while private expenditure is placed at Rs. 984.4 billion. Overall
GDP growth rate increases from 4% in 1993/94 to 7% in 1997/98.
The target set for improvement of industrial sector was to achieve 9.4%














23
Conclusion
During 1965-66 there is increase in the production of tea, salt, cotton cloth and yarn,
board, caustic soda, cement and cycle rubber tires and tubes. The increase in the quantum
index of manufacturing industries from 100 in 1959-60 to 201.7 in 1964-65. Growth in 68-69
was 7.4% that was previously 7.8%. And in 49-50 the share go agriculture was standing 60%
which came down to 46% in 68-69. During 1967-68, substantial gains were also recorded by
cotton yarn and cloth fertilizes and chemicals, writing and printing paper etc. The growth rate
of large scale industrial decline from 13.9% in 1969-70 to 2.8 in 1970-71 and showed a negative
growth rate of 5.6 percent in 1971-72.the negative growth in this year was due to the war with
India and separation from the Bangladesh where exist the big industry of jute.
Industrial sector had all along been leading sector in terms of sustain growth. Value
added fell by 6.8%during 1971-72 compared to depress based of 1970-71 when the growth was
only 1.2%.Steady growth in 1973-74. Different factor, like war with India and tight credit polices
and East Pakistan crisis growth decline 6.8% in 1971-72. Steady improvement or recovery in
1972-73. Manufacturing sector slow-down during 1974-75 because low level of investment and
shortage of raw material. Textile has heavy weight in total industrial production. 1974-75 there
was also difficult when value added project to grow by 10% in the LSM sector recorded
negative growth of 1.7%. in 1976-77 During this time manufacturing sector continue to remain
under pressure due to various national and international factors.
In July 1978, the interest rate on loans for fixed investment in industry and agriculture
was reduced from 12.5% to 11%. In 1984- 1985 manufacturing growth was about 8.6% after a
slow down last fiscal year which was 8.1%.During 1985-86, GDP for manufacturing output has
been 19.9%. During this year the manufacturing is expected to grow by 8.2% as compared to
8.6% of previous year. The manufacturing output has grown by 7.4% in 1986-87 as compared to
7.8% in 1985-86. This year 1987-88 show that the output has grown by 7.6% .The rate of
growth in large-scale industries during 1987-88 was 7.4
During 1993-94 policies of privatization, deregulation and market friendly environment
were reinforced. A new concept of public-private partnership was also introduced to enable
private sector to play a key role in social sector growth. Manufacturing during 1995-1996 grew
4.8%. That was previously 2.9% in 1994-1995. The large scale manufacturing grew by 3.13%
during 95-96. . In 1996-97 small scale manufacturing maintained its growth. But large scale
declining by 1.43% in value added. And over all growth of manufacturing sector was 1.78%
which was previously 4.4%.
Large scale manufacturing sector grow a dominant improvement with 6.19%. That was
previously 2.29%.
24
Manufacturing sector overall growth was 6.5%. In 2000-01 manufacturing staged an
impressive recovery and it grew 7.1% with comparison to last year 1.4%. In 2001-02, LSM
targeted to grow by 6.5% but due to event of 9-11 it grew only 4%. The year 2002-03 become
the best performing year beside 2000-01for manufacturing sector since 1987-88.
Manufacturing grow by 7.7% with the contribution of 8.7% by LSM
We can see the trend according to this law and order situation. And we can also observe
that if there is political stability then either there is the recession but it does not effect the
growth much. In 1999-2000, the overall manufacturing has grown by 1.6%. And the
performance of the LSM was very weak and it shows a growth of 0%. The factor which affects it
more was massive decline in the sugar cane production which leads toward decline in the
production of sugar.
25
Recommendations
As we know that the government is not strong enough and does not have enough
resources to boost up all the sectors of economy. Thats why they should go for the
unbalanced growth where investment is to be invested in one of the leading sector that
is textile sector that ultimately results in improvement to the all lagging behind sectors
that are agricultural sector, Industrial sectors, small and large goods manufacturing
sector etc.
About 30 to 40 percent of the GDP ratio is to be invested in one sector which will result
the country to go out from the vicious circle of poverty and extension in the markets
when the economies of scale achieved rather bit by bit. That will result in increase in
demand side, increase in production function and supply of savings.
There should be proper the law and order situation in the country for the purpose of
abolishing the bribery, Corruption, terrorism and other social and economic evils.
The Govt. should encourage the foreign investor to invest in the country and should
restrict the local investor to invest only in Pakistan.
Govt. should not fully dependent on the agrarian industries. They should also
encourage the other sectors in the industry like IT sector, Automobile sector and others
26
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27
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