Pakistan Five Years Plan Overview

Table of Contents
ACKNOWLEDGEMENT...........................................................1
Abstract..............................................................................2
Introduction........................................................................3
Yearly Development Report Analysis....................................4
During 1961-62...........................................................................................................4
During 1962-63...........................................................................................................4
During 1963-64 ..........................................................................................................5
During 1964-65...........................................................................................................7
During 1965-66...........................................................................................................7
During 1966-67...........................................................................................................7
During 1967-68...........................................................................................................8
During 1968-69...........................................................................................................8
During 1971-72...........................................................................................................9
During 1972-73...........................................................................................................9
During 1973-74.........................................................................................................10
During 1974-75.........................................................................................................10
During 1975-76.........................................................................................................11
During 1976-77.........................................................................................................11
During 1977-78.........................................................................................................12
During 1979-80.........................................................................................................12
During 1981-82.........................................................................................................13
During 1982-83.........................................................................................................13
During 1983-84.........................................................................................................14
During 1984-85.........................................................................................................14
During 1985-86.........................................................................................................14
During 1986-87.........................................................................................................15
During 1987-88.........................................................................................................15
i
During 1988-89.........................................................................................................15
During 1989-90.........................................................................................................16
During 1990-91.........................................................................................................16
During 1992-93.........................................................................................................16
During 1993-94.........................................................................................................17
During 1995-96.........................................................................................................18
During 1996-97.........................................................................................................19
During 1997-98.........................................................................................................19
During 1997-98.........................................................................................................20
During 1999-2000.....................................................................................................20
During 2000-01.........................................................................................................20
During 2001-02.........................................................................................................20
During 2002-03.........................................................................................................20
Pakistan Development plans..............................................22
First Five Year Plan (1955-60)-An Erratic Beginning to planned Development.......23
Second Five Year Plan (1960-65)- An Experiment In ‘Functional Inequality...........23
Third Five year Plan (1965-70)- A Prisoner of Extraordinary Events.......................23
Fourth Five year Plan (1970-75)- A non-starter from the beginning. ......................24
Fifth Five Year Plan (1978-83)-A Return of the Medium Term Planning.................24
Sixth Five year Plan (1983-88)- Development of the people, By the people, For the
people.......................................................................................................................24
Seventh Five Year Plan (1988-93)-Precursor of a long Term vision........................25
Eighth Five year Plan (1993-98)- An exercise in better macro-economic

Management.............................................................................................................25
Conclusion.........................................................................27
Recommendations..............................................................29
Bibliography:.....................................................................30
ii
ACKNOWLEDGEMENT
Praise is to Allah Almighty, the one testing us all at all times and making decisions
about what we don’t know and can’t 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. Shahid Hassan 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.
1
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 1960’s to 2003. In this decade many up’s and down’s 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.
2
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.
3
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.
4
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 5th

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.
5
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.
6
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.
7
Investment: A comprehensive industrial investment schedule for the entire
third plane period aimed ensuring fulfillment planes investment target of 830
crores. It covered 200 items involving large medium and small industries the
investment allocation is rupees 1088.53 crores in the private sectors, 586.07
crores West Pakistan and 502.46 crores for East Pakistan.
Credits: Major allocations during this year from France 16.19 million $.
USSR 9.67 million $.UK 15.98 million $. WORLD BANK 9.18 million $ and
Belgium 4 million $. Total allocation increase from 89.21 million $ in this year
to 121.48 million $.
During 1967-68
The government entered into an agreement with the government of
Poland will provide the equipment required for the implementation of this
project and it consists of 2.6 crore expenditure. In western Pakistan during
this year 143 miles of new forest roads and bridle paths were constructed
and another 150 miles are expected to be constructed. This year
government had given the attention to developed heavy and more
sophisticated industries such as engineering, electrical equipment, machine
tools and petro chemicals etc.
During this year there is increase in the production of tea, salt, cotton
cloth and yarn, board, caustic soda, cement and cycle rubber tyres and
tubes. The increase in the quantum index of manufacturing industries from
100 in 1959-60 to 201.7 in 1964-65.
During 1968-69
Growth in 68-69 was 7.4% that was previously 7.8%. And in 49-50 the
share go agriculture was standing 60% which cam\e down to 46% in 68-69.
This trend towards diversification is also reflected in the pattern of exports
and imports the share of primary commodities, which was 95% of our
exports in 1950 to 1951 decline to 69% in 64-65 and future to
53% in 67-68 the rest being accounted for by
manufacture and semi manufacture. During
1967-68 and 1968-69 the increase in
manufacturing output in certain industries
was a quite impressive. Production of sea
salt and cigarettes have already exceed the
pain target, while the performance of
newsprints and mechanical paper was 47%,
8
cotton yarn 79.6%, white sugar 63.9%, vegetable ghee 68.6%, juice goods
53.4$%. 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 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.
9
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.
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.
10
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.
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.
11
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.
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:
12
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.
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.
13
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.
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.
14
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 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.
15
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%.
16
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
17
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)
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.
18
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.
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, LCV’S and bicycles showed nominal growth.
19
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, LCV’S, 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% 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
20
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).
21
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 Plan’s but going to take
specific and relevant part related to our topic from each Five Year Plan.
22
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.
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.
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
23
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.
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.
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).
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.
24
The industrial sector as a whole exhibited a growth rate of 7.7% per
annum against the Plan targeted of 9.3% per annum.
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.
The share of industry decreased from 5.1% in the sixth Plan to

2.0% in the seventh sector Plan.
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%
25
26
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
27
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%.
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.
28
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. That’s
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
29
Bibliography:
Books
• Dr. Aslam Muhammad. (1990),"Comparative Study of Pakistan’s Five Year

Plan." Development planning in Pakistan. Pg(35-58)
• "Pakistan Development Reports”. 1961-1962. Pg-12
• "Pakistan Development Reports”. 1962-1963. Pg(34-36)
• "Pakistan Development Reports”. 1963-1964. Pg(38, 40-43)
• "Pakistan Development Reports”. 1966-1967. Pg (25-32)
• "Pakistan Development Reports”. 1969-1970. Pg(26,27,31-370
• "Pakistan Development Reports”. 1971-1972. Pg(25,26)
• "Pakistan Development Reports”. 1973-1974. Pg( 32-34)
• "Pakistan Development Reports”. 1977-1978. Pg(35)
• Pakistan Development Reports”. 1980-1981. Pg(40-44)
30
• Pakistan Development Reports”. 1981-1982. Pg(37,40)
• Pakistan Development Reports”. 1985-1986. Pg(61)
31

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Table of Contents

Yearly Development Report Analysis....................................4

During 1963-64 ..........................................................................................................5

Pakistan Development plans..............................................22

First Five Year Plan (1955-60)-An Erratic Beginning to planned Development.......23

Second Five Year Plan (1960-65)- An Experiment In ‘Functional Inequality...........23

Third Five year Plan (1965-70)- A Prisoner of Extraordinary Events.......................23

Seventh Five Year Plan (1988-93)-Precursor of a long Term vision........................25

Eighth Five year Plan (1993-98)- An exercise in better macro-economic

would not be wrong.

life and professional career.

The study about Pakistan Economy related to Industry sector. The

Pakistan has a semi-industrialized economy, which mainly

Pakistan's average economic growth rate since independence has

Pakistan is aggressively cutting tariffs and assisting exports by

Guiding objective of government industrial policy to is to maximize the

Protection from foreign competition and the various fiscal and

Taking 1959-60 as the base year the index of industrial production

West Pakistan industrial development corporation:

Cement factories: a scheme for the 5th

Almost all industries contributed to the increase in production so much

According to central statistics office the index of production of

Heavy industry: A machine tool factory in Karachi already gone in

Strikes of labor also disturb the industrial production. Labor reforms

Decline export of cement fulfills the need of cement in the country.

During the period july 1974-march 1975 different items

Fertilizer: Increase in fertilizer production. The factories are working above

Vegetable ghee: The sharp increase of vegetable ghee production better

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

Safety Matches: Production of safety matches 20 % increased during

Index of manufacturing industries was 120.4 in 1974-75 and has been

Export of cotton yarn 186.2m in 1972-73 decreases to 143.7 in 1975-

Export of cotton clothes, 97.1 m 1975-76 increases to 99.2m 1976-77

Production of cotton yarn and cloth decreases by 18% in 1976-77 as in 1975-

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

Project of Fertilizers also continue to further broader the counties

Trend of Industrial Production

Cotton Textiles: The decline of 6.5% in the production of cloth is a follow-

Fertilizers: Fertilizers got a small decline of 2.2% in the production was

Policy/ Institutional Measures:

Monetary Incentives: Mandatory target was settled for small scale

Fiscal Incentives: With effect from September 4, 1978 compensatory

Measures to Encourage Industry:

The major additional fiscal measures to encourage private industrial

• Initial depreciation allowance on plant and machinery were raised from

• Monetary limit of investment rose from 45000 to 50000 RS.

Export processing Zone: To attract the foreign investors

Manufacturing accounts for 18.9 % of GDP, 55% of exports and 14.9%

During the first 9 months of 1987-88 out of 15 selected industries with

In the budget of 1988-89 large number of fiscal and monetary

Value added in large scale manufacturing during this year (1988-89)

Manufacturing sector was expected to grow by 5.70% and it had

The production index in this year was 192.1 as compare to 183.4 of

Manufacturing sector was expected to grow by 5.70% and it had

The production index in this year was 201.2 as compare to 192.1 of

The value added in manufacturing sector as hole grew by 5.6% during

The production of jute goods, phosphates fertilizer, paper all types,

Textile and ancillary industries affected by consequential increase in

Large scale manufacturing:

Textile industry is largest and important sub-sector of economy and