Agriculture in Pakistan and its Impact on Econom

Agriculture is considered the backbone of any economy and it is also the most

important sector of Pakistan’s economy. The purpose of this research is to analyze the

Pakistan’s agriculture and its impact on economy. This study also highlights the

agricultural challenges and its possible solutions. Time-series data is used in this paper

and data is collected from different articles, websites and reports. The agriculture sectors

i.e. major and minor crops, fruits, livestock, fisheries and forestry are studied in this

research paper. There is some agriculture problems i.e.; limited water, poor

management, natural calamities and others which have negative impact on Pakistan’s

economy. The findings shows that due to agriculture problems there is fluctuations in

Pakistan’s economic growth (GDP) thus, Pakistan’s economic growth is going to

slowdown. Total factor of production is also going to slow down due to these instabilities.

Keywords: Agriculture, Economy, Major Crops, Fruits, Livestock

1. Introduction

Agriculture plays a crucial role in the economies of least developing countries (LDC)

like Pakistan. Agriculture is a fundamental part of Pakistan’s economy. Pakistan’s

agricultural contribution to Gross Domestic Product GDP is 21% with an annual growth

of 2.7% [1]. Agriculture provides an employment opportunities for 44% of the labor force

and 62% of the rural population depend upon this sector for their livelihood. Agriculture

is an important sector in which our modes of life and business innovativeness combine

together. It has manifold roles in the economy of any nation and these roles including

food security, poverty reduction, industrial revolution and economic growth especially in

developing countries [2]. Agriculture is that where basic and economic reproductions

intertwine with each other. The significance of agriculture can be seen in economic sector

from three perspectives

, 1) to provide food to nation and filaments for domestic industry;

2) means of earnings foreign exchange; and

3) provide goods and services in domestic

industries and international marke of Economic Planning in Pakistan

 . Agriculture and Pakistan’s Food System

Agriculture is an important factor in poverty reduction, improved country’s economy.

Land and water is important resources for agriculture and food production heavily depend

on these resources. Pakistan’s population increasing day by day and the demand of food

increase every year. Food, fiber and shelter are important sources for economy and these

resources increased in every year with increased populations. Approximately, 43% of

wheat and 90% of rice is produced and consumed in Asia. Globally, the availability of

food depends on population growth, climate change, natural disasters, war and civil

unrest. The history of national economic planning in Pakistan is divided in the following periods:
Crops Situation

Pakistan’s agriculture is based on major crops e.g. wheat, rice, sugarcane, cotton and

maize which account for almost 24% of the value added in overall agriculture and 4.67%

of the GDP. Minor crops includes Bajra, Jowar, mash and gram etc., which accounts for

11.36% of the value added in overall agriculture and 2.25% of GDP. Livestock

contributes 58.55% to agricultural value addition and 11.61% to GDP. Forestry

contributes 2.06% to the agriculture vale addition and 0.41% to the GDP. Fishing adds

2.17% to overall agriculture and 0.43% to the GDP.

. A) Major Crops

i) Wheat

Wheat is the most widely demanded food grain crop of the world. It is the largest grain

crop and main country’s staple food. Its contribution to GDP is 3.1% and 14.4% to the

value added in agriculture. The size of the wheat crop is roughly estimated that it increase

by 11.7%. Wheat is grown in wide range of area and the climate for wheat is between the

latitudes of (30º to 60ºN) and (27º to 40ºS). Wheat is grown from aquatic level to more

than 3000 m.a.s.i in elevation. The best growing temperature for wheat is about 25ºC,

availability of minimum growth temperature of (3ºC to 4ºC) and maximum growth

temperature of (30ºC to 32ºC) respectively. Wheat is grown in large range areas, where

drizzle range from (250 to 170 mm) and modified a large range of moisture conditions.
Pakistan is the 10th largest wheat-producer country, in terms of total production, area and

yield per acres in the world. In Pakistan the average per capita consumption of wheat is

about 125 kg/year and 60% of the daily food of common man. Wheat is the crucial food

of the population and it occupies a central position in agricultural policies of the

government [9].

ii) Rice

Rice is a most important food staple and cash crop of Pakistan. Rice is the 2nd food

staple crop of Pakistan after Wheat and major source of foreign exchange earning product

after cotton. Rice has a share of 0.6% in GDP and accounts for 3.1% in the value added in

agriculture.

Rice is grown under miscellaneous climatic and better soil conditions in Pakistan.

Pakistan is also famous for basmati and non-basmati with long grain rice which is divided

into four ecological zones.

Cotton

Cotton is the most important cash and fiber crop of Pakistan. Pakistan is the 4th largest

producer and 3rd largest consumer of cotton in the world. Pakistan’s cotton industry is an

important part of the economy. It plays a major role in foreign exchange earning of the

country. It constitutes 55% to the means of earning, 8.2% of the value added and 2% of

GDP of the country. Cotton is based on textile and cloth, its constitute 46% of the total

manufacturing and 40% of the employment. Pakistan is the third largest exporter of the

raw cotton and 9% of the global textile industry share. Cotton is sown in tropical and sub-

tropical areas; the temperature for cotton crop is required (21º C to 30ºC) and rainfall of

(50-100) cm in Pakistan.

iv)Sugarcane

Sugarcane is also high value cash crop and vital for sugar related industries. It has

significant effect for national economy of the country. Sugarcane is the crucial source of

sugar in Asia and Europe. Generally, it is grown in the tropical and subtropical of the

southern fraction because it requires a wide range of climate. Sugarcane is an important

cash crop in Pakistan and in several countries of the word. It is the 2nd largest cash crop of
Pakistan and added around 3.6% of Gross Domestic Production GDP [10]. Pakistan is the

th largest producer of the sugarcane in the world. Pakistan is geographically based in

subtropical barren zone and situated (between latitude of 25º and 36º N) and (longitudes

of 61º to 75º) E in the Western Zone of South Asia.

Vi Maize

Maize is a significant food grain and a lot of products are prepared from it. It

contributes 2.2% to the value added in agriculture and 0.4% in GDP. Maize (corn) is the

most important commercial crop in Pakistan as compared to other food grains. Pakistan is

the 4th largest producer of maize. Maize is sown under diverse climatic and soil conditions

and Kharif (monsoon) season is suitable for crop. Maize is grown in warm season, grows

from sea level to 3000 M height and the temperature for this crop is available from (21ºC

to 27ºC), but it can bear high temperature about 35º Period of economic coordination (1947-53)

Fruits

A) Fruits

i) Mango

Mango is one the most enticing, hot and steamy fruit in all over the world. Mango is

called “king of fruits” in worldwide and it has different varieties with different colors,

shapes and size. Pakistan is the 4th largest producers of mangoes in the world. In 2011-12,

Pakistan produce mango 1.78 million. Mangoes were exported 0.134 million tones and

their revenue was $38 million [13]. In 2016, the production of mangoes is expected to

increase by 40% against the last year [14]. Pakistan exports mango to UAE, Europe, and

Saudi Arabia, Hong Kong, and Canada. Period of planning board (1953-58)

Ii Apple

Apple is generally known as the “sweet gold” and the most famous fruit around the

globe. According to the statistical report, Pakistan was 25th largest producer of apple in

the world. During the year of 2013-14, the cultivated area for apple was 110,000 hectares

and the production of apple was 556,000 tons. Pakistan has different varieties of apple
e.g. Amri, Gacha, Kaja, Kulu, Red delicious, Golden delicious and Kashmiri. Pakistan

exports apple to China, India, Iran and Russia and importing partners are Iran, New

Zealand, South Africa and Italy.

iii) Orange

Orange is a fresh fruit and utilized in a huge quantity in the world. Pakistan is counted

as 6th largest producer of orange. In 2012, the area and production of orange was 160,000

hectares and 1.5 MMT per annum. During 2013-14, Pakistan exported 40,500 tons to

Indonesia. Pakistan exports oranges to different countries i.e. UAE, Saudi Arabia and Sri

Lanka etc.

iv) Banana

It is famous fruit in Pakistan and the available area for banana is almost 34,800

hectares with production of 154,800 tons. Pakistan is facing problems to produce banana

since post-harvest management and export to international markets due to traditional

technology and lack of awareness.

v) Guava

It is also a popular fruit in Pakistan. Guava is produced under the area of 61.6 thousand

hectares and the annual production is 549.5 thousand tons with yield of 8920kg. The

production of guava increased 19,000 tons to 552,000 tons from 1958 to 2008 in Pakistan

and its growth rate was 6.9% annually. Guava is exported to UAE, UK, Saudi Arabia and

Qatar whereas,

5. Live Stock and Poultry

i) Live Stock
Livestock sector plays a crucial role in agriculture because it leads towards the rural
socio-economic development for rural people. Almost 8 million families are attached with
livestock and earning 35% of income from livestock production activities. It is important
for the livelihood of rural low income poor people in the country. It is considered the
source of cash income and sometimes it considered the only income earning source for
the rural people. It can play a big role in poverty alleviation and foreign exchange
earnings for the country. Livestock contributed almost 58.6% to the agriculture value
addition and 11.6% share of total GDP during 2015-2016 as compared to the 56.4% and
11.7% during the adjacent last year, respectively. When the population increase, they
changes eating patterns, rise in per capita income and export opportunities are ornamental
the demand of livestock and its products in the country. This sector production can be
 further improved by employing modern management practices, artificial insemination
services, better medical facilities and better animal breeding practices.
ii) Poultry
Poultry is one of the booming and vibrant segments of livestock in Pakistan. It creates
job opportunities (direct/indirect) for more than 1.5 million people. Recently, a huge
investment is being carried out in this sector. Pakistan is the 11th largest poultry producer
in the world with production of 1.02 billion broilers yearly. Poultry not only provide
balancing force to have a check on the prices of beef and mutton, but also behaving as
backbone of agriculture sector because it consumes above 7 million metric tons of
agricultural products. Poultry meat is 30% of the total meat production in the country.
This sector displayed a growth of 8 to 10% yearly, which shows the inherent potential in
this sector. The poultry contributes 1.4% in GDP during 2015-16, whereas it contributed
in livestock and agriculture value addition was 11.7 and 6.9% respectively.
iii) Fisheries
Fisheries are also considered an important agriculture sector and it is the main source
of livelihood for the coastal areas. Its contribution to GDP is although very small but it
provides substantial part to the national income through exports earning. A total of 91,965
MT of fish and fish products were exported during 2015-16. Pakistan export fisheries to
China, Middle East, Thailand, Malaysia, Sri Lanka and Japan etc. Pakistan exported
99203 MT of fisheries and earned US $ 253,497 million during the year of 2014-15. This
sector can be further improved by using new fishing technologies, development of value
added products and improving the socio-economic conditions of fisherman’s community.
iv) Forestry
Forests are the main source for the Pakistan’s environment and it creates socio-
economic challenges for next generations. Overall Pakistan forest resources are limited as
less than 4% of land in Pakistan is covered by forests. However, forestry in Pakistan is
rich in terms of biodiversity and provides a unique blend of trees, shrub, grass and animal
species.

7. Issues and Challenges of Agriculture in Pakistan

Agriculture problems in Pakistan disturb the economic growth, in 1947, the

contribution of agriculture towards GDP was 53% but it fall by 21% in last year.

Pakistan’s economy depends on three sectors industry, commerce and agriculture and

these sectors are interconnected with each other’s. Agriculture effects on these two

factors, but it faces many problems. Period of Planning Commission (1958-68)

i) Irrigation Problems

In Pakistan water wastage is lofty and people use antiquated techniques of flood
irrigation in which wastage of water is almost 50 to 60%. Developed countries use seep

irrigation system to safe the water, however this system not only safe the water but also

provide the water according to the requirement of plantations. Unfortunately, shortage of

water becomes main issue in this country and the construction of dams has been stopped

after two dams.

ii) Insufficient Infrastructure

Mostly crops are cultivated in rural areas but in village road conditions are bad and

people also face lack of granule issues. In rural areas there is poor infrastructure i.e.

insufficient transportation, shortage of electricity, uneducated people, lack of storage

facilities and sanitation and health problems, these issues create disturbance in the growth

of agriculture

iii) Salinity and Water Logging

Salinity and water logging is a small problems in agriculture salt appeared on the

exterior of land and automatically it affect the crops. It affects the land about 0.10 million

per year and it is not only effect on land but also give less production. Mostly cultivated

lands in rural area become fatality of this dangerous disease due to the shortage of cannel

water. It is estimated that in Pakistan 25% of area is affected form salinity and water

logging.

iv) Traditional Methods of Farming

Pakistan’s famers use traditional methods of farming because they are illiterate. In

some areas automation is increasing but some areas old method is used for production.

These old techniques decrease the production and therefore the competition level is low in

international market. The average crop in Pakistan is just 1/4th and low yield per hectare

due to old machines in Pakistan.

v) Insufficient Supply of Agriculture Inputs

The supply of advanced agriculture inputs i.e. compound fertilizers, bug killers, latest

mechanism, high yielding variety (HVY) grains etc. these are costly, rough and
unsatisfactory in Pakistan. Only 10 units of fertilizers produce in Pakistan. High yielding

variety (HYV) seeds are not available so farmer use low quality of seeds in farms to

increase production.

vi) Lack of Cultivated Area

Approximately, Pakistan’s total area is 79.6 million and only 23.7 million hectares area

is used for farming. However, 8 million hectares area is inactive and not used for

agriculture due to land holdings. Landholdings are divided into small parts because of

enormous population and land division according to the law of heritage. Moreover, rich

farmer holds only 2 hectares of area for cultivation and they use modern technology in

their farming.

vii) Financial Condition of Farmers

Pakistan’s farmer are financially weak and poor they born in liability, grow in debt and

dies in debt. Mostly 57.4% farmer adopts feudalism without any charges [20]. Moreover,

there is lack of credit facilities for farmers. So, credit facilities are not easily available for

them and 50.8% farmer suffered from loan. The interest rate is high and loan is not

available on time. The market prices of agriculture goods remain unstable therefore,

farmer cannot get reward due to less and spoiled production, so they are miserable. In

Pakistan there is joint family system, so it’s a big problem in agriculture and their income

is not enough to support the big family. However, they could not save for future and

invest due to big family.

Recommendations and Solution for Agriculture Problems

Pakistan should construct dams and barriers over river because floods and heavy rains

could damage the agriculture productions.

Mostly farmer are illiterate and untrained in rural areas, so government should open

education program centers for farmer and trained them about farming.

There are no price policies for farmers to get reasonable prices in crops so government

should maintain logical prices of production to set living standard for farmers.
Pakistan should invest and use latest machinery to overcome the agricultural problems

and in this way they can boost production’s quantity and quality.

Agriculture sectors i.e., livestock, fisheries and poultry based on industries so

government should recover these sectors. Government should establish research centers to

overcome the agriculture problems.

In Pakistan there is no high yield variety of seeds so government should require (HYV)

of seeds at low prices. Government should control water logging and salinity issue

because it is destroying the crops for it they should repair tube wells and cannels.

Pakistan should improve irrigation system and introduce agriculture zones.

Government should make new policies and programs to overcome the agricultural

problems.

9. Conclusion
The contribution of agriculture is important for Pakistan’s development. Agriculture

sector is a spine of economy and it is the main source to develop the economic growth of

any country. Agriculture not only fulfills the domestic needs but also provide inputs and

outputs for industries i.e., textiles etc. Pakistan is an agrarian country but facing some

problem such as low production, food insecurity, inefficient management in agriculture

sector, and their agriculture system is complex and therefore their economy is going to

slowdown. The competition level in international markets is low due to less production

and poor quality. Therefore, government makes some strategies to improve the agriculture

system i.e., to make an investment for farmers, increase trade, and use natural resources.

Pakistan should improve both public and private sector for the improvement of agriculture

system.

History of Economic Planning in Pakistan

The history of national economic planning in Pakistan is divided in the following periods:

1. Period of decline of Planning Commission (1968-77)

2. Period of revival of Planning Commission (1978-88)

 3. Period of (1988-98)
4. Period of restructuring of economy (1999-2008)

• Shortage of trained staff,

• Non-availability of accurate and reliable data,

• Uncertain conditions in the planning machinery

• It was regarded as a rivalry between Ministry of Finance and the State Bank of Pakistan

• Political instability

• Annual economic planning was never seriously followed

During this period, the First Five-Year Plan was made. Its implementation suffered due to rapid changes
in government and a lack of political support.

1. Period of planning commission (1958 – 1968): The third period of the planning process began in
October 1958 with the assumption of power by the military government of Ayub Khan. The new
regime chooses to make economic development through a marked economy and reliance of the
private sector as its primary objective. The new government gave proper attention to achieve
the following targets:
• Rapid industrialisation in the country,

The status of the Planning Commission was raised to a Division in the President’s secretariat. The
President himself assumed the chairmanship of the Planning Commission and Deputy Chairman, with
the ex-officio status of a minister, was made the operational head of the Commission. Provincial
planning department was organised. The Planning Commission was also provided the secretariat for
National Economic Council (NEC) which looked after the day-to-day work of NEC and was also
responsible for final approval for annual development.

During this period the Second Five-Year Plan (1960-65) was made. It was so successful that Pakistan led
to an example for hunger nations of the world. But unfortunately Pakistan had to fight war against India
in 1965. Then there was a hue and cry against Ayub government and another government got the
power.

2. Period of decline of planning commission (1968 – 1977): This is the period of decline of Planning
Commission as an important decision-making body coincided with the fall of Ayub Khan’s
government. During the Yahya Khan period (1969 – 1971), the serious planning on national
level was completely ignored. The Third Five-Year Plan (1965 – 1970) was virtually abandoned
by the Yahya Khan’s government. In 1970, the Fourth Five-Year Plan (1970 – 1975) was made
and it was also a big failure because of the worst political conditions and instable government
policies. In 1972, the newly elected government of Z. A. Bhutto decided to run the economy
through annual planning, rather than through a comprehensive five-year plan. During the same
year, the Planning Commission was placed directly under the control of Ministry of Finance as a
Division. During the period from 1972 to 1977, the Planning Commission, with very less powers,
have very few favourable economic decisions. In other words, the Planning Commission was
powerless and ineffective.
 3.

During this period, two Five-Year Plans were formulated, i.e., Fifth and Sixth. In 1978, the Fifth Five-Year
Plan to cover the period of 1978 – 1983 was published. But the Government failed to pursue the plan
mainly because of uncertain political as well as economic conditions at that time. The Sixth Five-Year
Plan was formulated in 1983 to cover the period 1983 – 1988. At that time, Dr. Mahbub-ul-Haq was the
Finance Minister. He formulated the plan and because of his great efforts, this plan was a success.
During his tenure, the Planning Commission has played a vital role in effectively formulating and
implementing the economic planning. Not only the Sixth Five-Year Plan, but also the annual plans were
formulated by the Planning Commission.

4. The period of (1988 – 1999): The period of 1988 to 1999 the period of political and economic
instability. During this period, four elected governments were dismissed by the President on the
charges of corruption. The role of Planning Commission was over-shadowed by political
decisions. Its role was just limited to the preparation and submission of reports. It has nothing
to do with the implementation of planning.

The Seventh Five-Year Plan was formulated during the Zia-ul-Haq period. But after his death, in 1988,
the newly elected government of Benazir Bhutto took over the charge and so the Seventh Five-Year Plan
has never been implemented. After the fall of Benazir’s government in 1990, Nawaz Sharif’s
government came into power. During his tenure, he introduced privatisation, deregulation, and
economic reform aimed at reducing structural impediments to sound economic development. His top
priority was to denationalise some 115 public industrial enterprises, abolishing the government’s
monopoly in the financial sector, and selling utilities to private interests. slipped down to 17.8 million
tons in the following year. Similarly the target of non-traditional oilseeds, grape and mustard was set at
0.4 million tons which was far below the national requirements. Likewise, the projected plan period
target of agricultural credit of Rs 80.5 billion could not be achieved as the maximum credit given during
the plan period was Rs 37.7 billion and most of which went to the influential feudal lords and politicians
rather than to the common farmers. The Ninth Five-Year Plan was formulated by Nawaz Sharif
government to cover the period 1998-2003. Following were the priorities of Ninth Five-Year Plan:

(a) Maintenance of fiscal deficit at a sustainable level,

(b) Maintenance of GDP growth at 7% p.a.

© Investment in physical infrastructure,

(c) Export-led industrialisation,

€ End of agriculture-water dichotomy,

(f) Developing a civil society, etc.

5. Period of restructuring of economy (1999 – 2008): In October 1999, the Nawaz Sharif
government was dismissed with the military coup by Chief of Army Staff, General Pervez
Musharraf. The entire country was in a state of jeopardy. Before that, the businessmen have
already lost their confidence due to economic instability with the Nuclear Test, freezing of
foreign currency accounts, devaluation of rupee, and the Kargil War in 1998. Therefore, the
targets of Ninth Five-Year Plan were never been well implemented.

y quickly assembled a team of highly trained economists and extremely talented civil servants. To
address the issue of the severe macroeconomic crisis and place the economy on a path of sustained
higher growth, financial stability, and improved external balance of payments, the economic team
launched a comprehensive set of economic stabilization and structural reform measures. The
government believed that macroeconomic stability was vital for achieving higher and sustained
economic growth, creating employment opportunities and preventing people from falling below the
poverty line. It is with this view that a series of structural reform measures were initiated in such areas
as privatisation and deregulation, trade liberalization, banking sector reform, capital market reform, tax
system and tax administration reform, agriculture sector reform etc. As a result, Pakistan’s economy
started showing signs of improvement by 2000-01 well before 9/11. Manufacturing sector grew 11% in
2000-01 against 3.6% in 1998-99, revenue collection increased to Rs. 396 billion against Rs. 308 billion,
debt servicing declined from 64% to 57% of total revenue, export increased from $ 7.8 billion to $ 9.2
billion. These are undeniable facts and well documented in official publications. These improvements
had taken place much before 9/11.

The era of General Pervez Musharraf is known as the era of economic and political restructuring. During
this era, the economy grew at an average growth rate of 5.1% (started from 2.6% in 2000-01 to 8.4% in
2004-05). President General Pervez Musharraf invited Mr. Shaukat Aziz to take charge of the Ministry of
Finance in November 1999.

In 2005, the Government authorised the Planning Commission to issue the Tenth Five-Year Plan namely
‘Medium Term Development Framework 2005-10’. The Medium Term Development Framework (MTDF)
2005-10 had been conceived in the light of recent socio-economic performance of the country,
continuing supportive public policies and challenges and opportunities emerging from the global
economy. Wide-ranging economic and financial reforms have made the economy open, liberalised and
market friendly. As a result, private sector has begun to play an active role in shaping structural changes
in the economy. The principal objective of the MTDF was to attain high growth of 8.2 percent by the
terminal year 2009-10 with a sustained annual average growth of 7.6 percent during the five-year period
without compromising macroeconomic stability.

The plan had also anticipated the share of manufacturing sector in GDP to increase from 18.3% in 2004-
05 to 21.9% in 2009-10. It was also anticipated that the production base would be expanded through
the development of engineering goods, electronics, chemicals and other hi-tech industries. The
Government was also anticipating fastest growth of IT/Telecom sector. Pakistan had seen an explosive
growth in IT/Telecom sector in the last few years. The number of mobile phones achieved their 2007
targets two years earlier, and the recent deregulation of LDI, WLL and other sections had served to
provide faster, better and wider coverage, all at lower cost. Nearly 60,000 IT professionals were
operating in the country with an annual turnover of Rs. 12 billion of which 15% was exported. The plan
had also estimated that major exports (gross) would increase from Rs. 14.05 billion in 2004-05 to Rs.
28.12 billion in 2009-10.
Planning Machinery in Pakistan

Following are the planning agencies in Pakistan:

National Economic Council (NEC):

The planning machinery in Pakistan is headed by the NEC as the supreme policy making body in the
economic sphere. It has the President as the Chairman and all Federal Ministers, incharge of
development ministries and provincial governors as members. In addition, a number of other persons
are invited to attend the meetings of the NEC as and when the agenda relates to matters concerning
them.

Functions of NEC:

(a) To review the overall economic situation in the country

(b) To formulate plans with respect to financial, commercial and economic policies and
economic development

© To approve the Five-Year Plans (MTDF), the Annual Development Plans (ADP), provincial
development schemes in the public sector above a certain financial limit and all non-profit projects.
It may appoint committees or bodies of experts as may be necessary to assist the council in the
performance of its functions. NEC discusses different cases and makes decisions. To ensure
implementation of the decisions, the secretary of each Ministry is expected to keep a record of all the
decisions conveyed to him and to watch the progress of action until it is completed. The Cabinet
Secretary is also expected to watch the implementation of the council decisions.

Executive Committee of NEC (ECNEC):

The body directly below the NEC is the ECNEC. It is headed by the Federal Minister for Finance, Planning
and Development. Its members include all Federal Ministers incharge of development ministries,
provincial governors or their nominees and provincial ministers, incharge of planning and development
departments.

Functions:

(a) To set up development schemes (both in the public and private sectors) pending their
submission to the NEC.

(b) To allow moderate changes in the plan and sectoral adjustments within the overall plan
allocation.

© To supervise the implementation of economic policies laid down by the Cabinet and the NEC.
Annual Plan Coordination Committee (APCC):

Another body concerned with economic policy is the APCC which is a purely advisory body responsible
for advising the Cabinet and the NEC regarding the coordination of policies. It is headed by the
Secretary General, Finance, Planning and Economic Coordination. All federal secretaries of development
ministries, heads of provincial planning and development departments and heads of the State Bank, the
Board of Industrial Management and PIDC are its members.

Central Development Working Party (CDWP):

Below ECNEC is the CDWP which is responsible for the scrutiny and sanction of development projects.
The Secretary, Planning Division, is the president of CDWP. Its members include federal secretaries of
the concerned departments, federal finance secretary and chairman of the provincial planning and
development departments.

The development schemes of federal ministers costing over Rs. 10 million and of the provincial
governments costing over Rs. 50 million are submitted to CDWP for approval.

The responsibility for the overall economic evaluation of Annual Plans remains with the Planning
Division which places a report each year before the NEC evaluating economic achievements and failures.
Mid-Plan reviews outlining the progress of the Five Year Plan are also published by the Planning
Commission.

A Critical Appraisal of Planning Machinery in Pakistan

Following are main hindrances in the way of effective planning in Pakistan:

(a) Administrative obstacles of planning: One major obstacle which has stood in the way of
establishing a sound, efficient and independent planning authority is the lack of an effective
administrative machinery as this has greatly limited the tasks of development policy and
planning. Some of the factors which still continue to be major hindrances and act as
administrative obstacles and bottlenecks to planning are discussed below:

(i) Lack of competent personnel: One of the major obstacles in the way of an effective planning
machinery is the lack of competent personnel. Good and highly qualified economists,
technicians, planners, etc. do not join government service because of lack salaries and facilities.

(ii) Dilatory procedures: In Pakistan, documents and files must follow a prescribed series of steps
through administrative layers. It has been pointed out that often there seems to be a disposition to shift
the file and documents from one office to another, or from one ministry to another. The resultant
delays are sometimes unbelievably long.

(iii) Lack of coordination: In many cases, the coordination of development activities has been extremely
difficult because responsibility for different aspects of a project or programme are divided among many
ministries and agencies. So it becomes, sometimes, very difficult to carry on programme according to
policy.
 (b) Inadequate preparatory work on projects: When a potentially desirable project has to be
identified, a feasibility study has to be made to determine whether it is practicable and justified.
A feasibility study involves a detailed examination of the economic, technical, financial,
commercial and organisational aspects of a project.

According to Planning Commission of Pakistan, preparatory work on public projects in the country was
frequently lacking. So due to inadequate preparatory work on projects, our plans have been failed in
achieving their targets.

© Lack of implementation of plans: A major reason for the lack of implementation of the country’s
various five year plans has been the widespread failure of the governments of the day to maintain
discipline, implicit in their plan. What is planned and what is done in many cases bears little relationship
to each other. At times it almost appears that plans are prepared by a planning agency in one corner of
a government and policy is made by various bodies in other corners.

(c) Lack of evaluation of plan progress and project implementation: Flexibility is an essential
element of development planning because in many cases changes in economic conditions make
deviations from original plan unavoidable. A central planning agency must, therefore,
constantly review and assess progress in relation to events.

Unfortunately, whenever evaluation has been prepared by the country’s planning authorities, they have
been issued long after the end of the period to which they refer. In many cases the mid-term reviews of
five year plans have been published almost near the end of the plan period and the final reviews of the
plan have come long after the new plan have been launched and, therefore, been of little use to
formulating targets and policies for the new plan. The need for a good reporting system on plan and
project implementation is, therefore, an essential prerequisite for a good evaluation system.
An Operational Approach to Plan/Project Appraisal

A development plan is essentially a forward looking policy framework which envisages a concrete and
prioritised but somewhat flexible programme of action to be launched in a dynamic situation to attain
specified economic and social objectives. A plan or a programme / project is ultimately as good as its
implementation since it is the actual achievement of the results in line with the targets and not merely
the targets set or the resources allocated that determine the degree of success or failure of the plan /
programme as well as its impact on the socio-economic life of the people. Thus, it is clear that only the
technically, financially and economically sound and viable projects, if properly executed in a coordinated
manner, can provide a strong edifice for the successful implementation of the plan.

Most of the developing countries still need to further evolve their development planning processes by
redefining their national objectives and searching for alternative strategies, programmes and projects
because it has been realised by most of them by now that the development planning adopted so far
could not achieve the desired results especially in the areas of social development and income
distribution. Recent international experience also shows conclusively that the formulation of technically
sound, economically viable and administratively feasible programmes / projects, their proper appraisal,
implementation and management are amongst the palpably weaker areas of development planning. In
numerous instances, projects included in the development plans have either not been optimally
implemented or even if implemented, have failed to yield the expected results on time. Similarly, such
other factors like deliberate under-estimating of costs and over-pitching of targets at the approval stage,
coupled with recent increase in input prices, have adversely affected the overall plan implementation in
most of the LDCs.

In recent years, increasing attention is being devoted to more systematic processes of planning and
decision making as a means of addressing the concerns of developing countries about the pace and
pattern of economic growth, the failure to achieve planned objectives, and the continuing financial and
economic crises. This approach has reinforced the case for greater depth in and a more systematic and
inter-related approach to the monitoring, evaluation and follow-up of all public policy actions. This
renewed urge is shared both by national as well as international agencies in order to up-grade the
developing countries’ status.
The United Nations International Development Strategy (UNIDS), therefore, emphasises that, to provide
increasing opportunities to all people for a better life, it is essential in the development planning to
bring about more equitable distribution of income and wealth for promoting both social justice and
efficiency of production, to raise substantially the level of employment, to achieve a greater degree of
income security, to expand and improve facilities for education, health, nutrition, housing and social
welfare, and to safeguard the environment. The International Development Strategy emphasises the
importance of national evaluation system. According to UNIDS, every developing country is needed to
establish a reliable and independent evaluation machinery or strengthening the existing one, in order to
ensure the implementation of development programmes.

Plan Preparation and Implementation Cycle:

The process of development appraisal and performance evaluation is an intrinsic component of

planning. The standard plan preparation and plan implementation cycle includes:

(a) Establishment of goals, objectives and targets;

(b) Formulation of strategies;

© Formulation of operating plans composed of policies and specific measures necessary to achieve the
real targets;

(c) Implementation of policies and measures to the plan;

€ Monitoring and evaluation of performance (both financial and physical) against targets;
(f) Adjustment of targets and/or plans as may be indicated by actual accomplishments and related
developments.