GOVERNMENT OF PAKISTAN

PlAN!N!NG COMM4SSION

THE SECOND

FIVE YEAR PLAN

JUNE 1960
 ON 21 June 1960, the Economic Council of the Government
of Pakistan accorded its general approval to the objectives,
principles, and programmes of development contained in the
Second Five Year Plan. The Council further decided that no
major departure from the Plan should be made without the appro-
val of the Economic Committee of the Cabinet and, in matters of
fundamental importance, without the approval of the Economic
Council.
 TABLE OF CONTENTS

PART I-THE PLAN AND ETS IMPLEMENTATION

C
H A
Pm 1.-Background. Characteristi cs and Size of the Plan ..
Review of the First Five Year Plan .. ..
Current situation .. .. .. i.
.
Characteristics of the Second Plan . .. ...
Strategy of the Plan .. .
. .. ..
Size of the Plan.. .. . . .. ..
Comparison of the First and Second Plans .. ..
Rationale and summary of sectoral allocations ..
Agriculture .. .. .. .. ..
Water and power .. .. .. ..
Industry . . .. .. .. ..
Fuels and minerals .. .. .. ..
Transpod and commurmications , .. ..
Housing and settlements .. .. ..
..
I

Education and training .. ..

Health. manpower. social service a$d Village AID
Physical targets .. .. .. .. ..
Internal consistency of the Plan .. . .
..
8.

Flexibility of the Plan .. .. ..

Structural changes in the economy .. ..
CHAPTER
2.--Resources and Financing .. .. ... ..
Resources .. .. .. .. ..
Gross capitd formation .. .. ..
Gross domestic savings .. .. ..
Foreign assistance .. .. .. ..
Fhancing .. .. .. .. ..
Public sector .. .. ... ..
Semi-public sector .. .. .. ..
Private sector .. . .. ..
Financing of the Provincial programmes ..
Estimates of gross national product .. ..
 3.--Fiscal
&W'~BR and Monetary Policy .. .. ..
Taxation policy .. ..
Review of preseat tax stmetwe
..
FuEuretaxpolioy .. ..
Additional taxation .. ..
Growth of tax revenues ..
Conclusion .. .. ..
Financial stability .. ..
Open inflation .. ..
Suppressed inflation. .. ..
Safe W t s of deficit financing..
Idationary danger .. ..
Policy against inflation ..
Price:assumptions for the Plan
Credit poliey .. .. ..
Comerciai banks .. ..
Spgcializea credit institutions..
Stock exchange .. ..
wurancs: .. ..
..
1.

Interest rate policy ..

Fiscal and monetary controls ..
Foreign exchange expenditure .. ..
Foreign exchzlnge earnings .. ..
Termsof trade .. .. .. ..
3alance of payments in the; F b t Plan ..
The impact of aid on the economy ..
Manee of payments in the Second Plan ..
Projections of foreign exGhgnge expenditure
Projections of foreign exchange eaaings
Commercid policy .. .. ..
Export policy .. .. ..
Import policy .. .. ..
Foreign exchan~ebudgeting and control
For@ exchange reserves .. ..
External aid requirements .. ..
s-ry .. .. .. ..
Machinery for planning and in implementation
Problem areas in planning and implementation
 Admh&ative orgmization and proeedures ..
Budgeting and ..
controls .. ..
The role of the public services
Organization and mthods
Personnel administration .. ..
..
..
..
..
..
......
Public corporations and authorities .. ..
@HAPTRR C . . ~ c h and Statistics .. .. .. ..
Research in s W scienes .. .. ..
Spwial libraries .. .. .. .. ..
Statistical development .. .. .. ....
Sbndard definitions and ~hssBcations ..
Statistical agencies .. .. .. ..
Training and weer service .. .. ..
Sfanding advisory ci)mcil .. .. ..
PART IL-DFNELOPMENT OF PHYSIC& RESOURCES

Policy and administration .. ..

Organization for fqpicultural development
Programme acceleration .. ..
Cooperative fanning and land management
' Samation programme .. ..
Crop production .. .. .. ..
Future requirements and produdion targets
Soarces of increased production ..
Development of new areas and colon%ation
~ e & m and or@ manures . .
Plant protwtion .. .. ..
Segd multiplication a d distribution..
Other improved practices .. ..
Economic incentives.. .. ..
Subsides .. .. .. ..
Mgchaabtion .. .. ..
Soils .. .. .. ..
Agxic3Ws;aJs.efltistics .. ..
Farm management ttnd mno& studies
~ ~ r i c u lmarketing
tu~ .. ..
food^ storage .. .. ..
Agrioultuml research .. ..
Animal husbandry .. .. . . .. ..
Breeding .. .. .. .
. . . ..
Disease control and preservation1of good stock .. ..
Animal nutrition .. .. .. .. ..
Dairying .. .. . . .. . . ..
Livestock products . . .. .. . . ..
Research .. .. .. . . .. ..
Training of personnel .. .. . . ..
Development expenditure .. .. . . ..
Range management .. .. .. .. ..
Forestry .. .. .. .. .. ..
General approach to forestry development .. ..
Surveys .. .. .. .. .. ..
Extraction and use . . .. .. .. ..
Afforestation and regeneration o . .. ..
Fasm forestry .. .. .. .
. ..
Afforestation of trees of special economic importance ..
Research .. .
. .. . . .. ..
Education and training .. .. . . ..
Forestry statistics .. .. .. .. ..
Parks and game sanctuaries .. .. .. ..
Soil conservation .. .. .. .. ..
Fisheries .
. .. .. .. .. ..
Programme for the Second Plan period .. ..
Marine fisheries .. .. .. .. ..
Inland fisheries .. .. .. .. ..
Marketing .. .. .. .. . . ..
Training and education .. .. .. ..
Research . . .. . . .. .. ..
Statistics .. .. .. .. .. ..
Private sector .. .. . . . . ..
Cooperative organization .. .. .. ..
Agricultural education .. .. .. .. ..
Rural credit and cooperative marketing .. .. ..
Proposals in the Second Plan . . .. . . ..
Taccavi loans .. .. .. .. ..
Agricultural Bank .. .. .. .. ..
Rate of interest .. .. .. .. ..
National credit survey .. .. . . ..
Warehousing corporation . . . . .. ..
Training . . . . .. . . .. ..
 Financial requirements .. .. .. 182
Land reforms .. .. .. .. .. .. 183
Land reforms in West Pakistan .. .. 184
Land reforms in East Pakistan .. .. 189

CHAPTER 8.--Water and Power .. .. .. .. .. .. 193-218

Development problems and possibilities .. .. ..

East Pakistan .. .. .. .. ..
The Indus Basin .. .. .. .. ..
Coastal and desert streams region .. .. ..
Progress in the First Plan period .. .. .. ..
Water .. .. .. .. .. ..
Power .. .. .. .. .. ..
Major First Plan projects .. . q .. ..
East Pakistan .. .. .. .. ..
.
West Pakistan ..
Summary of First Plan experience
Second Plan programme . .
..
..
..
..
..
.
..
..
.
.
....
Public sector investment .. .. .. . .
Private and semi-public sector investment .. ..
Investigations and surveys .. .. . . ..
Multipurpose development .. .. .. . .
Irrigation . . .. .. .. .. . .
Drainage. reclamation. and tubewells .. .. ..
Flood regulation .. .. .. .. ..
Open canals . . .. .. .. .. ..
Power .. .. .. .. .. ..
Machinery pools .. .. .. .. ..
Dredger fleet .. .. .. .. . .
Atomic energy .. .. .. .. ..
Meteorological service .. .. .. . .
Survey of Pakistan .. .. .. .. ..
Requirements of Personnel and key construction materials

Achievements since Independence .. . . .. .. 220

Criteria for industrial development in Second Plan period .. 221
Policies and methods of implementing the industrid
programme .. .. .. .. .
. . 223
Cost of the development programme .. . . . 229
 Development plan for selected industries ..
Food. beverage and tobacco manufacturhg
Textile manufacturing .. ..
Footwear and apparel . . ..
Wood and wood products . . ..
h l p . board. paper and paper products..
Printing. publishing and allied industries
bather and leather products .. ..
Rubber products .. .. ..
Chemical and petro-chemical industries
Non-metallic mineral products ..
Basic metal industries .. ..
Metal products industries .. ..
Jute baling .. .. .. ..
Cotton ginning .. .. ..
Filmindustry . . .. ..
Sports goods .. .. ..
Surgical and other instruments ..
Agricultural and industrial waste ..
Other products .. .. ..
Testing and research .. .. ..
Government investment in large scale industries
Small and medium scale industries ..
Zxpected results of the industry programme
C ~ ~ T 1OI.Fu~els R and Minerals .. .. ..
Progress under the First Plan .. ..
Long-term development objectives .. ..
Second Plan development programme ..
Exploration. prospecting. and development
Gas .. .. .. ..
cod .. .. .. ..
Peat .. .. .. ..
Iron ore .. .. .. ..
Chromite .. .. .. ..
Other minerals .. .. ..
Role of the private sector .. ..
Development of mining personnel ..
Ckwnm 11.-Tramport and Communications ..
Railways .. .. ..
Objectives in the Second Plan ..
....
 Works designed to improve movement of t d c ..
Rehabilitation of rolling stock and track
Other development .. .. ..
..
..
..
Technical personnel..
Electrification of railways
..
..
..
..
.... ..
..
Programme allocations
zorts .. ..
Karachi Port
..
..
..
..
..
..
..
. .
..
..
..
......
Chittagong Port .. .. .. .. ..
Chalna/Mangla Anchorage .. .. .. ..
Policy considerations .. .. .. ..
Plan allocations .. .. .. .. ..
shipping .. .. .. .. .. ..
Second Plan programme .. .. .. ..
&land water transport .. .. .. .. ..
.Roads .. .. . . .. .. . ..
..
Objectives in the Second Plan .. .. ..
Development programme .. .. .. ..
Village and forest roads .. .. .. ..
Xoad transport .. .. .. .. .. ..
policy recommendations .. .. .. ..
Development programme .. . . .. ..
+Civilaviation .. .. .. .. .. ..
Ground and navigational facilitie .. .. ..
Aircraft and air services .. .. .. ..
..
Posts. telegraphs. and telephones .. .. ..
..
Propsoals in the Second Plan .. .. ..
Postal services . . .. .. .. ..
'Local telephone system .. .. .. ..
Trunlc telephony .. .. .. .. ..
lntemtional telephony .. .. .. .. .
Telegraph services .. .. .. .. ..
Training . . .. .. .. .. ..
Workshops .. .. .. .. .. ..
Broadcasting .. .. .. .. ..
.. ..
1

Tourism . .. .. ..
Development programme .. .. .. ..
CHAPTJZR
12.--Housing and Settlements .. .. .. .. .. 321-328
Performance under the First Plan .. .. .. .. 321
Basic deveIopment .. .. .. .. .. 322
 Housing .. . . . . . . ..
Water supply and sewerage .. ..
The new Capitals and government buildings ..
Development in Special and Frontier.Areas .. ..
Development expenditure .. . . ..
PART 111.-HU1MAN RESOURCES AND WELFARE
Introduction .. .. .. .. .. ..

Dimensions of future growth .. .. ..

Migration and urbanization .. .. ..
Population problems and population policy .. ..
Population statistics and analysis . . .. ..
CHAPTER
14..Education and Training .. .. .. ..
Educational development during the First Plan period
Commission on National Education .. .
.
Programme for the Second Plan .. .. ..
Primary education .. .. .. ..
Secondary education .. .. .. ..
Teacher education .. .. . . ..
Technical education .. .. .. ..
Industrial training .. . . .. ..
Commercial education .. .. .. ..
Higher education .. .. .. ..
University research .. .. .. ..
Scholarships .. .. .. .. ..
Islamic studies .. .. .. . . ..
National languages .. .. .. ..
Promotion of art. culture and sports .. ..
Military training and scouting .. .. ..
Education of handicapped children .. .. ..
Adult education .. .. .. .. ..
Publicity for national development .. ..

Major objectives of the Plan .. .. ..

Family planning .. .. *. ..
Health facilities in the rural areas .. .. ..
Malaria .. .. .. .. ..
Tuberculosis .. .. .. .. ..
 small-pox .. ..
Leprosy .. ..
Trachoma .. ..
Mental health .. ..
Nutrition .. ..
Health education ..
School health .. ..
Health statistics.. ..
Medical education ..
Medical research ..
Hospitals .. ..
Mobile dispensaries ..
Medical stores .. ..
Special and Frontier regions
Private sector .. ..
CHAPTER 16..Manpower and Employment .. ..
Manpower plaMing .. .. ..
Improvements in manpower planning ..
Use of existing manpower resources ..
Labour standards and administration ..
Wages and social security .. ..
Labour-managementrelations .. ..
Programme analysis. labour statistics and research
Cost of the programme .. .. ..
CHAPTER
17..Social Service .. .. .. ..
Social service during the First Plan ..
Objectives in the Second Plan .. ..
Size. priorities. and targets of the programme
Training .. .. .. ..
Research .. .. .. ..
Administration .. .. .. ..
Urban community development . ..
Medical social work .. .. ..
Family and child welfare .. .. ..
Youth work and recreational services for children
Delinquency and probation .. ..
Services for the socially and physically handicapped
Grants-in-aid to voluntary agencies ..
Legislation .
. .. .. ..
Social service expenditures .. ..
CHAPTER
18.--Village AID .. .. .. .. .. .. 393-1963
Progress under the First Plan .. .. .. .. 393
Programme under the Second Plan .. .. .. 394
Development expenditure .. .. .. .. 394
Adult literacy and lay leaders training programme
Academies for Village Development ..
..
..
.... 396
396
Evaluation .. .... . . .. .. .. 396
PART IV.-REGIONAL DEVELOPMENT
CHAPTER
19..Regional Development .. .. .. .. . 397-414
Development programme for East Pakistan .. .. .. 398
Development programme for West Pakistan. including Karachi 402
Development programme for Special and Frontier Areas in
West Pakistan .. .. . . .. .. 406
Public sector regional allocations.. .. .. .. 408
 EXPLANATIONS
1. The Second Five Year Plan covers the period from Jdy 1960 to Juna 1965, inclusive.
2. In Pakistan notations are generally expressed in 'lakhs' and 'crores'; in this publicatioas
they are expressed in ' millions '. These and other terms are explained below :
Notations
One hundred thousand (100,000)=0ne lakh (1,00,000)
One million (1,000,OOo) =Ten lakhs (10,00,000)
Ten million ( l O , ~ , ~ ) = O ncrore
e (1,00,00,000)
Units of measurement
One maund=82-217 lbs.
One bale (cotton)=392 lbs.
One bale (jute)=cU#)lbs.
Cwrency equivuknts
One rupee-lsh. 6d.=U.S. $0.21
One million rupees= Sterling 74,710=U.S. $210,000
Years
Calendar year-1 January to 31 December
Fiscal year 7 (Example :I 1960-68 means the
period covering Jbly 1960 ta
Trade year .
Agriculture year J
t 1July to 30 June June 1961).

Before 1959-60 the fiscal year was from 1 April to 31 March.

3. In some of the tables in the Plan figures do not necessarily add up to totals because off
rounding. "n. a." indicates "data not available".
4. Administrative units :
There are two Provinces, East Pakistan and West Pakistan. For administrative purposa
each Province is divided into ' divisions ', which are sub-divided into ' districts'. In East
Pakistan a district is divided into sub-divisions, circles, thanas and villages. In West Rakistam
a district is divided into sub-divisions in some cases, tehsils (or talukas) and villages.
5. Abbreviations :
ADFC .. Agricultural Development Finance Corporation
CSO .. Central Statistical Office
EBR .. Eastern Bengal Railway
HBFC .. House Building Finance Corporation
XDA .. Karachi Development Authority
NWR .. North Western Railway
PLA .. Pakistan International Airlines
PICIC .. Pakistan Industrial Credit and Investment Cocporation
PIDC .. Pakistan Industrial Development Corporation
PIFCO .. Pakistan Industrial Finance Corporation
SIC .. Small Industries Corporation
Village B f D Village Agricultural and Industrial Development
WAPDA .. Water and Power Development Authority
 HE Planning Commission presents the Second Five Year Plan at a time
T when there is a perceptible upsurge of enthusiasm in the country, and the
national spirit is high. The momentum of the early days of the nation's life
has been regained under dynamic and determined leadership, to which the
people are responding with remarkable fervency and confidence. The
economic progress that was initiated from very small beginnings at Indepen-
dence has acquired form and direction under the experience of the First Five
Year Plan; some important economic infra-structure has been built ;managerial
and entrepreneurial skills of a fair order have been developed ; and the
country's ability to undertake and implement development programmes sf
increasing magnitude has been greatly enhanced. Tlze machinery of
administration has been refashioned and reinforced at many points. Specialized
omm missions have been appointed by the Government to study and inzeke
recommendations on crucial aspects of national life, including agriculture,
education, medicine and law. Several of these commissions have already
reported their findings, and action on their recommendations is well under
way. Most importantly, a commission is at present at work to devise a
democratic constitution for the country better adapted to the genius of the
Finally, there is a growing understanding and appreciation of the
pro lerns and potentialities of Pakistan among the nations of the world,
"Ogle-
and a visible determination to assist this country in developing its resources
and attaining economic independence.
2. These facts offer hope for the future. Nevertheless, past failures in
achieving some of the objectives of the First Five Year Plan must provide
cause for sobering reflection. There were several reasons for this failure :
political instability, absence of sustained endeavour, lack of imaginative
approach to organizational problems requiring urgent solutions, and non-
observance of the discipline of the Plan. Yet in explanation it must be
remembered that the preparation of the First Plan was not completed until
near the middle of the five-year period which it covered, and that it never
received formal sanction at the highest levels of the Government, with the
result that the vigorous efforts demanded for its implementation were not
expended. Furthermore, implementation was hampered by certain
uncontrollable factors such as exceptionally unfavourable weather conditjons
and serious deterioration in the terms of trade resulting in a substantial
reduction of the resources available to the country.
3. No doctrinaire assumptions underlie the Plan, and neither an
exclusively capitalist nor an exclusive^^ socialist economy is postulated. The
approach throughout is pragmatic. The fundamental problem is how
under severely limiting conditions, to find some way towards the liberation of
the people from the crushing burden of poverty. Viewed in this context,
economlc growth becomes a necessity for sheer survival. The compelling
consideration is that the economy must grow at a rate which must be faster
than the increase in population ; also, the pace of future growth must be,
M II 2887 (65) P.C.
such as to lead with expedition towards a modernized and self-sustaining
economy., The awakening aspirations of the people are exerting strong
pressures. on the existing economic and social order ;and no underdeveloped
country today can afford to fall behind in the race for progress without
incurring the very grave risk of internal disruptioa or external intrusion.
Progress must, however, be sought mainly through inducement, less through
direction. The creative energies of the people can be best harnessed to the
needs of clevdopmqnt if policies of economic liberalism are pursued.
4. Spec&caUy, three dominant strains run through the Plan. First,
the stubborn problem of agricultural production-low productivity and
inability of the cowtry to feed itsel&-is to be attacked vigorously; the aim is
to.achieve a break-through in agriculture. Although this objective will strain
the organizational ability of the country to the utmost, its achievement should
be within the range of possibility if energetic and sustained efforts are made.
Second, the a h is to push ahebd with industrial development by encouraging
private enterprise in aU'prabticable ways and by freeing the economy from
superfluous kestraints. Publid policies to this end are recommended in the
Plan. Controls wGch have a strangulating effect on private initiative d
me'ed to be relaxed, and reflaced progressively by fiscal and monetary measures
and operation sf the market mechanism. And third, education at all levels is
to be expanded and advanced as fast as the required institutions and
personnel can be provided.
5. Development expenditures in the Second Plan are 65 per cent larger
than in the First, though in real terms the increase is smaller. It must be
emphasized that the resources required for the implementation of the Plan
are not fuZ1f in sight. The Plan is based on a dynamic rather than a static
ap roach to resour& mobilization. The implementation of the Plan itself
fl '

wi generate a substantial part of the required domestic resources, but very

determined eEorts will still be needed to increase these resources. The Plan
'

depends heady- sn foreign aid and foreign investment. There is emphasis

on increased plrodvction of exportable goods and substitutes for imports,
which should have the effect of reducing dependence on foreign aid in the
long rup. Conditions for attracting foreign capital to Pakistan are becoming
increasingly favourable. Very substantial increase in external assistance
will, however, be called for if the requirements of the Plan are to be properly
met. The fuU mobilization of internal and external resources, therefore,
will be of critical aEporta&e to the implementation of the Plan. To the
extent that these resources become available, the Plan will succeed.
. .
6. The urgency of accelerating the process of growth necessitates a
considerable concentration on investments which produce early results.
Nevertheless, in a number of ways the Plan represents investment in the future,
with benefits m a t u ~ over
g a period of time. This is notably true of invest-
ments in water md power develo2ment projects, in education and research
and in measures to regulate population growth. The supply of material
goods that can be made available to the people cannot, regrettably,. increase
very substantidy in the Plan period without s ~ ~ ofc investments
e in
development programmes on which future growth depends. A fair increase
in goods of mass consumption should, however, occw: more food, more
cloth, and some increase ki certain manufactwed goods. The housing
difliculties will be eased, but not much. 'Fhe citizen will have more of what
is more valuable: improved education and improved health. Op ortunities
9 B
for em loyment will increase. Greater activity in agriculture an industry,
partic arly small scale industry, should have the effect of brinafig about
a greater diffusion of incomes.
7. The Plan contains a substantial element of flexibility. It is a guide
to direction and intensity of eflort, a yard-stick by which programmes can
be measured and progress appraised; it is certainly not intended to be h p e r -
s the influences of changing conditions. The essential stipulation
~ o u to
is that the development programmes framed from year to year must be
closely related to the Plan, and there must be a lively corzsciousness of the
pace and direction of the development effort set in the Plan.
8. As a document the Second Plan is much shorter than tbe First,
which dealt at length with basic social and economic problems and policies.
It does not seem to be necessary to repeat what was stated in the First Plan
but much of it is pertinent to present conditions, and wiU continue to apply
in future years. The Second Plan is essentially an operation programme
intended to provide a basis for action by the people as well as the Government,
who share the responsibility for its successful implementation.
9. With the commencement of the Plan period, the country will enter
,a critical stage of its development. Faith, vision and courage of a high
order will be needed to meet the challenge of the coming years. Success
will depend om the initiative, vigour and administrative competence which
the instruments and agencies of the Government, under energetic kadership,
are able to develop and apply to the task of mplementation o f ,the Plan.
But success will depend much more on the extent to which the mass of the
people come to have a passionate awareness sfthe urgency of economic and
social progress of their country, and are committed to do their part in a spirit
of high dedication.

G. BWMED,
June, 1960 Chairman,
Planning Commission.