COMSATS UNIVERSITY ISLAMBAD

PROJECT MEMBER:
AOUN ABBAS (SP22-BBA-243)
SUBAN NAEEM(SP22-BBA242)
HASSAN MANSOOR(SP22-BBA-078)
GULSHER QURESHI(SP22-BBA-069)
FAWAD (SP22-BBA-066)
ISMA SHAHZAD(SP22-BBA-085)
Main topic: Current Social, Economic and Political Challenges related to
Industrial Sector of Pakistan since Partition

GROWTH OF INDUSTRIES IN PAKISTAN AND ITS SHARES IN GDP

 INTRODUCTION
Industrial Sector is the second biggest individual segment of the economy representing24% of
the GDP. The movement in the assembling part is included huge, medium and little scale. The
modern Production development rate during the year2005 remained 6%. Huge scale fabricating
development rate is 19.9%.

The greater part of the present financial issues in Pakistan are at last connected to the moderate
pace of industrial development. Fast industrialization is considered by the financial fares as the
sovereign solution for put our economy on a sound premise.

Pakistan began from powerless industrial base and current circumstance is too not awesome.
Pakistan at the hour of parcel in 1947 had an immaterial modern base. It got just 34 businesses
out of all out 955, while remaining were held by India. Such few businesses were insufficient for
a recently conceived nation to confront the industrialized world. With the progression of time
Pakistan used it's everything accessible assets residential just as outside for quick improvement
of assembling division. In any case, because of wars in 1948,1965,71 and 1998 reason's incredible
loss of economy of Pakistan and it moreover unfavorably influences the modern part of Pakistan.

Industrial sector also contributes in gross domestic product (GDP) of country According to year
2004-05 the contribution of industrial sector in GDP is 18.3 Percent. So, in this way this sector
increases national GDP.
Infrastructure:
Pakistan scores just three out of seven as far as its foundation in the World Economic Forum's most
recent Global Competitiveness Index (2017b). Oxford Economics (2016) gauges that somewhere
in the range of 2016 and 2040, Pakistan will require US$480 billion in framework venture over all
areas, however at current patterns will just assemble US$355 billion, leaving a speculation hole of
US$124 billion. The hole is particularly intense in the street, port, media communications and
water areas. Normally high-esteem, complex in scope and managed by government, foundation
tasks are powerless against defilement. The respectability issues related with open offering
procedures present the chief type of hazard in framework ventures.

Pakistan has a poor record of overseeing foundation extends in a straightforward way; gauges
from 10 years back put the expense of kickbacks in broad daylight works at about 25% of the all
out undertaking spending plan .However, with regards to prominent framework ventures where
there is an unmistakable want to draw in remote speculators, specialists counseled for this
Helpdesk answer noticed that deceitful contracting is on the decrease and obtainment procedures
are by and large progressively very much oversaw and straightforwardly granted. The past
government's drive to assemble condensed petroleum gas terminals is a fascinating contextual
analysis. The NAB propelled an investigation into the venture not exactly seven days after the
 PML-N gathering completed its five-year term in July 2018, in the midst of claims that Nawaz
Sharif and his successor Shahid Khaqan Abbasi had allowed an agreement "to an organization of
their preferring, infringing upon rules and by abuse of their forces" truth be told, different reports
show that the government provided an open and aggressive delicate in 2013 that included a
solitary advance, two envelope offering process An autonomous worldwide expert, QED, was
enlisted by USAID to assess the offers and the bidder with the least regasification cost was
chosen, supposedly as per Pakistan's Public Procurement Regulatory Authority rules Inter State
Gas Systems, the organization set up by the legislature to deal with gas import ventures, has
demanded that the choice was taken in an auditable and straightforward design.

INDUSTRIES IN PAKISTAN
Pakistan ranks forty-first in the world in factory output. Pakistan industrial sector accounts for
about 25% of GDP.
Following are the main industries of our country
• Textile Industry
• Sports Industry
• Sugar Industry
• Cement Industry
• Fertilizer Industry
Other major industries include:
• Automobile
• Leather products
• Paper & board
• Pharmaceuticals
• Chemical
• Engineering items
• Electronic
• Non-metallic minerals And many others.
 GROWTH OF INDUSTRIAL SECTOR OF PAKISTAN

The issues that disturb the growth of industrial sector of Pakistan in history are as follow.

1. Industrial growth and Kashmir conflict

The War of 1947–1948 between Pakistan and India, it is also known as the First Kashmir War,
was fought between India and Pakistan over the princely state of Jammu and Kashmir from 1947
to 1948. After getting freedom Pakistan had extremely frail economy and war 0f 19471948
following not many months crushed the effectively delicate economy of Pakistan. Pakistan got
an absolute portion of right around 200 million out of 40-50 % of that offer was expended in war
and there was insufficient cash to be put resources into industrial division of Pakistan. In 1947 it
was proposed in the Industrial gathering of Pakistan to set up ventures, which utilize privately
delivered crude material like jute, cotton, stow away and skins however Pakistan neglected to
accomplish that focuses because of war following barely any long stretches of birth of Pakistan.
In 1947 Pakistan didn't have any structure for workplaces. Office were being treated in tent which
was less effective and a large portion of individuals likewise would not like to put resources into
Pakistan since Pakistan was immature and there was parcel of security issues. Security issue was
most serious issue in industrial development of nation and subsequently. The commitment of
industrial part was just 6.9% to GDP in 1950.

2. Industrial growth in 1950’s

Due to no war from 1950-1963 industrial sector of Pakistan make a lot of progress. In 1952 the
Government stepped up to the plate and set up Pakistan Industrial Development Corporation
(PIDC) to put resources into those ventures which require substantial starting speculation. PIDC
significant speculation was in paper and paper board, bond, manure, jute plants and the Sui
Karachi gas pipeline. PIDC by June, 1971 had finished 59 modern units and made a base for
selfsupported development in the industrial part. The Government additionally set up an
Industrial Finance Corporation and an Industrial Investment and Credit Corporation. The creation
limit of the previously existing units like fertilizers, jute and paper was impressively extended. The
decrease of fare duties and the introduction of Export Bonus Scheme in 1958 expanded fare of the
fabricated goods. There was all round advancement of enterprises especially in agrarian preparing
foods items and textiles.

The share of industrial sector to GDP rose from 9.7% in 1954-55 to 11.9% in 1959-60.

3. Industrial performance in 1960’s and damages in 1965 war

In 1960's there was a move in the foundation of purchaser goods ventures to overwhelming
enterprises, for example, machine apparatuses, Petro-chemical, electrical mind boggling and iron
and steel. The industrial exhibition regarding development, exports and productivity expanded
during the Second Five Year Plan period.

In 1964 Gibraltar Operation was begun by General Musa. Despite the fact that Pakistan got
succeed and won regions of India however a great deal of cash was expended in that activity and
less cash was put resources into modern area of Pakistan. The portion of modern division to GDP
likewise diminished in that year. From '1950-1960 development pace of enormous scale.

In the year 1965 a great second war was fought between Pakistan and India which result loss in
lots of lives and economy of a country were adversely affected by this war. From 1950-1964 there
was a great contribution of industries in GDP but due to the war of 1965 the contribution of
industries was decreased from 11.9 to 10.1.the share of large-scale manufacturing sector in GDP
also got decreased from 13.1 to 12.2 in 1965-1966. Economy of Pakistan was prospering during
time period of 1955-1964. The most sweeping outcome of the war was the wide-scale monetary
stoppage in Pakistan. The expense of the 1965 war put a conclusion to the noteworthy financial
development Pakistan had seen during the mid-1960s. The war in 1965 had demonstrated to be
unreasonably expensive for our economy. It was mostly the post-1965 war related financial and
political emergencies that had prompted the 1971 war which further disturbed the monetary
environs driving the leftover Pakistan to suffer financial stagnation over the following five years.

4. LOSS OF INDUSTRIES IN 1971 WAR

The third war was fought between India and Pakistan in 1971 after five year of 1965 and did a
great loss in economy.The industrial presentation regarding development, exports and
production was baffling from 1971 to 1977. There were different purposes behind the horrible
showing of the manufacturing segment. One wing of the nation (East Pakistan) was coercively
isolated. The Country had to fight a war with India in 1970. The suspension of outside guide, loss
of indigenous market (East Pakistan), fall in exports, cheapening to the degree of 131%
nationalization of ventures work agitation, negative speculation atmosphere, floods, downturn
in world exchange and decrease in venture motivations caused a fall in the yield of enormous
scale businesses. The yearly growth rate tumbled to 2.8% in the industrial part in this period.

From July, 1977 to 1980, the Government started an enormous number of measures to
reexamine the economy. Cotton ginning rice husking and flour processing were denationalized.
The private part was urged to put resources into enormous scale enterprises. The yearly
development rate in assembling segment was 8.2% in the 1971's. The growth of large-scale
manufacturing slowed down to an average of 4.7% in the first half and further to 2.5% in the 2nd
half of the 1970's.

5. Some Others issues that disturb the growth of industrial

sector in Pakistan
The War of Kargil, also called the Kargil fight was an outfitted clash among India and Pakistan that
occurred among May and July 1999 in the Kargil area of Kashmir and somewhere else along the
Line of Control (LOC). Kargil war also effect the economy of Pakistan and share of industrial sector
to GDP Of Pakistan was also decreased.

From 2000-onwards there is also a downfall in industries due to terrorism.It also affects the
economic growth of a country by lowering foreign direct investment, capital formation,
investment and increases risk perception. Our agriculture industry also failed to make progress
due to terrorism. Terrorism in Pakistan did a colossal misfortune to economy of Pakistan and
industrial segment truly got upset during these years. The current wave of terrorism is believed
to have started in 2000 and terrorism peaked during 2009.

Impact on business sectors:

Significant levels of foundation defilement effect sly affect a nation's financial presentation by
lessening institutional quality, undermining,Aggressiveness and business, twisting the portion of
acknowledge and going about as a hindrance to exchange Corruption has a long haul injurious
effect on the administrative condition and the proficiency of the state mechanical assembly as it
makes motivating forces for government officials and open authorities to make more guidelines,
limitations and authoritative strategies to have more chances to blackmail installments from
residents and organizations. This, thusly, is probably going to intensify lease looking for conduct
and breed wasteful aspects over the open segment Corruption additionally goes about as a non-tax
boundary to exchange, raising exchange costs and hindering outside speculation It is nothing
unexpected, subsequently, that defilement is emphatically and altogether corresponded with lower
total national output (GDP) per capita, less remote venture and more slow development.

The Pakistani economy and international investment:

Pakistan is the second biggest economy in South Asia after India and records for 9.3% of local
gross worth included, with a GDP in 2017 of US$305 billion (World Bank 2018). Gross domestic
product development in 2017 was 5.4%, which is similarly low for the area (Asian Development
Bank2018). Agribusiness represents 24.4% of GDP and utilizes the heft of the all out workforce,
industry makes up 19.1% of GDP, while the portion of the administration area in GDP arrived at
56.5% in 2017 (Asian Development Bank 2018. The nation has various similar points of interest,
including a key land area, a developing working class, a youthful populace, a tremendous Diaspora
organize, a solid business and purchaser base, and low creation and work costs.

One significant on-going improvement activity is the China-PakistanEconomic Corridor, which

will channel over US$60 billion towards interests in vitality and framework (Central Intelligence
Agency 2018). While the organization is viewed as laying the foundation for expanded fares, it
has raised concerns, outstandingly at the IMF, about the maintainability of the nation's capital
outpourings and outside financing needs in the medium term .Such macroeconomic concerns are
not unwarranted. In 2013, Pakistan had to go to the IMF Extended Fund Facility for a US$6.6
billion credit to deflect a parity of installments emergency and give the nation space to reconstruct
its outside money holds (IMF 2013). In this way, while monetary development is anticipated to
proceed and destitution rates are required to decay, Pakistan stays perhaps the most reduced
entertainer in South Asia regarding human advancement pointers (World Bank 2018b).
Government spending on wellbeing, nourishment and training is outstandingly lower than most
different nations, at a simple 3% of GDP (World Bank 2018b). Open obligation has remained
generally steady since 2012, at around 65% of GDP, while joblessness figures are likewise steady
at around 6% (GAN Integrity 2017; Asian Development Bank 2018). Nonetheless, these figures
may not recount to the entire story, as ongoing investigation appraises the shadow economy to be
about 26% of Pakistan's complete GDP 6 Outside of agribusiness, the World Bank evaluates that
71% of Pakistan's workforce works in the casual segment (World Bank 2018). This is of concern
given that there is some proof that in low pay nations, the size of the shadow economy is
emphatically connected with more significant levels of defilement.
 INDUSTRIAL SECTOR SHARES IN REAL GDP GROWTH RATE
Industry is the second biggest and a significant division of the economy representing 25 percent
of the GDP. It includes enormous to center scale producing, mining and quarrying, development,
power and gas appropriation. In assembling, cotton yarn and cotton fabric are the main part,
trailed by food handling industries to a great extent dependent on indigenous crude materials.
Engineering part in Pakistan is occupied with assembling concrete and sugar plants, modern
boilers, compound/petrochemical plant and equipment, development hardware and power
transmission towers, textile related building, car, and so forth.

Figure 1:Pakistan per capita growth rate of industries

1:: The share of industrial sector was 5.8% in GDP growth rate in 2003-04.
However, it increased to 13.1% in the year 2004-05 due to the following
reason
• Monetary Policy
• Financial Discipline
• Consistency and Continuity of Development Policies
• Strengthening of Domestic Demand
• Continuously Improving Macroeconomic Environment
• A Stable Rate
• Global Expansion of Markets Due to Liberalization Of Trade In 2005

2:: In 2005 the contribution of industrial sector in GDP growth rate was 9.9%
which was decline to 4.1% in 2006 due to
The decline in manufacturing sector is due to multiple reasons like the reduced production of
cotton crops, sugar shortage, steel and iron problems and global oil price.

3:: From 2006 to 2007 there was an increase in the industrial sector contribution
towards the GDP growth rate due to the following reasons.
 
Major reasons for the growth in 2007 was production of sugar which was estimated at
61.5Million Metric Ton (MMT), an increase of 12% over previous year due to increase in
area under cultivation and yield.
• In 2007, the industrial sector grew by 14% and accounted for 27% of the gross domestic
product (GDP) based on purchasing power parity.
• Foreign direct investment in mining and quarrying and oil and gas exploration increased
by 34% and 74%, respectively, in 2007 compared with that of 2006.
• Textile exports in 1999 were $5.2 billion and rose to become $10.5 billion by 2007.
• In 2007 The Government of Pakistan has offered a number of incentives for encouraging
the use of CNG in the country.

4:: In 2008 and 2009 there was a drastic decline in the industrial sector
contribution towards the GDP growth rate due to
• The impact of severe energy shortages.
• Decline in domestic law and order situation.
• Sharp depreciation in rupee vis-a-vis US dollar.
• Weak external demand on the back of global recession coupled with slowdown in
domestic demand.
• The economic development has been slowed down in 2008 because of the large price
increase of some commodities such as oil and food, global financial Crisis, and national
political issues that affect the industrial growth.
• The trade deficit, which was 3.7 in 2007 may widen further to about 17 percent in 2009
due to rise in domestic demand.
• The increasing trend in inflation also affected consumers to curtail expenditure on durable
goods.
• The performance of steel mill was unsatisfactory during the current fiscal year. The
production value slid down from Rs 11133 million in 2007-08 to Rs 9971 million in the
current financial year, witnessing a decrease of 10.44 percent.
5:: During the FY 2010-11, the domestic industrial sector recovered from
the longest ever decline to record a decent growth of 4.9 percent. Reasons
are as follow:
• The recovery came mainly due to supportive macroeconomic policies, relatively lower
inflation, improved prospects of global economy, and relatively better credit availability.
• The growth in FY 2010-11 was the fourth highest growth rate in the decade, but was still
below the 10-year average of 5.7 percent.

The industrial growth during FY2010-11 is mainly from a rebound in manufacturing and
construction sectors as government reversed some taxes imposed last year.
• The resultant price adjustments were immediately followed by the pick-up in domestic
demand which coupled with available capacities, ensured positive growth rate in most
sectors.

SOLUTIONS
• Mainly foreign intelligence agencies persuade our young populace against Pakistan and
Pakistan's standard of law and they start playing in terrible hands. To counter this
administration must give genuine worry to give training to the youngsters and
furthermore there must be mindfulness development in remote zone to caution them
from the mentality of adversaries.
• Our international strategy must be too solid that it can depict positive picture of Pakistan
to the world to counter global media which is occupied in spreading false news about
individuals of Pakistan
• Our government should hold gatherings with foreign investors and ought to persuade
them to contribute in Pakistan and this would assist us with booming our industrial
segment.
• Pakistan has great opportunity to convince foreign investors as CPEC has given attention
to Pakistan to make modern zones at better places.
• Foreign investors and local investors must feel safe to run different industries and it is
possible if our security agencies personally go and assure them security and peaceful
environment.

SUGGESTIONS AND RECOMMENDATION

• Government must unveil a solid industrial policy keeping in view the global requirements.
• In order to increase the share of the industrial sector in the GDP there is dire need to
establish new industrial estate in the country.
• To enhance the contribution of existing industrial estates in the economy they should be
facilitated by the government policies.
• Industrialists be given loans on easy installments, so as they could run industries
smoothly.
• New markets for the local products are explored and the quality of local products be
improved to increase the demand abroad.
 
• New technical universities and institutions be established for the guidance of the labor
and equip them with the modern techniques being used in the industry.
Means of communication and basic infrastructure required for industry like roads,
transportation etc. should improve and enhanced to make the easy access.
• New and emerging entrepreneurs must be encouraged to lead the industrial sector and
make investments.
• The crisis of energy must be resolved on priority basis and interrupted supply of energy
to industry be ensured.
• More attentions should be given to increase export.
• Realistic and up-to-date statistics is provided to this sector.

REFERENCES
http://www.finance.gov.pk/survey/chapters_17/overview_2016-17.pdf

http://www.finance.gov.pk/survey/chapters_17/overview_2016-17.pdf

https://en.wikipedia.org › wiki › Kargil_War

https://www.researchgate.net/publication/315832286_Investment_Industrial_Growth_and_Confl
ict_in_Kashmir_An_Analysis https://en.wikipedia.org/wiki/Economy_of_Pakistan

The End!!!!!!