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Industrial Sector Of Pakistan Problems And Solutions
Industry is an important sector of Pakistan next to agriculture. It is a major source of consumer goods and employment in the country and accounts for almost 20 per cent of the country’s annual Gross Domestic Products (GDP).
Importance Of Industrial Sector in Pakistan
The importance of industrial sector for Pakistan can be understood from the following facts.
- It contributes 20 per cent to country’s annual Gross Domestic Product according to The Nation news paper July 2019 report.
- According to Statista 2019 report industrial sector in Pakistan consumes about 25 per cent work force in the country.
- It is the second largest source of foreign exchange earnings.
- Cotton and cotton based products are Pakistan’s largest source of export earnings. It accounts for about 61 per cent of country’s export earnings.
Problems Of Industrial Sector in Pakistan
Some of the major problems that Industrial sector in Pakistan is facing are given below.
Frequent Power Short Fall: For industries power is like blood running through the veins of a living being. As long as power is regularly supplied to industries, they run smoothly and result in the increase of industrial output and ultimately increase in the foreign exchange of a country. In Pakistan unfortunately energy crisis has not only affected the life of an ordinary man but also the work and production rate of industries.
Trade Deficit: Trade deficit is an economic term. It means when a country’s exports are less than her imports. In simple words when a country imports more than exports, it is said trade deficit. Pakistan is also facing the problem of trade deficit. One of the major reasons of Pakistan trade deficit is her failure to generate demand of her industrial products in the international markets. Another reason is country’s incapability to manufacture intermediate goods of some important industries such as mobile phones, computers, cars and railway engines and so on.
Government Policies: Industrial sector growth depends upon government policies. Unfortunately the government of Pakistan has yet not decided whether her economy be industrial or agricultural in nature. Agriculture is a major source of country’s foreign exchange earnings plus it has consumed a major portion of labor force in the country. Despite these facts the government is trying to take the country towards industrialization. Due to this confusion the government is unable to formulate flexible policies for the growth and development of industries in the country.
Poor Commercialization Policy: Most of our industrial goods do not make to international markets. Poor commercialization policy is one of the major reasons of this problem. Another reason is our government inconsistent policy and third reason is trade deficit.
Technical Incapability: Industrial sector of Pakistan is also facing the problem of technical incapability. This means two things;
- Our industries lack the capability to manufacture some of the important intermediate goods that are used for making final goods such as cars, computers, railways etc.
- Our industries also lack the capability to bring new ideas and manufacture goods that world have never seen before.
Lack Of Capital: Industries in Pakistan also lack enough capital in the shape of money that can be used to expand and developed the industry. Power short fall, more taxes and less production result in the fewer sales of goods that causes capital insufficiency.
Political Instability: Political instability is a major problem of Pakistan which has not only affected industrial production and growth but also many other working bodies of the country. Due to political instability government is also unable to implement its policies.
Problems Of Industrial Labors: Though industrial labor class in Pakistan has many problems and in some industries they have not even access to basic rights but they are also a major cause of low industrial production. Labors in some industries go on strikes frequently when their demands are not fulfilled.
Causes Of Problems Of Industrial Sector in Pakistan
Some of the major causes of the above mentioned problems are given below.
Lack Of Political Will: One of the major causes is the lack of political will of government and its ministers to take important steps for the development of industrial sector in the country. This lack of political will is either due to incompetency of government or due to corruption.
British Biased Policies: British Government in India before partition due to their biased behavior towards Muslims of the Subcontinent intentionally avoided the construction and development of industries in Muslims majority areas. Due to this reason Pakistan after independence had only 34 industrial units out of 921 operating in the United India (taken from Ikram Rabbani book Pakistan Studies). After independence Pakistan took a fresh start of the construction of industrial sector in the country.
Government Incompetency: Government inability to formulate vibrant policy and to solve the problems faced by industrial sector of the country on time is a major problem in itself. Most of the time government tests different policies which result in the devastation of a sector.
Confused Cabinet: Government in Pakistan is also sometimes seemed confused because of different interests of each member of the cabinet. Those ministers whose families have agricultural background take more interest in the development of agricultural sector and vice versa. In government unfortunately personal interests superseded national interest.
Brain Drain: The flow of learned and skilled people out of the country is also a major problem that our industrial sector is facing. Due to brain drain our industrial sector is facing technical incapability.
Solution To Problems Of Industrial Sector Of Pakistan
Some suggestions for solving problems of industrial sector of Pakistan are given below.
Steady Flow Of Power: Government should make sure the steady flow of power to industries to ensure they work regularly.
Overcome Trade Deficit: Meaningful steps should also be taken to overcome trade deficit and increase our exports.
Formulation Of Vibrant Policies: Vibrant policies should be formulated both for the development and commercialization of industrial product and goods of Pakistan.
Improve Technical Capability: Government should also take steps to improve technical capability and put an end to brain drain.
Steps Already Taken
Below are some of the steps that government has already taken for the growth, development and advancement of industrial sector in the country.
Establishment Of Government Enterprises: For the industrial uplift in the country, government has established a number of important enterprises that are run by the Ministry of Production. Some of these enterprises include Scientific and Industrial Research Council, State Cement Corporation of Pakistan and Small Scale Industries Corporation.
Tax Holiday: To encourage industrialist to do investment in the sector, government has announced five years Tax Holiday. The government has also offered incentives on the installment of industries in under developed areas of the country.
Privatization Program: To improve the performance of some of the important industries in the country the government has also launched privatization program.
Lenient Policy Of Credits: The government has also adopted lenient policy in giving loans and credits to industrial sector in the country. This will help in the development of industrial sector in the country.
Industrial sector has an important contribution in the economy of Pakistan. The sector due to several reasons could not flourish in the country over the past seventy two years. It is demand of the time that government should take some concrete steps for solving the issues that this important sector is facing.
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