Pakistan inherited very small industrial infrastructure in partition of subcontinent.

In
1947, around 5% of the large-scale industrial facilities were in Pakistan. The country
started with virtually no industrial base and no institutional, financial, or energy
resources. Further, there was a shortage of management personnel and skilled
labor. Since the division of the Subcontinent, the Government of Pakistan has been
utilizing all available resources for rapid development of the manufacturing sector.
Industry is the second largest and an important sector of the economy accounting
for 25 percent of the GDP. It comprises of large to middle scale manufacturing,
mining & quarrying, construction, electricity & gas distribution. In manufacturing,
cotton yarn and cotton cloth is the leading sector, followed by food processing
industries largely based on indigenous raw materials. Industrial sector in Pakistan is
engaged in manufacturing cement and sugar plants, industrial boilers,
chemical/petrochemical plant & equipment, construction equipment and power
transmission towers, textile related engineering, automotive, etc. The services
sector is becoming an increasingly important dimension of Pakistans economy due
to its major contribution of about 53 percent in the GDP. Wholesale & retail trade,
transport & storage, communication, community & social services and personal
services are leading service activities in Pakistan. Other services are finance and
insurance, ownership of dwellings, public administration.

Period 1: Partition To 1950s

Out of 955 industrial units operating in the British India, Pakistan got only 34
industries that is 5% of the total industries established in the Subcontinent. The rest
were located in India. The industries which came to the share of Pakistan were of a
comparatively small size and were based on raw material. These industries included
small sugar mills, cotton ginning factories, flour mills, rice husking mills and canning
factories etc.
In 1947, it was suggested in the Industrial conference of Pakistan to establish
industries, which use locally produced raw material like jute, cotton, hide and skins.
The Government also set up an Industrial Finance Corporation and an Industrial
Investment and Credit Corporation in 1948. In the period from 1947 to 1950, the
private entrepreneurs invested in those industries which showed the highest profit.
The contribution of industrial sector was 6.9% to GDP in 1950.
A large number of new industries were established. The production capacity of the
already existing units like fertilizers, jute and paper was considerably expanded. The
reduction of export duties and the introduction of Export Bonus Scheme in 1958
increased export of the manufactured goods. There was all round development of
industries particularly in agricultural processing food products and textiles. The
share of industrial sector to GDP rose from 9.7% in 1954-55 to 11.9% in 1959-60.

Period 2: 1960s & 1970s

In 1960s there was a shift in the establishment of consumer goods industries to
heavy industries such as machine tools, petro-chemical, electrical complex and iron
and steel. The industrial performance in terms of growth, export and productivity

increased during the Second Five Year Plan period. The share of industrial sector to
GNP went up to 11.8% from 1960 to 1965. The manufacturing sector could achieve
a growth rate of 7.8% against the Plan target of 10%.
The country achieved self-efficiency in essential the widening of industrial base.
There was a shift in the establishment of consumer goods industries to heavy
industries such as machine tools, petro-chemical, electrical complex and iron and
steel etc. The industrial performance in terms of growth, export and productivity
increased during the Second Five Year Plan period. The share of industrial sector to
GNP went up to 11.8% from 1960 to 1965. This era is known as the golden era in a
Pakistans economic history.
The industrial performance in terms of growth, exports and production was
disappointing from 1971 to 1977 due to unrest in Pakistan. Fall in exports,
devaluation to the extent of 131% nationalization of industries labor unrest,
unfavorable investment climate, floods, recession in world trade and reduction in
investment incentives caused a fall in the output of large scale industries. From July,
1977 to 1980, the Government initiated a large number of measures to revise the
economy. Cotton ginning rice husking and flour milling were denationalized. The
private sector was encouraged to invest in large scale industries.

Period 3: 1980s & 1990s

According to the World Bank, manufacturing GDP in Pakistan grew at an annual
average rate of 9.6 % between 1977 and 1986. Investment in medium and large
scale industries grew by an average rate of 18.2 % per year. While total private
industrial investment rose by 15.6 % per year. According to World development
report 1990, the growth in real wages during the 80s in Pakistan manufacturing
sector was the fastest in the world at 6.2% a year. Pakistans manufacturing sector
became more capital intensive due to boom in industrial activity between 1975 and
1986.
Growth averaged 7.7% during the Sixth Five-Year Plan (1983-88) and 5.4 % from FY
1989 through FY 1992. In FY 1993, manufacturing accounted for 17.3 % of GDP at
current factor cost, of which large-scale manufacturing accounted for 61 % and
small-scale manufacturing for 39 %. Manufactured goods accounted for 64 % of all
exports by value in FY 1993, but the bulk of these exports came in the relatively
low-technology areas of cotton textiles and garments. The government of PPP
adopted the policy of nationalization. Ten basic industries were nationalized. Later
some others were also taken over to have a greater state role. It caused flight of
capital from the country.
Since 1990s all the governments are promoting Free Economy, Foreign investment,
non-governmental initiatives, Foreign Direct Investment and investment from
Pakistanis settled outside the country.

Period 4: 2000s Current

After an economically stagnant decade of the 1990s, the year 1999 brought a coup
led by General Pervez Musharraf with an era of accelerated economic growth that

led to more than doubling of the national GDP, and expansion in Pakistan's urban
middle class. Pakistan's GDP more than doubled to $170 billion (nominal) since
1999. It has reached $440 billion in terms of purchasing power parity (PPP).
The government began the deregulation of the banking sector, by sharply cutting
loan interest rates, and allowing banks to engage more liberally in giving consumer
finance loans, and lifting restrictions on the number of branches that foreign banks
could open in Pakistan. Easy access to low-cost consumer finance led to a sharp rise
in the sale of consumer goods such as cars, motor cycles, cell phones and home
appliances. As a result the banking sector boomed and many foreign banks from the
Middle East and other parts of the world came flocking to Pakistan and Pakistan
attracted over $5 billion foreign direct investment in the 2006-07 fiscal year, ten
times the figure of 2000-01.
Pakistan's IT sector revenue grew from almost nothing to about $2.8 billion in 2008.
The telecom boom increased mobile phone penetration from near zero in 1999 to
over 50% now, along with the expansion of Internet access to double digits. The
CNG sector attracted over $70 billion in investment in the past five years and
created 45,000 jobs.
Urbanization is an integral part of the process. With the robust economic growth
averaging 7% and availability of millions of new jobs created there was an increased
rural to urban migration in Pakistan to fill the jobs in growing manufacturing and
service sectors. Pakistan's economy witnessed a major economic transformation in
the last decade. The country's real GDP increased from $60 billion to $170 billion,
with per capita income rising from under $500 to over $1000 during 2000-07.
But the government claimed that its economic policies had boosted the GDP growth
rate to over 6% in contrast to the average growth rate of below 4% the share of
agriculture in GDP has declined to about 27%. Even after significant reduction in
poverty, the number of poor people earning less than $1.25 a day remains high.
Rising inequalities, income and non-income have led to a weaker link between
economic growth and poverty reduction in the country widening of the rich-poor
gap, worsening law and order situation.

Conclusion:
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. Means of communication and basic
infrastructure required for industry like roads, transportation etc. should improve
and enhanced to make the access easy.

New and emerging entrepreneurs must be encouraged to lead the industrial sector
and make investments. Import substitution products are produced to encourage
people to use local products.

References:
http://en.wikipedia.org/wiki/Industry_of_Pakistan
http://www.worldbank.org/en/country/pakistan
http://www.globalsecurity.org/military/world/pakistan/industry.htm
http://southasiainvestor.blogspot.com/2014/05/world-bank-report-says-pakistaneconomy.html
http://jehanzebhafeez.blogspot.com/2012/07/industrial-revolution-of-pakistan.html
http://www.opfblog.com/12134/pakistan-economy1947%E2%80%932011/
http://hubpages.com/hub/OBSTACLES-TO-ECONOMIC-DEVELOPMENT-IN-PAKISTAN
http://www.hunzatours.com/pakistan/pakistan-after-independence.shtml
http://www.indexmundi.com/pakistan/industrial_production_growth_rate.html
http://saif113sb.hubpages.com/hub/INDUSTRIAL-DEVELOPMENT-IN-PAKISTAN
http://en.wikipedia.org/wiki/Economic_liberalisation_in_Pakistan

..