ECONOMIC PLANNING IN

PAKISTAN

BRIEF OVERVIEW
1988-98

DEPARTMENT OF PUBLIC ADMINISTRATION UNIVERSITY OF KARACHI

 FIVE YEAR, S ECONOMIC PLANING IN
PAKISTAN

1955 -1998

BRIEF OVERVIEW ON
1988-1998 ECONOMIC PLANING IN
PAKISTAN

SUBMITTED TO: SUMITTED BY:

COURSE INSTRUTOR AZIZ-UR-REHMAN

SIR SHAHID ZAHEER ZAIDI ASHIQ ALI AMIR

S.M MOHSIN
 DEPARTMENT OF PUBLIC ADMINISTRATION UNIVERSITY OF KARACHI

ACKNOWLEDGEMENT

All the praises are attributed to the sole creator of the universe” The almighty
ALLAH” The compassionate, the merciful, the source of all knowledge and
wisdom, who bestowed, the health , thought, talented teachers, caring
parents and mutual understandings among us gave us the strength and
courage to complete this assignment entitled “Five year’s economic planning
in pakistan1955-98, an special brief overview on during the years 1988-
98.We express our deepest gratitude to our course instructor Lecturer SIR
SHAHID ZAHEER ZAIDI for his inspiring guidance for this assignment.
DEPARTMENT OF PUBLIC ADMINISTRATION UNIVERSITY OF KARACHI

S/No CONTENTS Page no

01. Introduction

02. History of Planning in Pakistan

03. First Five-Year Plan, 1955-1960;

04. Second Five-Year Plan, 1960-1965;

05. Third Five-Year Plan, 1965-1970;

06 Fourth Five-Year Plan, 1970-1975;

07 Fifth Five-Year Plan, 1978-1983;

08 Sixth Five-Year Plan, 1983-1988;

09 Seventh Five-Year Plan, 1988-1993;

10 Eight Five-Year Plan, 1993-1998.

11. Conclusion

DEPARTMENT OF PUBLIC ADMINISTRATION UNIVERSITY OF KARACHI

 1
INTRODUCTION:
History of Five-Year Plan:
, Soviet economic practice of planning to augment agricultural and industrial output by designated 
quotas for a limited period of usually five years. Nations other than the former USSR and the Soviet 
bloc members, especially developing countries, have adopted such plans for four, five, or more years. 
Joseph Stalin, in 1928, launched the first Five­Year Plan; it was designed to industrialize the USSR 
in the shortest possible time and, in the process, to expedite the collectivization of farms. The plan, 
put into action ruthlessly, aimed at making the USSR self­sufficient and emphasized heavy industry 
at the expense of consumer goods. It covered the period from 1928 to 1933, but was officially 
considered completed in 1932. The second Five­Year Plan (1933–37) continued and expanded the 
first. The third plan (1938–42) was interrupted by World War II. The fourth covered the years 1946–
50, the fifth 1951–55. The sixth plan (1956–60) was discarded in 1957, primarily because it 
overcommitted available resources and could not be fulfilled. It was replaced by a Seven­Year Plan 
(1959–65), which fell far short of estimated increases in agricultural (especially wheat) production. 
The Seven­Year Plan was considered the start of a longer period (20 years) devoted to the 
establishment of the material and technical basis of a Communist society. The late 1960s and early 
1970s saw increased emphasis placed on consumer goods, and the 9th Five­Year Plan (1971–75) for 
the first time gave priority to light industry rather than heavy industry. The agricultural sector still grew 
far less than projected in the 10th (1976–80) and 11th (1981–85) Five­Year Plans, and overall 
economic performance was poor. The 12th and final Five­Year Plan (1986–90) projected increases in 
consumer goods and energy savings, but the economy began to slide, shrinking by 4% in 1990. The 
dissolution of the Soviet Union made the formation of a 13th Five­Year Plan a moot point.

Reform:
The government started pursuing market-based economic reform policies in the early 1980s.
These reforms began to take hold in 1988, when the government launched an ambitious IMF-
assisted structural adjustment program in response to chronic and unsustainable fiscal and
external account deficits. The government began to remove barriers to foreign trade and
investment, reform the financial system, ease foreign exchange controls, and privatize dozens
of state-owned enterprises.

Although the economy became more structurally sound, it remained vulnerable to external
and internal shocks, such as in 1992-93, when devastating floods and political uncertainty
combined to depress economic growth sharply. The Asian financial crisis seriously affected
 2
Pakistan's major markets for its textile exports. For example, average real GDP growth from
1992 to 1998 dipped to 4.1% annually. Economic reform also was set back by Pakistan's
nu66666666666644444clear tests in May 1998, and the subsequent economic sanctions
imposed by the G-7. International default was narrowly averted by the partial waiver of
sanctions and the subsequent reinstatement of Pakistan's IMF enhanced structural adjustment
facility/extended fund facility in early 1999, followed by Paris Club and London Club re-
scheduling. After taking power in late 1999, President Musharraf instituted policies to
stabilize Pakistan's macroeconomic situation. Pakistan continues to struggle with these
reforms, having mixed success, especially in reducing its budget and current account deficits.

Agriculture and Natural Resources:

Pakistan's principal natural resources are arable land, water, hydroelectric potential, and
natural gas reserves. About 28% of Pakistan's total land area is under cultivation and is
watered by one of the largest irrigation systems in the world. Agriculture accounts for about
21% of GDP and employs about 42% of the labor force. The most important crops are cotton,
wheat, rice, sugarcane, fruits, and vegetables, which together account for more than 75% of
the value of total crop output. Despite intensive farming practices, Pakistan remains a net
food importer. Pakistan exports rice, fish, fruits, and vegetables and imports vegetable oil,
wheat, cotton (net importer), pulses, and consumer foods.

The economic importance of agriculture has declined since independence, when its share of
GDP was around 53%. Following the poor harvest of 1993, the government introduced
agriculture assistance policies, including increased support prices for many agricultural
commodities and expanded availability of agricultural credit. From 1993 to 1997, real growth
in the agricultural sector averaged 5.7% but has since declined to less than 3% in 2005.
Agricultural reforms, including increased wheat and oilseed production, play a central role in
the government's economic reform package. Heavy rains in 2005 provided the benefit of
larger than average cotton, wheat, and rice crops, but also caused damage due to flooding and
avalanches.

Pakistan has extensive energy resources, including fairly sizable natural gas reserves, some
proven oil reserves, coal, and large hydropower potential. However, exploitation of energy
resources has been slow due to a shortage of capital and domestic and international political
constraints. For instance, domestic gas and petroleum production totals only about half the
country's energy needs, and dependence on imported oil contributes to Pakistan's persistent
trade deficits and shortage of foreign exchange. The government announced that privatization
in the oil and gas sector is a priority.

Industry:
Pakistan's manufacturing sector accounts for about 25% of GDP. Cotton textile production
and apparel manufacturing are Pakistan's largest industries, accounting for about 70% of total
exports. Other major industries include food processing, beverages, construction materials,
clothing, and paper products. As technology improves in the industrial sector, it continues to
 3
grow. In 2005/2006, the manufacturing sector grew by 8.6%. Despite government efforts to
privatize large-scale parasitical units, the public sector continues to account for a significant
proportion of industry. In the face of an increasing trade deficit, the government seeks to
diversify the country's industrial base and bolster export industries. Net foreign investment in
Pakistani industries is only 0.5% of GDP.

Foreign Trade and Aid:

Weak world demand for its exports and domestic political uncertainty have contributed to
Pakistan's high trade deficit. In 2004, growth rebounded to approximately 6% with
substantial improvement in public and external debt indicators and continues to remain
robust with 7.8% growth in 2005. Foreign reserves are at an all-time high of $11.5 billion.
Pakistan's exports, which grew by 14.4% in 2005/2006, continue to be dominated by cotton
textiles and apparel, despite government diversification efforts. Major imports include
petroleum and petroleum products, edible oil, wheat, chemicals, fertilizer, capital goods,
industrial raw materials, and consumer products, rising to 38.8% to $25.6 billion. External
imbalance has left Pakistan with a growing foreign debt burden. The fiscal imbalance is
reflected in a high level of total net public debt, which reached an estimated 92.6% of GDP in
2000-01, more than half involving external liabilities, but decreased to 72.7% in 2003. The
fiscal deficit widened from 5.6% of GDP in 1994-95 to 7.7% in 1997-98 before declining to
4.5% in 2006. Despite a rise in tax collection, defense and development expenditure along
with transfers to the provinces all rose in the 2006 budget, widening the deficit. Support for
loss-making, state-owned enterprises and a weak domestic tax base are critical elements in
the recurring fiscal deficits. The Pakistan Telecommunications Company Ltd. (PTCL)
represents the largest of Pakistan’s privatization programs for 2005. Despite its economic and
political difficulties, Pakistan has taken steps to liberalize its trade and investment regimes,
either unilaterally or in the context of commitments made with the World Trade Organization
(WTO), IMF, and the World Bank. Over the past two years, efforts in several crucial areas
have seemingly intensified, resulting in Pakistan becoming a more open and secure market
for its trading partners.

Pakistan has received significant loan/grant assistance from international financial

institutions (e.g., the IMF, the World Bank, and the Asian Development Bank) and bilateral
donors, particularly after it began using its military/financial resources in the war on terror.
The United States recently pledged $3 billion for FY 2005 to FY 2009 in economic and
military aid to Pakistan. In addition, the IMF and World Bank have pledged $1 billion in
loans to Pakistan. In 2004 to 2007 alone, the World Bank has pledged over $500 million in
investment projects.
 4

PLANS AND PLANNING PROCESS IN

PAKISTAN:
A. Long- and medium-term plans and
programmes at the national level
At the national level, the Planning Commission of Pakistan drafts the long-term perspective
plan and the five-year plans, taking into account the recommendations and suggestions of
sectoral committees of divisions/line departments and the Provincial Planning Departments.
The first Five-Year Plan was put into effect soon after independence in 1947. The phasing of
the successive national plans and their periods of implementation were:

• First Five-Year Plan, 1955-1960;

• Second Five-Year Plan, 1960-1965;

• Third Five-Year Plan, 1965-1970;

• Fourth Five-Year Plan, 1970-1975;

• Fifth Five-Year Plan, 1978-1983;

• Sixth Five-Year Plan, 1983-1988;

• Seventh Five-Year Plan, 1988-1993;

• Eight Five-Year Plan, 1993-1998.

B. Institutional arrangements for decision-

making/development planning at
different levels

1. Overall planning bodies:

The responsibility for development planning in Pakistan is split between the federal and
provincial governments, concomitant with the allocation of functions to them under the
Constitution of Pakistan. The Constitution has two lists: the first specifies the subjects
allocated to the federal government; the second specifies the concurrent list. All remaining
subjects not specified in either of the lists constitute the provincial list. Both federal and

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provincial governments can legislate on the subjects included in the concurrent list, but in the
case of any dispute between them on any subject borne on that list, federal law takes
precedence over provincial law.

Under the Constitution, the provincial government can also create a system of local
government, both in urban and rural areas, as well as frame laws, rules and regulations for its
administration.

At the federal level, annual and five-year economic and social development plans are
prepared by the Planning and Development Division of the National Planning Commission.
The other functions of the Planning and Development Division include monitoring the
implementation of major development projects and programmes, evaluation of ongoing and
completed projects, and the development of appropriate costs and physical standards for
effective technical and economic appraisals of projects.

The federal ministries (to the extent of subjects allocated to them under the rules of business)
are responsible for the preparation of programmes and projects in their respective fields of
interest including autonomous organizations under their control. The programmes prepared
by the federal ministries are submitted to the Planning Commission which coordinates all
development programmes in Pakistan.

The Planning and Development Department is the principal planning organization at the
provincial level. It is headed by the Additional Chief Secretary (Development) in each
province, including NWFP, who is assisted by professional staff from various fields including
economists. The Department coordinates the programmes prepared by the provincial
departments concerned with development and prepares the overall Provincial Five-Year Plan
and Annual Development Programmes (ADP).

2. Project approving bodies:

Development projects and programmes, including in the Public Sector Development
Programme (PSDP), are approved at the federal and provincial levels by different approving
bodies depending up to the overall capital cost of the financial arrangements of a project
(e.g., the source of funding), and the nature and extent of recurring expenditures. Those
bodies include:

o National Economic Council (NEC), federal;

o Executive Committee of the National Economic Council (ECNEC), federal;
o Economic Coordination Committee, federal;
o Central Development Working Party (CDWP), federal;
 o Federal Ministries Departmental Developmental Working Party;
o Provincial Development Working Party;
o Provincial Departmental Development Working Party of the Provinces.

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(a) National Economic Council :

NEC is the supreme policy-making body in the economic field in Pakistan. It is headed by
the Prime Minister and its members include the federal ministers in charge of economic
ministries, the deputy chairman of the Planning Commission and the Chief Ministers of the
provinces. NEC has overall control of the planning machinery and approves all plans and
policies relating to development.

(b) Executive Committee of National Economic Council :

ECNEC is headed by the Federal Minister of Finance. Its members include the federal
ministers of economic ministries, provincial governors/Chief Ministers or their nominees and
the provincial ministers concerned. The functions of ECNEC are:

o To sanction development schemes in the public and private sectors;

o To allow moderate changes in the plan and in the plan allocations;
o To supervise the implementation of economic policies laid down by NEC or the
government;
o Approval of all development schemes costing PRs 100 million and above, with
the exception of energy and highway projects.

(c) Economic Coordination Committee:

The Cabinet ECC is headed by the Federal Minister for Finance, with the federal ministers of
economic ministries as its members. It attends to all urgent day-to-day economic matters and
it coordinates the economic policies initiated by the various divisions of the government. It
monitors the monetary and credit situation and makes proposals for the regulation of credit,
in order to maximize production and exports and to prevent inflation. It also gives approval
to projects in the private sector.

(d)Central Development Working Party:

Those development projects which exceed a certain financial limit prescribed by the central
sectoral ministries, provincial governments, autonomous organizations etc. are submitted to
CDWP for processing and approval. CDWP is headed by the deputy chairman of the
Planning Commission and which includes as its member the Secretaries of the federal
ministries concerned with the development and the heads of the Planning Departments of the
provincial governments. The schemes approved by the Central Development Party are
submitted to ECNEC for final approval.
CDWP is competent to sanction federal schemes (non-recurring) that cost between PRs 20
million and PRs 100 million, subject to the condition that Ministry of Finance does not
disagree.

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(e) Federal Ministries Departmental Development Working Party:

The Federal Ministries Departmental Development Working Party is approves development

projects/programmes for federal ministries/divisions/departments according to their approved
financial limits. It is headed by the respective Secretaries/Heads of Departments and includes
representatives of the Finance Division and the relevant Technical Section in the Planning
and Development Division. The Federal Ministries Departmental Developmental Working
Party can sanction schemes costing below PRs 20 million (non-recurring).

(f) Provincial Development Working Party:

Each province has a Provincial Development Working Party which is headed by the
Chairman, Planning and Development Board/Additional Chief Secretary (Development) and
includes among its members the Secretaries of the provincial departments concerned with
development. The Provincial Development Working Party scrutinizes various projects for
inclusion in the Annual and Five-Year Plans. It is competent to approve all provincial
projects costing up to and including PRs 100 million (non-recurring) in each case. Projects
exceeding that limit are submitted to CDWP/ECNEC for processing and approval.

(g)Provincial Departmental Development Working Parties:

As in the case of schemes by the federal ministries/divisions, provincial schemes up to PRs

20 million (non-recurring) are approved by the Provincial Departmental Development
working parties.

C. Public sector development programmes at federal

and provincial levels

All federal public sector development schemes are compiled in the Public Sector
Development Programme (PSDP) of the Federal Government. Likewise, all provincial public
sector developments are compiled as PSDP of the respective provincial governments. Federal
and provincial PSDP are the operational side of the Five-Year Plans and ADPs. In fact, they
are part of the national (federal and provincial) annual budget for the financial year (July-
June), and are approved by the federal and provincial legislatures. The development schemes
of the local government institutions and the commercial organizations are not reflected in
PSDP or annual plans.

At present, a major share of the total development programme is allocated to federal projects
which relate to major infrastructural sectors, such as transport and communications, and
energy, while the remainder is allocated to the Provincial Development Programme. Of the
total Provincial Development Programme, 10 per cent is allocated as a special allocation to
NWFP and Balochistan; the remaining 90 per cent is allocated among the four provinces on a
population basis. In addition, the federal government allocates funds to the provinces to

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cover essential provincial projects under the Special Development Programme, which cannot
be included in the provincial ADPs as a result of resource constraints.

In accordance with the priorities set out in the five-year plan and the availability of resources,
tentative sectoral allocations to the federal ministries and provincial governments for the next
ADP are worked out. They are then communicated to the federal ministries and provincial
governments. At the provincial level the preparation of ADP is initiated and coordinated by
the Planning, Environment and Development Department in consultation with the Finance
Departments, executing line departments, autonomous bodies and corporations. The planning
agencies, both at the federal and provincial levels, remain in close contact horizontally with
the concerned ministries and vertically with each other on a continuous basis during the
formation of ADP.

The Annual Plan Coordination Committee (APCC), chaired by the Finance Minister,
discusses the national and provincial ADPs before obtaining NEC approval. APCC meets
three to four weeks after the deliberations by the Federal and Provincial Priorities
Committee. Provincial governments are represented in the meetings by the Additional Chief
Secretaries of the Planning, Environment and Development Department /Boards and the
provincial finance Secretaries. That forum enables provincial governments to present their
problems and observations, or suggestions and demands, to the federal government. If the
provinces are not satisfied with the decisions taken in APCC they get a further opportunity to
plead their case in the meeting of NEC where each ADP is finally approved.

D. National development planning:

Environmental concerns received minimal mention in the first, second and third Five-Year
Plans. The fourth Five-Year Plan was indirectly oriented towards the preservation and
protection of the environment, but was not implemented as a result of political change. The
fifth Five-Year Plan, in its chapter on "Physical planning and housing" mentioned that
housing and a healthy living environment were basic human necessities. Improvements in the
environment also contribute to the economic growth as well as serious environmental
problems related to cities were mentioned. The sixth Five-Year Plan envisaged environmental
protection, e.g., the reclamation of land through control of salinity and water logging, and the
improvement of slums and squatter settlements received due priority.

The seventh Five-Year Plan and the 15-Year Perspective Plan (1988-2003) came together.
The two Plans gave full recognition to the interrelationship between population, resources,
environment and development. The Environmental Protection Ordinance (EPO) (1983),
which was promulgated on 31 December 1983, made it compulsory to carry out EIA/IEE
under its Section Eight. The Environmental Protection Council and the Pakistan
Environmental Protection Agency were made responsible for the implementation of EPO. An
environment profile of Pakistan was prepared in 1987 and subsequently the National
Conservation Strategy (NCS) emerged as a policy document on environment.

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For the first time, in the eighth (current) Five-Year Plan a full chapter on the environment
was included. The government started implementing the NCS by incorporating its
recommendations in the Plan into each development sector, in addition to a separate section
on the environment. An NCS Unit has been set up in the Ministry of Environment, Urban
Affairs, Forestry, Wildlife, Fisheries, Local Government and Rural Development. An
Environmental Section was also set up in the Planning Commission with similar cells in the
Provincial Planning Departments, while Provincial Environmental Protection Agencies were
established.

E. National conservation strategy:

The national government and the World Conservation Union (IUCN) initiated work on the
NCS in 1987. The NCS document is both a product and a process. The process comprised
workshops, seminars, lectures on different topics and work by the Journalists' Resource
Centre. That effort created a constituency of people more concerned about the environment
of Pakistan and more prepared to do something about environmental protection then ever
before. Public hearings were held in three big cities and five villages to hear the views of
local communities. One main focus of the NCS is investment decisions, which are more
flexible then consumption patterns. It seeks

to identify actions with significant economic and social impacts that would not otherwise
occur by themselves because of a failure to act in the marketplace or institutions. A second
key finding was the importance of community-based management of resources. From the
Aga Khan Rural Support Programme in the Northern Areas to the Orangi Pilot Project in
Karachi, participatory organizations have proved to be effective agents of change in efforts
by society to move towards sustainable development.

The NCS document is divided into three parts. The first contains a survey of the state of the
environment in the general sense: the quality of land, water and air; the use of energy; the
health of the population; and the institutions and policies that deal with those concerns. Part
two provides detailed recommendations for policies and measures in agriculture, forestry,
range-land and livestock management, water supplies, marine and coastal resources, wildlife,
mining, energy supplies, industrialization, the growth of cities, pollution, tourism and a host
of supporting programme areas such as communications, education and research. The final
section looks at the arrangements for implementing all the recommendations in part two. A
total of 68 specific programmes are identified in the 14 core areas, each with a long-term
goal and with expected results and resource investments within the next decade (Pakistan
National Conservation Strategy, 1995). The core areas are:
 o Maintaining soils in croplands;
o Increasing irrigation efficiency;
o Protecting watersheds;
o Supporting forestry and plantations;
o Restoring range-land and improving livestock;

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o Protecting water bodies and sustainable fisheries;
o Conserving biodiversity;
o Increasing energy efficiency;
o Developing and deploying renewable resources;
o Preventing/abating pollution;
o Managing urban waste;
o Supporting institutions for dealing with common resources;
o Integrating population and environmental programmes;
o Preserving cultural heritage.

Although the NCS recommendations are organized into 14 sections above, which cover key
areas, one of its most important messages is the interconnected nature of sustainable
development problems and their solutions. Efforts to protect watersheds, for example, reduce
flooding and thus improve agricultural productivity in downstream areas. Increasing energy
efficiency and developing renewable energy sources can lower national dependence on fossil
fuels and thus help alleviate air pollution problems.

The NCS was approved as the official policy by the federal Cabinet on 1 March 1992. The
Ministry of Environment, Urban Affairs, Forestry, Wildlife, Fisheries, Local Government and
Rural Development has open a special provincial NCS cell for the implementation of the
NCS. Pakistan was one of the few countries to participate in the Earth Summit in Rio in 1992
with a fully developed NCS. Despite becoming a signatory to various international
Conventions, protocols and agreements, Pakistan finds itself alone in battling the enormous
pressure resulting from a difficult process for change. Therefore, like other plans, policies
and programmes, NCS remains just a good document and has yet to be implemented in its
true sense because of financial constraints and the weakness of those institutions dealing with
the environment. However, more emphasis is given to the Social Action Plan (SAP) to
compensate for the past neglect by the development process; that is also an important
component of Agenda 21. In fact, SAP is also an environmental improvement initiative. It
seeks to increase literacy, expand health care, provide clean drinking water and sanitation,
and reduce population growth and pursue a community participation approach. Each of those
initiatives form an integral part of the environmental programme. Both SAP and NCS require
the active participation of the population during implementation. If implemented properly,
the NCS would generate approximately 800,000 jobs over a 10-year period as it is a labor-
intensive strategy. An projected 40 per cent of the public sector component of NCS projects
could be raised from aid contribution, while the balance could be raised through domestic
taxation.

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F. Planning institutions and planning processes

of the provincial government
The Planning and Development Departments/Boards are the provincial counterparts of the
Planning Commission. In NWFP it is the Planning, Environment and Development
Department.

At the provincial level, the Additional Chief Secretary has overall charge of the Planning,
Environment and Development Department. He is assisted by the Chief Economist, the
Secretary, Additional Secretaries and other section chiefs. Under the Planning, Environment
and Development Department there are different sections headed by Additional Secretaries
and section chiefs who liaise with sectoral departments. The functions of the Planning,
Environment and Development Department are:

o To prepare ADPs in coordination with all departments of the government, and

especially the Finance Department;
o To monitor the utilization of ADP funds;
o To coordinate the views of the provincial government on economic policy
issues;
o To coordinate external capital assistance for the provincial government;
o To preparation the Five-Year Plan and other provincial development plans.

Each district in the province has a District Development Advisory Committee (DDAC)
comprising representatives of the departments at the district level. The chairman of DDAC is
elected by popular vote in the district as a member of the Provincial Assembly. In the middle
of the year at each district headquarters the DDAC holds meetings with all heads of district
line departments in order to identify projects and development schemes for the next ADP.
Each department is required to identify projects (both ongoing and new) and complete a
Performa PC-I for submission to the Planning, Environment and Development Department
for the ADP by the end of December each year. The schemes are prepared by the field staff of
the district line departments in consultation with the district MPAs. The schemes are
scrutinized and given priorities and then sent through the Administrative Secretaries of the
departments in the province to the Planning, Environment and Development Department for
further processing. The Planning, Environment and Development Department holds meetings
with the representative secretaries of the individual line departments also discuss the projects
in all sectors for the next ADP. Based on those meetings a draft consolidated ADP is prepared
for the province. Approximately 80 per cent of the funds are allocated for ongoing projects
and the remaining 20 per cent for new schemes. The Chief Minister/Governor holds a
meeting with the Planning, Environment and Development Department officials,
Commissioners, and other heads/ secretaries of the line departments. Subsequently, the
provincial ADP is approved and it is sent to the federal government for final approval.

The approval of the ADP is conveyed to all the line departments/implementing agencies in
April each year. Following approval of the projects by the Provincial Development Working

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Party, the line departments/ implementing agencies prepare schemes for recruiting staff and
initiating action. DDAC has the authority to approve projects up to PRs 100 million
(although that limits changes from time to time). Projects with costs above that limit are sent
to CDWP, ECNEC and then NEC. The resources are then released by the Finance
Department for project implementation after 1 July each year.

Overall, the procedural framework of the Planning, Environment and Development

Department, and particularly the coordination for organizing Provincial Development
Working Party meetings, liaison with the federal government, sanctioning the release of
funding and other matters related to the project cycle, are efficient and satisfactory. The
problem area lies in the execution of proper monitoring and evaluation, and horizontal
coordination. The line departments are responsible for project implementation. Once the
departments have received approval for their projects and financial resources have been
allocated, the Planning, Environment and Development Department does not have a very
effective checking system. Although the line departments submit quarterly and annual
reviews, the Planning, Environment and Development Department has yet to develop a
viable system for effective on-site monitoring and evaluation. Therefore the provincial
government needs to introduce ways and means of monitoring, evaluating and carrying out
EIAs in order to make development planning more rational and effective. Monitoring and
evaluation are essential to enabling lessons to be drawn for future project formulation and for
making development more sustainable. In NWFP, the Planning, Environment and
Development Department has established a special unit for strengthening its monitoring
evaluation and other functions, but its performance is limited to organizing short courses of
one or two weeks on subjects such as report writing, rules of business, basic computing and
project cycles.

The whole planning process of the Planning, Environment and Development Department is
related to the sanctioning of financial resources for ADP. ADP formulation and planning is
directed by the political heads and other influential people. Public participation at large is not
part of the planning process. The line departments do not follow the planning criteria or
planning standards, which results in irrational and unsustainable planning. Each department
pursues its tasks independently, without any coordination with the other departments. For
example, the Communication and Works Department constructs roads without consulting
other line departments to enable them to develop their own projects accordingly. Roads are
built away from resources and human settlements. Schools and health facilities such as Basic
Health Units are built away from population points. Line departments do not prepare long- or
medium-term development plans. The result is delays in projects; for example, the Basic
Health Units are constructed but water and electricity supplies and roads are provided, so
they do not become operative for some time after completion.

At the same time, the planning offices are adversely affected by: (a) a lack of manpower and
other resources for the planning offices; (b) a lack of institutional capacity as well as training
in the principles of development planning, particularly at the regional/district level; (c) an
inadequate data base for the identification and analysis of problems, and the determination of

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the resource base for the solution of those problems; and (d) a lack of understanding of new
approaches and techniques such as geographic information systems (GIS), remote sensing
and EIA among officials dealing with planning. The results are duplication of effort, wastage
of resources and unsustainable development.

First Five-Year Plan (1955-60)

Pakistan's economic development planning began in 1948. By 1950 a six-year plan had been
drafted to guide government investment in developing the infrastructure. But the initial effort
was unsystematic, partly because of inadequate staffing. More formal planning--
incorporating overall targets, assessing resource availability, and assigning priorities--started
in 1953 with the drafting of the First Five-Year Plan (1955-60). In practice, this plan was not
implemented, however, mainly because political instability led to a neglect of economic
policy, but in 1958 the government renewed its commitment to planning by establishing the
Planning Commission. With the appointment of the Planning Board in 1953, work began
Five-Year Plan for economic development. The Board was responsible for reviewing
economic gains, and assessing the available materials of production. It was then to prepare a
five-year economic plan designed to utilize these materials to produce the greatest possible
economic gains. The Board held discussions with both the East Bengal Government and the
West Pakistan Administrative Council, as well as with representatives of industry and
members of government departments. Though the plan was to cover the years 1955-1960, the
first draft from the Board was published in May of 1956 In the Introduction, the Board
reported the circumstances it faced when preparing the Plan. Because of problems within the
government and various Ministries, many of the proposals that had been submitted to the
board for inclusion in the Plan had been incomplete and lacking important information. Even
worse, the Board noted that it had not even received proposals for some schemes that it felt
were important. Additionally, the government had difficulty collecting accurate economic
and social statistics, and theBoard was left to make its own estimates in some areas. Though
the board worked to correct these problems, it had to prepare the Draft while still missing
crucial information. The Plan made proposals for the allotting of government resources. In
total, it proposed a cost of Rs. 11,600 million. Rs. 800 million would be spent in the public
sector and the remaining Rs. 360 million in the private sector. It was designed to raise the
national income and the standard of living of the people; increase exports and reduce the

1
4
need for imports; increase employment; provide more social services; and increase the rate of
development. The Board expected the plan to increase national income by 20% by 1960, and
per-capita income by 12% The board acknowledged that the plan was “as large as is feasible,
and perhaps larger. Very serious difficulties will have to be faced and overcome, and even
then the rate of development is not likely to increase by 1960 as much as we should like.
Despite these words of caution, the Board published a Plan with ambitious goals for
increasing agriculture production and industrial output, and reducing dependence on imports.
By publishing the draft of the Plan a full year after it was to have begun, the Board was
already limiting the possible effect of the Plan. The Board was allowed to make
recommendations on the 1955-56 and 1956-57 budgets, even though the Plan had
yet to be completed or approved. After further revisions, the Plan was submitted to the
Economic Council in early 1957. After being considered at two separate Council meetings, it
was approved on April 15th 1957—two years after it was to have taken effect. Despite this
approval, the Plan never received official support from the highest
levels of the Pakistani government.

Successes and Failures:

While the effects of the FFYP are difficult to measure (due to the lateness of its approval, and
its minor influence on the 1955-56 and 1956-57 budgets), the economy of Pakistan grew and
improved during the years between 1955 and 1960. However, most of the goals and targets
articulated in the FFYP were not met. The best performance gains came in the industrial
sector. In 1955, large-scale industry contributed less than 5% to Pakistan’s GNP. By 1960,
that number had increased to 8%.29 While it was only a moderate increase, it was still a step
forward. During the period of 1954-60, large and medium scale industry increased
production by 80%, and bested the Plan’s goal of 75%. The installed power capacity also met
the Plan’s target. However, most of the economy performed well below the Plan’s goals. The
Plan had intended to increase food production by 9%, but there was no real increase seen in
food production during the Plan. Because of this, imports of food grains were 70.4% higher
than the plan had estimated, effectively increasing Pakistan’s dependence on imports.
Production of coal and oil both fell below ambitious Plan targets. As a result of the
underperformance of the economy, national income rose by 11% compared with the Plan’s
target of 20%. Per-capita income increased by 3% compared with the 7% that the plan had
estimated was possible.31 And, while industrial growth continued during the Plan, it slowed
to 12%; industrial growth in the five years preceding the plan had been around 25%.32

15
Assessing Failures:
While non-economic factors contributed to the failure of the FFYP to spur an
increase in the rate of economic growth, there were also major economic stumbling blocks
that prevented full realization of the FFYP. Government expenditures were higher than
predicted in the Plan—non-development expenditures ran a deficit of Rs. 280million, versus
the surplus of Rs. 1,000 million that the Plan had estimated. Earningsfrom exports were Rs.
946 million less than the Plan had projected. This decrease inexport earnings was due to a
decrease in products available for export, as well as price fluctuations. Due to the stagnation
in the agricultural sector, imports had to be increased by Rs. 2,165 million over the
projections in the Plan.33 This drained funds from other projects, resulting in shortfalls in
other areas of the Plan.

Conclusion
Partially because of an initial lack of industry, Pakistan’s economy made large
percentage gains and modest real gains in its industrial and manufacturing sectors in the early
years after partition. Although economic planning had been built into the government from
the beginning, it did not reach a highly organized state until the Planning Board was
convened to compose the First Five-Year Plan. Even at that point, because of inexperience
and poor government structure, arranging a plan for economic development was an inexact
science. While expectations for the plan were very high (and
the plan’s goals very ambitious), the Plan was plagued by setbacks from the earliest days of
the planning process. Due to a lack of specific data in many sectors of the economy, some
projects submitted to the Board were missing key information, and the Board had to make
 estimates in many areas of the Plan. Because of the late approval of the plan, it was difficult
to fully implement it. Additionally, price fluctuations and disappointing
food grain production led to fewer exports and more imports than the plan had predicted.
When these factors combined, the Plan under performed and missed most of its key
economic targets. Even though the Planning Board kcknowledged in its draft of the FFYP
that it would be difficult to reach the goals in the plan, the failure of the plan was still a
disappointment considering the relatively high levels of growth prior to implementation of
the Plan. The failure of the First Five-Year Plan provided a lesson to the Pakistan
government, and the experience of putting the plan together established a government system
for planning that would prove useful in the composition of future Five-YearPlans.

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6
SECOND FIVE YEAR PLAN (1960 –
65)
In marked contrast to the First Five Year Plan, Pakistan’s Second Five Year Plan was
launched under propitious conditions. The revolutionary regime, which took over in October
1958, had restored political stability in the country, for lack or which the First Five Year Plan
had failed to command wide political or public support. Continuous increase in prices was
brought under control and financial discipline was imposed. The administrative structure and
the institutional arrangements were improved. The Second Five Year Plan was approved and
put into operation in June 1960 just before the Second Five Year Plan period began. It was
revised after only one year of its operation as more detailed investigations and firmer cost
estimates became available. The revised plan was published in November 1961.

Allocation of Capital in the First Plan (1955-56 prices; in millions of rupees)

Pre- Plan First Plan First Plan
(Actual) (Target) (Actual)
Per cent of Per cent of Per cent of
Field of Development
Amount Total Amount Total Amount total
Agriculture (including V-AID) 390 6 1220 11 570 7
Irrigation 630 9 1260 12 780 10
Subtotal 1,020 15 2,480 23 1,350 17
Industry, fuels and minerals 2,420 36 3,050 28 2,430 31
Power 250 4 900 8 570 7
Subtotal 2,670 40 3,950 36 3,000 38
Education 360 5 460 4 440 6
Health 200 3 230 2 160 2
Social welfare and manpower training 50 1 100 1 30 neg
Housing 1450 22 1,490 14 1,530 20
Subtotal 2,060 31 2,280 21 2,160 28
Transport and communications 930 14 1,790 17 1,340 17
Miscellaneous na na 300 3 na na
Grand Total 6,680 100 10,800 100 7,850 100
Size of the Plan:
In the beginning, the size of the plan was Rs.19 billion. In April 1961, the Plan was revised
and extended to Rs.23 billion. Rs.12.4 billion were allocated to the public sector and 3.8
billion and 6.8 billion respectively to the semi - public and private sector. Rs.12.05 billion
were to be financed from internal resources and 10.5 billion from external resources. It meant
that 52 per cent of the total expenditure was to be financed through internal resources.

Objective and Targets:

a) During the Second Five Year Plan, it was expected that the National Income would
increase by 24 per cent and per capita income by 12 per cent

1
7

b) Employment Operation: it was decided that 2.5 million people would be given jobs within
the country and overseas.
c) Agriculture Sector: it was expected that agriculture production would increase by 21 per
cent during the Second Five Year Plan
Industrial Production: It was decided that industrial production would increase by 60 per cent
and much emphasis was given to heavy industries and inducements were given to private
investors to invest more in this sector.
a) Balance of Disparities: foreign exchange earnings would increase by 3 per cent per annum.
b) Regional Disparities: In order to reduce regional disparity between two parts of the
country, it was decided to invest more in East Pakistan.
c) Income, Investment Saving and Consumption: The fundamental objective of the Plan was
to increase GNP by 24 per cent. Since the population was expected to increase at the rate of 2
per cent, this would ensure an annual increase of at least 2.5 per cent in the per capital
income.

Priorities of the plan:

a) Highest price; It was given to the agriculture sector. It main objective was to reduce the
food-grain shortage and to achieve self-sufficiency in it at the end of the Second Five Year
Plan. It was decided to invest 24 per cent of the total investment in this sector.
b) Second Priority was given to the industrial sector and it was decided to invest 22 per cent
of the total investment in this sector
c)Third priority was given to the telephone and communication sector and it was decided to
invest 18 per cent of the total expenditure in his sector.
 Income, Investment Saving and Consumption in the Second Five Year Plan
(1960-61 prices; in million of rupees)
1959-60 1960-6 1962-63 1964-65
No Particulars
(base year) (actual) (estimated actual) (plan target)
1 Gross National product 30,000 31,780 33,440 37270
2 Rate of growth ( per cent) - 5.9 5.2 6.2
3 Gross investment 3,050 3,210 38,40 5910
4 (3) as a per cent of (1) 10.2 10.0 11.4 15.9
5 Gross domestic saving 1,820 2,030 2,370 3270
6 (5) as a per cent of (1) 6.0 6.4 7.1 8.8
7 External resources 1,300 1,120 1,430 2640
8 (7) as a per cent of (1) 4.3 3.5 4.3 7.1
9 Total consumption 28,250 29,690 31,070 34000
10 (9) as a per cent of (1) 94.0 93.5 93.0 91.2

18
Evaluation:
Pakistan’s Second Five Year Plan was fairly realistic in aiming at an increase of 24 per cent
in the national income. If the proposed investment had taken place, the
Plan’s target might have been exceeded.
The implementation of the Plan was fairly satisfactory. Several Problems arose, however,
which deserved the attention of the planners in the future. These include lack of basic
information on private investment, domestic saving, foreign exchange component and
income distribution; distortion of plan priorities in the course of actual implementation; an
inordinate rise in the cost of various projects above the original estimates; increase in the
general price-level affecting the cost of development; executive dependence on project-type
assistance which conflicts with the sanctity of national planning; and the lack of
consumption.

Sect oral Allocations in the Second Plan (in 1960-61 Prices)

Allocation (million rupees)

field of Development Private Sector Public Sector Total Percentage Share
Agriculture 900 2520 3420 15
Irrigation nil 2050 2050 9
subtotal 900 4570 5470 24

Industry 3660 1460 5120 22

Fuels and minerals 550 450 1000 4
subtotal 4210 1910 6129 26

Transport and communications 1330 2720 4050 18

Power 250 2090 2340 10
Housing and Settlements 1520 1890 3410 15
Education and Training 100 950 1050 4
Health 50 370 420 2
Manpower and Social Welfare 20 120 140 1
Subtotal 3270 8140 11410 50
Grand Total 8380 14620 23000 100

9 Objectives/Targets and Achievements
__________________________________________________________________
No Objectives/Targets
1 GNP 24 percent increase
2 Per capita income 12 percent
increase
3 Economic Growth rate A rate of
47 percent
4 Industry Large-scale
manufacturing sector 60 percent
increase in production
5 Food –grains 21 percent
increase imports to be for
Rs.22200 million
6 Foreign Exchange earnings 15
per cent increase imports to be
for Rs.22200 million
7 Foreign exchange gap
Estimated at Rs.10250 million
8 Savings 10 per cent increase in
average saving rate
9 Employment Creation of 3
million new jobs
10 Regional Development Creation
of 3 million new jobs
11 Education and health
1
Achievements/Position
30 per cent increase
15 per cent increase
5.5 per cent increase
161.4 per cent increase
27 per cent increase
18 per cent above the Plan
target imports of Rs.20680
million, or 6 per cent less
than be ceiling
Actual was Rs.7594 million
or 32 per cent less than the
Plan estimates
Increased from 6.5 per cent
in 1959-60 to 10.5 per cent
by the end of the plan period
3.6 million jobs actually
created
3.6 million jobs actually
created
Most of the targets were
achieved or exceeded
 12 Housing and urban 150000 new plots water
development 300000 new supplied to only 23 urban
residential plots water supply to areas
38 urban areas
13 Cash crops Large-scale shortfall in the
targets for the production of
jute, cotton, tobacco and
sugar cane
14 Irrigation Extension to 2.44 2.05 million acres 8.55
million acres of new land million acres
improved irrigation to 7.11
million acres
15 Installed power capacity 533700 KWs increase
508300 KWs increase
16 Communications 1300 new post 1546 new post offices 53300
offices 45700 new telephone new telephone connection
connections

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0
Consequence:
In spite of the success of the Plan in achieving and or
exceeding the Plan targets in many important fields,
there was great discontent amongst the masses resulting
from income inequalities generated by the development
strategy of the Plan. This discontent was one of the
important causes for the removal of President Ayub khan
in the late sixties.
 2
1
Third Five Year Plan (1965-70)
The Planning Commission started preparation for the Third Five Year Plan before the
completion of Second Five Year Plan. It was approved by the NEC in May 1965 and
was revised in 1966 because of the following reasons:
1. Pakistan went to war with India in 1965 and had to divert its resources from
development to defense.
2. In 1966, the climatic conditions adversely affected the agricultural production.

Size of the Plan:

A development program of Rs.52000 million was proposed for the Third Five Plan. A
Plan of this magnitude was necessary to maintain the rising tempo of development
which had already been built in the economy and to attain the main objectives of the
Plan. It was also in harmony with the country’s long-range strategy of accelerating the
growth rate. Without an undue strain on consumption. The suggested development
expenditure was expected to lead to an annual rate of growth of 6.5 per cent
compared with 5.2 per cent during the Second Plan period and the target of an
average rate of 7.2 per cent for the perspective plan. In determining the size of the
plan, due consideration had been given to the expected availability of financial
resources and the capacity of the country for effective implementation.
It was decided that 68 per cent of the total outlay was to be financed by external
resources.

Plan Objectives:
The objectives of the Third Plan were formulated within the rate work of the 20-
years Perspective Plan (1965-85) and in the light of the achievements and shortfalls
of the previous two Plans. The principal objectives set for the Third Plan were:
1. To attain rapid growth of the national economy, to ensure a breakthrough to
sustainable development in the shortest possible time, it was proposed to aim
at a minimum increase of 37 per cent in the GNP at constant prices over the
Third Plan as compared to 29 per cent in the Second Plan. The annual rate of
increase was projected at 6.5 per cent per annum in the Third Plan as against
5.2 per cent in the Second Plan.
2. to reduce the degree of inter-regional and intra-regional disparity, it was
proposed to reduce the existing level of disparity in income per head between
East and West Pakistan by increasing total income by 40 per cent and 35 per
cent respectively in the two regions.
2
2

3. to provide at least 5.5 million new job opportunities to absorb the entire
increase in the labor force during the existing level of unemployment by over
one-sixth.

4. To strengthen the balance of payments by increasing foreign exchange

earnings at a rate faster tan the GNP and by pushing ahead with import
substitution. It was expected that the country’s foreign exchange airings would
reach a level of \

Rs.4800 millions by 1970 compared with about Rs.3050 million at the end of the
Second Five Year Plan.
5. To arrest the growth of population by taking decisive steps towards population
control.
6. To provide better housing, more health services and greater facilities for
education, especially for the low income groups.

Strategy:
The strategy for the Third Five Year Plan grew from the lessons learnt from planned
development during the past 15 years and the targets set for the next 20 years under
the Perspective Plan. The past 15 years had witnessed a rapid rate of economic
development and building up of an infrastructure but there were certain imbalances,
especially in agriculture, education and social services, which had to be removed. The
 framework of the perspective Plan defined the general direction in which the
economy was expected to move in the next two decades. The basic rationale of the
Third Five Year Plan was formulated both in relation to past experience and future
targets.

Priorities:
The top priority was given to reduce regional disparity
b. Second priority was given to the agriculture and industrial sectors. Almost 13
per cent of the total expenditure was allocated to each sector.

Regional Distribution of the Total Third Plan Allocation

Distribution East Pakistan West Pakistan Total
Government financed program 16000 14000 30000
Private investment 11000 11000 22000
Total 27000 25000 52000

2
3
Evolution:
The Third Five Year Plan was formulated in the framework of a Perspective Plan
(1995-85) witch had also contained the long-term objectives of development, which
was committed to double the existing level of national income in the Fourth Five Year
Plan and to make it four fold in the Sixth Five Year Plan.

Income inequalities widened due reasons of:

a. There were certain sectors lime heavy industry, mining, transport and finance
etc. where extension of social control on the means of

b. Some of the generous tax concession given in the early phase of

industrialization in the same of import substitution and development of
industrial zone.

c. .In the third five year plan external aid was expected to finance 45 percent of
the plan expectation.

Targets:
1. To increase GDP by 6.5 percent per annum.
2. To increase family income by RS 900 per annum
3. To increase agriculture production by 5% per annum.
4. To increase industrial production by 9% per annum.
 5. To provide jobs to 4 million people during the plan period.
6. To provide electricity to 85% of the village of population.
7. To increase export from US$2.43 billion to UIS$4.91 billion by the end of the
plan.
8. To construct 15000 kms new roads from village to cities.
9. To lower dependence on foreign aid from 20 to 19% by the end of the plan.
10. 10. To increase the efficiency of private sector, certain effective measure s would
be taken so that the private sector may play its role effectively in the
development of the economy.
11. .To makes 3 million acres of land fit for cultivation which had been destroyed by
water logging and salinity?
12. It was decided to allocate 18.1 percent of the total expenditure to agriculture and
water sector, 20 percent to power to transportation, 15.6 percent to industry, 1.2
percent to minerals and 11.5 percent to social institutions.

2
4
Sector-wise Division of expenditure
Sectors Total Expenditure Percentage of
Total
Agriculture and water 89.72
18.1
Sources of power 100.00
20.0
Transportation 89.62
18.1
Industry 76.91
15.6
Minerals 6.05 1.2
Social institutions - -
(Health, education, etc) 59.91
11.5
Others Sectors 75.79
15.5
Total 498.00
100.0

Strategy:
1. (1)High Growth Momentum: high GDP growth rates and other related
macroeconomic variables are to be maintained.
i) Emphasis on increased efficiency in agriculture, particularly self-
sufficiency in oilseeds, expanding the exports of rice, cotton and fruits,
etc.
ii) Balanced development of service industries especially public services for
basic human needs.
iii) Balanced development of service industries, especially of private services
for government servants and private employees.
2. Rural Transformation: Increased opportunities for small farmers and provision of an
infrastructure.
3. Employment and Income Publics: Creation of about 4 million new jobs for emphasis
on small scale production in agriculture and industry, rural works program, vocational
training with a combination of income policy which related wages to productivity,
indicated salaries from fixed income growth.
4. Decentralization: To increase the share of provincial governments in the development
program of the public sector and also encouraging local bodies to participate in the
investment pans.
5. Backward Regions: Recognition of the tribal and Balochistan as economically
backward regions and provision of special funds for specific development program
in these regions.
2
5

6. Self-Reliance: Continuing import substitution and export promotion policies and

reducing dependence on foreign aid.
7. Achievements and Failure:-
8. During the plan period GDP was expected to increase by 6.6 % per annum. It was
base on the performance of agriculture and the manufacturing sector. Because this
sector could not play their roles effectively, the plane seemed helpless in achieving its
targets and its objectives further, aggregate growth roots of GNP and GDP were
related to expect increasingly rate of saving and investment during the plan period.
9. The savings were expected to increase form 13 percent to 25 percent and investment
rate form 6.5% to 7.55 per annum during the plan period. But unfortunately these
targets could not be achieved in the sixth five year plan.
10. The rate of net borrowing and net real foreign saving were expected to decline
(because of the decline in foreign limitedness). It was decided to increase domestic
saving but the plan did not assumption any argument of evidence about how the
saving rate would increase and how much would we saved by the private sector. The
basic was a short fall in remittances. Minor corps due by only 3.6% per year as
against a growth rate of 7% per annum and envisaged in the plan.
11. The sixth five year plan was a mixed success. It was described as a qualified success
by the planning and development division. Though it fulfill must a targets, there were
 some failures. On the whole, it was a good plan.

2
6
“Forth five year plan (1970-75)”
By the end of the third year plan. Pakistan had two decades of development. The economy
had diversified significantly and size national product had expanded substantially. Its
structure had developed .the practice and technique of production had been modernized
although inflow of foreign assistance helps financing the ascending development
expenditure. The burden was also born by a size able domestic saving effort, especially in
relation the low level of percapita income. This development phase had its limitation as well.
The population growth rate rose substantially.

Size of the plan:

The size of the forth five year plan was determined after a careful review of the following
factors.
1. Min necessary requirements for the investment program in the public and private
sector.
2. The urgent requirements of social program and services.
3. The economic and political compulsion for a visible and early improvement in living
standard and equitable distribution of economic resources.
4. The likely availability of domestic resources without imposing intolerable and hard
ships.
5. Expectation regarding the future availability of foreign assistance.
The forth five year plan was based on a total availability of Rs 22000 million of foreign
assistance compared with a total inflow of around Rs 16000 million in the third five year
plan.

Objectives:
The principle objective of the plan were spelt out clearly in the document entitled “ socio
economic objectives of the fourth five year plan” which was approved by the NEC in
Nov 1968. These were
1. To maintain the tempo of the development in the country through a determined effort
to secure maximum and most efficient utilization of our material and human
resources.
2. To reduce inter regional and intra regional disparity in percapita income.
3. To make the economy increasingly self reliant in most essential field.
4. To direct the forces of social and economic change in society.

Targets:
1. To attain a annual growth rate of at least 6.5% in the GNP which would permit the per
capita income.
2. To reduce the disparity in percapita income b/w various region at the fastest possible
rate.
3.
2
7

4. To increase percapita consumption of food grains from 15.5 to 16.8 ounce per day by
increasing rise production.
5. To reduce the extent of unemployment and underemployment in the country
providing 7.5 million new jobs opportunities.
6. To evolve an income and price policy through which in increase in percapita income
from price erosion.
7. To increase export at annual rate of at least 8.5%.
Etc…..

Strategy:
1. The growth strategy of the forth five year plan based on agriculture.
2. West Pakistan development was given due to consideration were given priority to West
Pakistan.
3. Detailed production targets had been spelt out in each sector to realized the over all and
regional growth targets.

Priorities:
 1. Water and power sector given highest priority 31 % investment were expected to be
allocated to this sector.
2. Communication and transport sector were given second priority 16.6% of total
investment was to be spent on this sector.
3. Agriculture sector were given third priority by allocating 11.22% of investment.

Result of the plan:

The actual expenditures during 1970-72 were far below the plan allocations for these years
and so the plan was abandoned after the separation of East Pakistan in 1971.this plan were
officially escaped.

2
8

“Non plan period (1970-

78)”

“The period from 1970-78 is considered to be the

non plan period in the history of Pakistan. The ppp
govt decided to manage the economy through annual
plans rather than through a comprehensive five year
plan. Mainly because of considerable economic and
political uncertainties”.

2
9

“Fifth five year plan (1978-

83)”
Since Dec 1971 Pakistan economy operating with out five year plan. Annual
development plan were introduce and implemented by the ppp govt. Pakistan had go
through a time which may be termed as non plan period. The annual development
plan totally fails to accelerate the peace of economic development. The martial govt
in 1977 decided to formulate the fifth five year plan which was launched in a period
of serious economic difficulties. The commodity producing sector had been stagnant
which pushed the inflation rate.

Objectives:
a. Development of rural areas would receive priority. That would be attaining
 through various program and policies. Provision of critical inputs
b. Improvement of extension services offered to the farmers would lead to
increase in productivity, incomes and living standard.
c. Easing of urban problems would continue to receive due attention. In
particularly water supply, drainage, housing and transport facilities would be
expanded in cities and towns.
d. Development of backward region would be stressed. To this end the wide
spread extension of social services.
e. Meeting of the basic need of the population and promotion of equity would be
by the objectives of the plan.
f. Laying down the formation of long term economic growth will be an
important objective of the plan.

Targets:
1. To increase the national income 7.2 % per annum and per capita income by 4.2%
per annum.
2. It was decided that 3.8 million people will get job inside and 0.4 out side the
country.
3. The agricultural sector increases by 6% per annum while the industrial
production will increase by the 10%.
4. National saving as a percentage of GNP was expected to increase from 12.6% to
10.6 percent.
5. US$ 22billion was the export earnings target.

3
0
Achievement and failure:
The Zia government accorded more importance to planning. The Fifth Five-
Year Plan (1978-83) was an attempt to stabilize the economy and improve the
standard of living of the poorest segment of the population. Increased defense
expenditures and a flood of refugees to Pakistan after the Soviet invasion of
Afghanistan in December 1979, as well as the sharp increase in international
oil prices in 1979-80, drew resources away from planned investments (see
Pakistan Becomes a Frontline State ),. Nevertheless, some of the plan's goals
were attained. Many of
the controls on industry were liberalized or abolished, the balance of payments
deficit was kept under control, and Pakistan became self-sufficient in all basic
foodstuffs with the exception of edible oils. Yet the plan failed to stimulate
substantial private industrial investment and to raise significantly the
expenditure on rural infrastructure development. The need to educate its
disabled population has gained increasing recognition in Pakistan in the last
two decades. Interest in the field was aroused by the International Year for
Disabled Persons (1981), and by the United Nations Declaration of 1983-92 as
the Decade of the Disabled. In the 1980s, the Government of Pakistan
undertook a crash program of expansion of special educational provision, thus
improving both the quantity and quality of existing facilities. However, the
continuing absence of any form of legislation for the education of children
with special educational needs, continues to deny the great majority of these
children the right to education. The Development of Education, and Special
Education in Pakistan

Despite an unprecedented increase in primary education the Government has

been unable to achieve its target of providing universal primary education.
Primary education is even now available to only 60 percent of children
(Pakistan Planning Commission 1988). Plans for providing universal free and
primary education had to be shelved because of the huge expenditure
involved, which the national economy was unable to sustain (Dani 1986).
Unfortunately there has been no significant change in this unhappy state of
affairs in the 1990s. Thompson (1998) indicates that the drop out rate before
completion of primary education is very high, and nearly seven million
children remain out of school.

An experience of this kind is not unique to Pakistan. Haddad (1990) cites

evidence to show that this situation is found to prevail in other developing
nations. Writing on the proceedings of the World Conference on Education for

3
1

All, he states that the phenomenal expansion of the national educational

systems since the 1950s has continually increased the number and proportion
of children in school. However, the absolute number of out-of-school children
has at the same time increased dramatically. The responsibility of the
Government to educate its handicapped pupils was recognized in the
Commission on National Education (Pakistan Ministry of Education 1959).
But the proposal to provide education for these children was not made until
the Education Policy 1972-1980 (Danni 1986), and in the Fifth Five Year Plan
 (Pakistan Planning Commission 1978) a modest sum was allocated to special
education.

In the 1980s, due to the efforts of the late President Zia-ul-Haq, much greater
government involvement was witnessed and increased budgetary provision for
special education (though still inadequate) was made. During the Sixth Plan
(1983-1988), the social welfare programme concentrated on strengthening
existing institutions of social welfare and of special education, both
government and non-government.

“Sixth Five-Year Plan (1983-

88)”
The Sixth Five-Year Plan (1983-88) represented a significant shift toward the
private sector. It was designed to tackle some of the major problems of the
economy: low investment and savings ratios; low agricultural productivity;
heavy reliance on imported energy; and low spending on health and education.
The economy grew at the targeted average of 6.5 percent during the plan
period and would have exceeded the target if it had not been for severe
droughts in 1986 and 1987.

Objectives:
A reduction in the population growth rate was one of the objectives
Of the Government of Pakistan’s Sixth Five-Year Plan (1985-1988) because
it will serve the twin objectives of increasing the country’s capacity to save
and invest while improving the per capita availability of goods and social services.
A multi-sect oral, multi-dimensional approach to family planning has
been adopted which implies (a) replacement of the traditional narrow concept
of family planning by a comprehensive programme dealing with family health
(Especially that of children and mothers), responsible parenthood, individual
Well-being and family planning, (b) community involvement including that
of non-governmental organizations and (c) involvement of government line
3
2

departments, especially those having health outlets for providing family planning
services. The present family welfare programme has been split up into
about 30 projects, such as the Family Welfare Centre Project, the Reproductive
Health Project (for contraceptive surgery) and the Communication Project.
Although mass media such as the radio, newspapers and cinema are being
Used to popularize the use of contraceptives, some religious leaders are opposed
to family planning and the advertisement of contraceptives. Nonetheless, constant
efforts are being made to enroll the support of community leaders and
others in the social marketing of contraceptives on a commission basis.
While there is no incentive system in Pakistan’s family planning programme,
a small amount of money is given to couples undergoing sterilization
as compensation for the work-time lost in the process of sterilization.

The per capita income in 1990-91 was Rs. 9,000 (US$ 360). An estimated third of
the, Population live below the poverty line. Nearly
three-fourths live in rural areas and more than half, are employed in
agriculture. The high rate of population growth places an additional
burden on the economy as well as the social structure of the country .

Literacy/Education:
At 31 per cent, the country's literacy rate ranks among the world's
lowest. A 1985 estimate showed that the female literacy was 18 versus
43 for males. In the province of Baluchistan, the 1981 census showed,
only four percent female literacy. Primary school enrolment is
estimated at 50 per cent overall and 32 per cent for females.

Status of women:
Female participation in society outside the family is constrained by
social, political and religious factors. Labour force participation
for women outside the home and for wages is extremely limited. Females
on average have 6.8 births and 600 per 100,000 women having live
births die of childbirth-related problems. Female enrolment in primary
school is 32 per cent. Investment in human resources has considerable
room for improvement. In terms of relative ranking among all
countries, Pakistan has one of the highest fertility rates; one of the
highest maternal mortality rates; the fourth highest ranking for
percentage of low birth weights (28 per cent in 1984); and the
world's, sixth lowest female to male primary school enrolment ratio.

3
3
Population:
Pakistan has increased to four times its population at the time of
Independence (1947): from 32.5 to an estimated 118 million by 1991. At
 the last census in 1981, the population was 84.3 million [4]. The 1961
census, including West and East Pakistan showed an annual population
increase of 2.3 per cent during the preceding decade. The Population
Growth Estimation project placed it at 3.3 per cent for 1962-65. The
growth rate since independence was estimated at 2.9 per cent per year. The present
population growth rate is about 3.1 per cent which
means about 3.5 million more births than deaths per year. The high
growth rate also reflects a substantial decline in the death rate
since Independence.

According to the 1981 census, 72 per cent of the population lived in

rural areas. Urban growth, however, has been dramatic over the past,
ten years [2] and an estimated third of the people live in urban
areas. Slum conditions are becoming increasingly widespread in cities
such as Karachi, which had an estimated population of more than seven
million in 1989. According to the 1981 Census, 98 per cent of the
population was Muslim.

The need to educate its disabled population has gained increasing recognition in Pakistan in
the last two decades. Interest in the field was aroused by the International Year for Disabled
Persons (1981), and by the United Nations Declaration of 1983-92 as the Decade of the
Disabled. In the 1980s, the Government of Pakistan undertook a crash programme of
expansion of special educational provision, thus improving both the quantity and quality of
existing facilities. However, the continuing absence of any form of legislation for the
education of children with special educational needs, continues to deny the great majority of
these children the right to education.

The Development of Education, and Special

Education by sixth plan:
Despite an unprecedented increase in primary education the Government has been unable to
achieve its target of providing universal primary education. Primary education is even now
available to only 60 percent of children (Pakistan Planning Commission 1988). Plans for
providing universal free and primary education had to be shelved because of the huge
expenditure involved, which the national economy was unable to sustain (Dani 1986).
Unfortunately there has been no significant change in this unhappy state of affairs in the
1990s. Thompson (1998) indicates that the drop out rate before completion of primary
education is very high, and nearly seven million children remain out of school.

3
4
An experience of this kind is not unique to Pakistan. Haddad (1990) cites evidence to show
that this situation is found to prevail in other developing nations. Writing on the proceedings
of the World Conference on Education for All, he states that the phenomenal expansion of the
national educational systems since the 1950s has continually increased the number and
proportion of children in school. However, the absolute number of out-of-school children has
at the same time increased dramatically.

“SEVENTH FIVE YEAR PLAN (1988-93)”

The seventh five year plan performance has been include in the Eighth five year plan
(1993-98) on pages 3-16 for quick reference, it is reproduced below.
The seventh five year plan was prepared with in a broad based Scio-economic
framework of a 15 years perspective (1988-2003), emphasizing efficient growth in
output on one hand and improving the quality of life on the other. Of the perspective
plan total incremental targets, about 23.6 per cent of GDP, 22 per cent of investment,
23.8 per cent of exports, 26.2 per cent of import and 21 per cent of revenue, were
envisaged to be attained during the seventh plan. It attempted to address the
deficiencies in social sectors, education, health, women welfare development etc, as
well as economic problems like fiscal and current account deficits, inflation and
unemployment. Many policy reforms were launched during the plan period and a new
economic edifice on free enterprise, open market privatization deregulation and
liberalization has been raised.
The tempo of growth was effected by unforeseen events of domestic and international
fronts including the economic construction of Eastern Europe and the framework
Soviet Union, recession in Pakistan’s export markets, the Gulf War, delay in the
settlement of the Afghan Issue, political uncertainties on the domestic front, frequent
changes of government, civil disturbances in 1989-90 and floods of 1988-89 and
1992-93. However, the overall performance has been satisfactory.

Growth Performance:

The growth performance, though below the plan target, was in line with the historical
trends and satisfactory in the context of internal and externals constraints. GDP grew
by 5.0 per cent (target 6.5 percent), agriculture 3.8 percent (target4.7 percent),
manufacturing 5.9 percent (target 8.4 percent) and other sectors 5.3 percent (target of
6.7 percent). In aggregate terms, over 74 percent of the incremental outputs target was
achieved. However, self-reliance in the production of wheat, edible oils, iron-core,
crude oil and capital goods did not show a significant improvement.

35

Macroeconomic Framework:
The fiscal scenario conceived in the plan did not materialize. Targets relating to
additional resources and control of current expenditure were not achieved. As a
consequence of deficits, the domestic debt more than double during the plan period,
rising from Rs.290 billion in 1987-88 to Rs. 605 billion in 1992-93.
The annual growth in monetary assets at 15.2 percent was higher than the plan target
of 12.5 percent but close to the nominal growth of GNP at 14.9 percent. Domestic
credit increased to 179.9 billion. The government credit expanded to Rs.190.6 billion
against the target of RS. 64.2 billion. This was due mainly to an increase in budgetary
support, which reached Rs. 175.6 billion against the plan target of Rs. 51.7 billion.

GDPYear Percentage
1988-89 7.4
1989-90 6.5
1990-91 8.7
1991-92 7.5
1992-93 7.9

Fortunately, the ‘crowding out’ effect in credit allocation was restrained reflecting the
emphasis on private investment. Credit utilization was Rs. 155.5 billion against the
plan allocation of Rs. 115.2 billion.
On the external side the current account deficit rose from US$1.68 billion in 87-88 to
US$ 3.69 billion in 1992-93. This was mainly a result of deterioration in the
invisible, i.e., fall in remittances and increase in service payments. As a corrective
measure rupee exchange rate was brought close to market value. The dollar-rupee
exchange rates went up from Rs. 18.12 per dollar in July 1998 to Rs. 27.15 per dollar
in June 1993.
For the Public sector development program, the seventh Five Year Plan had provided
an outlays of Rs. 350 billion at 1987-88 prices. The actual expenditure is estimated to
amount to Rs. 321.4 billion, showing an achievement of 91.8 percent.

Economic Structure:
The plan marks a distinct change in economic structure, spurred by a steady growth
in line with the earlier plans; the industrial sector increased its share of total out put
steadily, surpassing agriculture for first time. Since the First Five Year Plan, the share
of industrial sector in GDP has gone up from 15 percent to 26.7 percent and
36
that of services sector from 38 percent to 49.5 percent while agriculture has gone
sown from 46.6 percent to 24.5 percent.
Sectoral Picture:
Agriculture:
The trust of the plan was on the achievement of self-sufficiently in basic food items
and improvement in productivity through efficient use of inputs and credit. The
farmers were to be provided remunerative support prices. Research and extensions
were to be strengthened financial outlay of agriculture was 7.552 billion at 1987-88
prices against the PSDP allocation of RS. 8.167 billion Indicating 92.5 percent
utilization. The subsidy on fertilizer was RS.4.971 billion against the plan allocation
of Rs3.3 billion. Besides the Public sector development outlay, the private sector
invested RS. 51.6 billion at 1987-88 prices in agriculture.
The growth was 3.8 percent against the Plan target of 4.7 percent. The shortfall
mainly due to setback on account of devastating floods in 1988-89 and 1992-93.
There was a remarkable increase in cotton production during the plan period. Its
production increase to 12.8 million bales in 1992-93 due to floods and leaf curl virus.
However, on the basis of Five Year Plan, total output targets of cotton, sugarcane,
potato and onion were Exceeded while those of wheat, maize and rice were achieved
to the extent of 99 percent, 90.5 percent and 83.9 percent respectively. On the other
hand a substantial shortfall was experienced in the output of non-traditional oilseeds,
gram, rape seeds and mustard. The overall growth performance of the livestock sub-
sector was 5.8 percent against the target of 5.3 percent.

Manufacturing:
The value added in manufacturing increased by 5.9 percent against the target of 8.1
percent a year. The entire shortfall from the target is attributed to the large scale
manufacturing sector which could only attain a growth rate of 4.9 percent against the
target of 8.0 percent. The shortfall can be attributed to the law and order situation,
infrastructural constraints, and delay in the commissioning of new projects, non
availability of raw material and a world wide recession.The production targets of
motor cycles, soda , ash, caustic soda, cotton yarn cloth, trucks and busses were
achieved and in a few cases exceeded, while a short fall was experienced in the
production of vegetable ghee, cement, nitrogenous fertilizer, steel billets, rolled
sheets, cigarettes, tractors, papers, bicycles and petroleum products. Growth of
bicycles and petroleum products. Growth of engineering and capital goods industries
was far below the expectations.
 37
A sum of Rs. 10.07 billion was allocated to the various public corporations in the
manufacturing sectors for BMR and creation of new capacities. Most of the planned
projects were completed by the end of seventh Plan.

Against the investment target of Rs. 87.5 billions in the manufacturing sec torn (at
constant prices of 1987-88), the private industrial investment amounted to Rs. 14.3
billion at 1987-88 prices. Foreign private investment in the manufacturing sector was
Rs. 27 billion against the target of Rs. 26 billion at 1987-88 prices.

Mineral:
The Seventh Five Year Plan places great emphasis on larging the production base
of the mineral sector through rapid expansion of local and foreign investment.
During the Seventh Five Year Plan, period different collaborative development
projects were started. These projects have helped in the training of GSP, PMDC and
RDC personnel.
The seventh Five Year Plan allocated Rs. 7.012 billion (Rs.3.122 billion from the
budget and Rs. 3.89 billion from the corporations program) for the development of
the mineral sector. An amount of Rs. 1.597 billion (at constant prices of 1987-88) has
been utilized against the budgetary provision of RS. 3.12 billion. Rs 0.625 billion has
been utilized

against the target of Rs. 3.89 billion in the public corporations program. Besides the
public sector, Private sector invested Rs. 0.903 billion in the mineral sector.

Energy:
Expeditious development of indigenous resources, comprehensives energy prizing policy
and conservation of energy were the main ingredients of the energy strategy.
Oil extraction in the country has increased from 44.684 barrels per day during 1987-88 to
60,000 barrels per day in 1992-93 against the target of 76,000 barrels per day, showing 79
percent achievement. About 217 wells were drilled during the plan period against the target
of 375, showing 57.9 percent achievement of the target.
Total installed capacity for power increased from 6,794 MW to 9,786 MW. The number of
additional villages electrified was 17,447 against the plan target of 10,336 showing 169
percent achievements. A total of 2.7 million new electric connections was provided during
the Seventh Five Year Plan Period.
 3
8
Rural Development:
For the development of rural areas, a comprehensive program involving and outlay of rays
112.2 billion was envisaged in the plan. For this purpose about 9,000 kms roads were
constructed under the rural slash formed to market roads program against the plan target of
8,500 Kms.

Regional Development:
The areas which are included in the regional plan are Azad Kashmir, Northern Areas, Chitral
and the Federal Administrated Tribal Area which share certain common physical location and
economic characteristics. During the plan period the amount of Rs. 13 .2 billion at 1987-88
prices was allocated for the special areas and out of this Rs. 8.75 billion at 1987-88 prices
were utilized, showing utilization of 66.3 percent Rs. 5.2 billion were allocated for Azad
Kashmir against which an amount of Rs. 3.5 billion was utilized. Northern Areas were
provided Rs. 2.7 billion out of which Rs. 2, 05 billion were utilized. Against an allocation of
Rs. 5.3 billion for Fata and Fata/dc, and amount of Rs. 3.2 billion was utilized.

Transport and Communications:

The seventh Plan centered for the rehabilitation of assets and a modest expansion in the
capacities of the Road, railways and Port sub-sectors. The plan envisaged an improvement in
rail/road traffic ratio from 20:80 in 1987-88 to 26:74 in 1992-93 through allocating long lead
freight traffic to railways and short lead traffic to roads. Induction of the private sector in
highway development, shipping, road construction, domestic aviation services and
telecommunications was envisaged. Resurfacing and maintains of highways and the
development of port facilities for container traffic were to be taken. Besides modernizing the
Karachi shipyard and engineering works, possibilities of developing existing river and land
networks for inland navigation from Port Qasim to Kalabagh and Lahore were to be
explored.
On going project of Port Qasim (phase 1) was almost completed. Gawadar Fish and the
Miniport Were completed.
In civil Aviation the two major projects, via new terminal completed at Karachi and
Aeronautical Communications and control (AC and C) system were completed and the old
runway at Lahore Airport was upgraded for Airbus A300 B4 operations, PIA acquired four
Airbuses A310-300 and 4 used Fokker F27 Aircrafts during the Plan Period. Domestic traffic
carried by PIA fell short of the plan target while international traffic exceeded the Plan target.
The private sector was inducted in Airline business.
An investment of Rs26.654 billion (at 1987-88 prices) in the Federal and Provincial sector
and Rs. 39.569 billion in the Public sector Corporation was made against the plan allocation
of RS. 29.2 billion And Rs. 32.30 billion respectively.
During the Plan period, Rs. 27.368 billion and Rs. 28.786 billion were utilized for Federal
and Provincial Public Sector and Public Corporations program. Utilization stood at 93.7
percent and 89.12 percent in the Federal Public Sector and the Public Sector Corporation
retrospectively and the overall utilization was 91.3 percent.
 3
9
Irrigation and Drainage:
During the seventh Year Plan anti-water logging and salinity control program was given high
priority.
Chashma Right Bank Canal on Phase II and Pat Feeder Canal Rehabilitation projects were
undertaken. About 5,500 tube wells were installed on annual basis in the private sector.
Besides, many small irrigation schemes were executed. As a result, 1.53 MHM of additional
water and additional cultivable land of 10.12 million hectares became available.
To conserve irrigation water, irrigation system Rehabilitation project II, command Water
Management and On-Farm Water Management Program were implemented. The Command
water Management Project and Phase II of the ON-farm Water Management (OFWM)
programs have been completed and Phase III dovetailed with Phase II.
About to SCARPS and Pilot SCRAP transition Project in Punjab have also been completed,
which would protect 2.13 MA (0.86 MHA) of disastrous areas.
A sum of Rs. 21.5 billion (at 1987-88 prices) was utilized during the seventh Plan against an
allocation of Rs. 28.4 billion reflecting 75.7 percent utilization. Utilization of ADP allocation
has however, been estimated at 10.5 percent.

Science and Technology:

The main goals of sector were to promote productivity and competitiveness in agriculture
and industry and to enhance the efficiency of transport, energy, health and other sectors by
giving boost to technological development effort and R and D activities.
The Seventh Plan could not fully achieve the integration of Science and technology with
development plans and production sectors. Some Progress, however, was made in improving
the infrastructure equipment and other facilities and other institutions like PCSIR, PCAT,
PCRWR, etc. Some potential revenue generating projects have been started by NIO, PCSIR,
NCTT,
CAMB, NIE, PARC, HDIP, NIH and SUPARCO etc, which is beginning towards self-
financing of activities of Science and Technology sector. No attractive incentives were given
to the private
Sector to encourage investment in R and D.A sum of Rs. 2.25 billion was allocated to
Science and Technology against which the estimated expenditure is Rs. 1.61 billion (at 1987-
88 prices).

Education and Training:

In 1987-88 prices, the total expenditure of the education sector program was RS. 19.0 billion
Against an allocation of Rs. 23.11 billion. Thus, in real term, the overall financial
expenditure has been 82 percent of the plan allocation. Consequently there have been
shortfalls in the achievement of physical targets. Sum of the important policy initiatives
proposed in the seventh Plan could not be implemented. At primary level, about 21,000
primaries and 13,000 mosques school were established against the target of 34,613 primary

4
0

schools and 20,000 mosque schools. Buildings were constructed for 16,500 shelters less
schools against the target of 20,075. About 13,000 class rooms were added in the existing
primary schools against the target of 8,750. About 3.1 million additional children (including
1.5million girls) were enrolled at the primary level against the plan target of 4.6 million
(including 2.7 million girls).
During the Plan Period, about 4,201 primary and 2,600 middle Schools were upgraded to
middle and secondary level against the target of 6,500 primary and 3,700 middle schools
respectively. Besides 110 new High schools were established and intermediate classes were
added in more than368 secondary school respectively. 2 million additional students were
enrolled at secondary level in class VI-X against the target of 1.88 million. In quantitative
terms, about 100 percent of the enrolment target has been achieved but much remain to be
done for improving the quality and relevance of secondary education.
The Seventh Plan Period also a witnessed a number of initiatives of managerial nature for the
acceleration of educational development, these include:
1. Education foundation were established for encouraging the private sector's participation in
the establishment of new institutions on non- commercial basis, particularly in the rural
areas.
2. The 'Tameer-e-Watan Program was launched. Under this program the legislators identify
the immediate needs of the people at the grass root level and develop projects for
implementation through normal channel under this supervision.
3. Foreign assistance for the education sectors was made available to the provinces over and
their normal ADP shares.
4. The pay scales of school teachers were upgraded one steps and the upper age limit for the
appointment of primary schools teachers was relaxed.

Health:
Against the plan target of 1,882 Basic Health Units, 1,660 units were established reflecting
88.2 percent achievements.106 Rural health Centers were set up against the target of 121
reflecting 87.6 percent achievement. Only 50 Urban Health Centers were established against
the target of 227.
Against the target of 16,252 hospital beds, and 17528 doctors against the target of
17,535were added. Against the target of 800 dentists and 10,240 nurses, 775 dentists and
8,786 nurses were hired. Similarly, 21,259 per-medics against the target of 35,950 and 26,635
TBAs against the target of 27,150 were trained.16.8 million Children were immunized
against a target of 18.8 million and approximately 43.3 million packets of ORS against the
target of 50.4 million packets were distributed.Financial utilization of Rs. 10.0 billion under
PSDP against the allocation of Rs. 12.8 billion for health sector is about 78.1 percent.

4
1
Women Development:
The Ministry of Women development sponsored a variety of small projects for the welfare of
women in collaboration with Federal and Provincial line Departments and NGOs. These
project included community/ welfare centre, working women hostels, industrial homes,
training centers, water supply schemes, women cooperatives, darul falah/amans, legal and
centers, libraries, strengthening of females educational/technical institutions, grant-in-aid for
women programs and NGOs. Special credit facilities for women were arranged through the
First women Bank.
Against the allocation of Rs. 900.0 million, the total utilization is estimated to be Rs. 648.493
million (at 1987-88 prices), indicating 72 percent utilization rate.

Population and Social Planning:

The main objective of the population of Welfare program during the Seventh plan was
fertility management by voluntary birth intervals and birth preventions through multi-sect
oral activities as well as maternal and child health system, public, private, NGO and
Commercial sectors were involved in service delivery.
The birth prevention target for the seventh plan was 3.17 million. The program achieved 73
percent of the target by preventing about 2.31 million births. This was achieved by
establishing 1,505 service outlets and involving 3,168 public sector health outlet(federal and
provincial), 580 outlets of (NGOs), 5,000 Traditional Birth Attendants(TBAs), 2,500
Registered Private Medical
Practitioners and 4,000 Hakims and Homeopaths in the program.
The Seventh Plan provision for the program was Rs. 3.535 billion and total PSDP allocation
amounted to Rs. 3.040 billion at 1987-88 prices. The program, however, utilized an estimated
amount of Rs. 3.047 billion which is 100 percent of PSDP and 86 percent of the Plan
allocation.

Employment and man power:

Initial employment projection of seventh plan indicated substantial increase in
unemployment in the form of open unemployment and under employment. In the view of
low elasticity of employment with respect to gdp growth the plan emphasized the relatively
more labor intensive sectors or alleviates the expected unemployment pressure. For this
purpose the seventh plan postulated a 10 point strategy expected to generate 6.1 million jobs
in Pakistan.
The seventh plan allocated RS 2.56 billion for development programmed in the manpower
sector against which Rs 1,074 billion actually spent. About 3,122 million additional jobs
were created against seventh economic plan of Pakistan.

4
2

Culture, sports and tourism:

The seventh plan followed an integrated approach to wards the cultural development,
covering all important dimentions, preservation of cultural heritage, histirical and
archeological research, cultural history, anthropolgy, arts and craft and architecture. Major
portions of PSDP allocation provided for archeology and achieves were spent on the
preservation of MOEN-JO-DARO.
The renovation of Quid azam house and archive building phase one was completed.Malam
jaba skinning resort was constructed.

Mass media:
The seventh Plan aimed at expanding the coverage to the entire population through Radio
and T.V. major project was the second T.V channel under Japanese grand of RS.507 million
and Government support of Rs.119 million. Be side, thenical and production facilities at
Karachi. Lahore and Islamabad T.V centers were also provided. Only one three hundred
KWMW transmitter at Khuzdar brought at size able more over two new small power
transmitter at Gilgit, Chitral and Abbott Abad were added.

Physical Planning and Housing:

The seven five year plan aimed at that reducing the gap b/w the demand and supply of
houses. Against the target of 65000 plots in the urban aria, 630000 plots were developed. In
the rural area, 2.9 million 7- Mahla plots were allotted to the low-income shelters less against
the target of 202 million. In the rural areas 50 percent population has access to water supply
and 17 percent sanitation facilities.

Social welfare:
The seventh plan emphasizing expanding national production through the development of
physical resources, ensured various polices measure and necessary programs in order to
promote and enhance a social welfare services for the betterment of physically and socially
handicapped population in the country. The Social Action Programs have been designed to
harmonize the forces of social change and offset their advice repercussions caused by the
total development processes. Zakat and Usher system for helping the indigent and poor
remained in operation, A policy was enforced to follow a collaborative effort of the
government and the non- government organizations (NGOs) in the implementation of Social
Welfare sector was provided an amount of Rs.0.794 billion against which RS. 0.602 Billion
were utilized.

4
3

Achievements
While the growth targets were not achieved, the overall performance was satisfactory. GDP
growths at 5 per cent a year, agriculture 3.8 per cent and manufacturing 5.9 per cent.
Investment in fixed assets amounting to Rs. 660 billion due to a surge in private investment,
which exceeded the target by 19.6 per cent. Substantial advances were made in the physical
infrastructure. Gas production and power generation increased by 34 per cent and 44 per cent
respectively.
The structure of public expenditure depicted a shift to the corporate sector. The investment by
public corporations went up from Rs. 49.0 billion to Rs. 69.8 billion in 1992-93 in response
to a large autonomy and deleing from the budgetary process.The economy went through a
process of deregulation and liberalization. Foreign exchange regulation, sanctioning
procedures for industrial units and trade policy were deregulated and liberalized.

Eighth Five Plan (1993-98)

The Eighth five Year Plans was released by the Government of Pakistan in June 1994. It
consists of four parts namely; Perspective and Basic Framework, Main Agenda, Sect oral
Policies and Programs and Statistical Appendix Tables.
The govt.of Pakistan, planning commission, Islamabad, released a pamphlet including the
landmark of the Eighth five year plan in June 1994.
(1992-93 price)(Billion Rupees)

Plan Public sector Private Sector Total

7th plan 553 595 1.149

8th plan 752 949 1.701
Acceleration
(% )(Real term) 36 59 95

(Billion Rupees)

Plan Budget Corporate and

Market financed Total
7th plan 457 96 553
8th plan 483 269 752

4
4
Growth Target:
GDP 7.0%
Agriculture 4.9%
Manufacturing 9.9%
Services 6.7%

Macro economic Management:

1.Achieve the growth targets in framework of equity, stability and sustainability.
2.Reduce over all fiscal deficits to half- from 7.9 % to 4% of GDP.
3.Reduce current account deficit from US $3.7 billion to US $ 1.84 billion - 7 percent to
2.4 % of GDP.
4.Long term external dept to remain at 36% of GDP. Monetary expansion to remain
below the growth of normal GDP.
5.Reduce inflation rate from 9.3%to 6 percent.
6.Generate 6.2 million new jobs.

Good Governance:
1. Reduce imbalances of region, gender, groups and class.
2. Measure for poverty alleviation:
(Long term through social action programme & employment generation.)
(Short term through Zakat, BaitulMaal and social welfare system)
Greater self – reliance in financial resources.

3. Promote:
-Public- private partnership.
- Devolution & decentralization particularly in district level.

Toward Competitive Market:

1.Lower tax rates and broaden tax base, ensure documentation of the economy.
2.curtailment of special concession and rent seeking activities
3.lower tariff structure and integration with the world economy

Private investment:
1.improve enabling environment through:
- Physical infrastructure
 - Education & training
- Better health coverage
- Strengthening of capital market.
- Deregulation and privatization.
2.Supportive policies in the fiscal, monetary, foreign exchange and trade regimes.
3.Ensure a minimum investment of Rs 949b Billion against Rs.596 billion in the seventh five year plan.
45
Sectoral target:

Social sectors:
Education and training:
1.break through in primary participation rate
2boys from85% to 95%
3girls from54% to 82%
2.Increase in literacy rate from 35% to 48%.
3.output of technicians to increase by 50 %
4.Qualities improvement in education system.

Health:
1.Engage 33,000 village health workers- first major effort for health extension at village level.
2.Full immunization of child and mother.
3.Life expectancy up from 61.5 years to 63.5 years.
4.Reduction of incidence of low birth babies from 25% to 15%.
5.Universal access to iodized salt for edible purpose.

Population:
1.Population planning coverage programmme increase from 20% to 80%-urban 54% to 100 % and
rural 5% to 70%.
2.Population growth rate decline from 2.9% to 2.7%.

Physical infrastrucre:
Water:
1.Complete chashma right bank canal.
2.Complete Pet Feeder canal.
3.Complete left out fall drain.
4.Visible progress on right bank out fall drain.
 1.Water logging in disaster hits areas be eliminated.(1.40million hectares).

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Energy:
∗ Construction of ghazi broth-a hydral power project
∗ Thermal generation in private sector-estimated capacity 2,500 MW.
∗ competition of ongoing hub power project in the private sector (1,290MWs)
∗ Privatization of thermal plant of wapada.
∗ oil production up by 106 percent with major investment expected from the private sector.
∗ gas production up by 38 %
∗ Refining capacity up by 183 %( from 6 million to 17 million tons per annum_.
∗ .electrification of 19700 villages.

Transport and communication:

1. Double rail track from Lodran to Peshawar (800km).
2. Manufacture of 1367 high capacity wagons
3. Completion of Indus highway (1189km).
4. Complet Islamabad to Lahore moter way.
5improvement and up gradtition of RCD Highway.
6. Construction of deep sea port at Gwadar through private sector .
7. Number of post offices to rise from 13513 to 18513.

Production Sectors:
Agriculture:
1. Integrated management of agricultre, irrigation and drainage.
2. Better soil management and improved response to fertilizer use.
3. Introduction of sprinkler and trickle irrigation.
4. Break through oil seeds and pulse.
5. Integrated pest management.
6. Establishment of kisaan bank.
7. Wheat production up by 22%from 15.0 million to 18.25 million.
8. Cotton production up by 61 percent from 9.3 million bales to 15 million bales.
9. Rice production up by 31 percent from3.25 million tons to 4.25 million tons.
10. Sugar cane production up by 28 % from 36 million to 46 million tons.
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Production Target:
1. Fertilizer up by 60%.
2. Cement up by 66% from 8.56 million tons to 13 million tons.
3. Sugar production up by 54 % from 2.4 million tons to 3.7 million tons.
4. Petroleum production up by 50 % from 2.4 billion liters to 11.4 billion litretrucks and
buses production up by 100% from 4000 to 8000.
5. Steel billets up by 124 percent.

"ROLE OF ANNUAL PLANNING IN

DEVELOPMENT"
The short period from the view point of the economic decision making by the state
authorities is taken to cover the period of one year. The broad economic objectives are set out
in the annual
Budget and the annual development plan. When an over all five year plan is in operation, the
annual plan becomes the instrument for achieving the target of the plan and it include those
projects which are within the frame work of five year plan. if how ever the economic
conditions have changed drastically, as compared to what was envisaged when the five year
plan was formulated. The annual plan will take in to account the new ci9rcumstances and to
this extent deviate from the original targets. The annual plans become the main source of
development in the country.

Annual planning of the economy has the following important objectives.

1. Raising revenue for running the state machinary.The govt must generate funds for
maintain the administrative machinery of the state as well as the police and armed forces.
These fund are generated by the direct and indirect taxes and revenue from the govt agencies.
2. Raising resources to finance development programme to be under taken by the govt or
public sector.
3. Achieving out put levels and growth targets of major sector especially in agriculture and
industry.
4. Maintain stable prices.
5. Keeping the foreign trade balance within manageable levels to so that the defect does not
gobeyond what is covered from foreign borrowing.It is important to note that these short
term objectives may be inconsistent with each other and conflict are likely to grow. In such a
situation govt is expected to take suitable step of over coming this problem.
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ECONOMY OF PAKISTAN:

With a per capita GDP of about PPP $2,400, the World Bank considers Pakistan a low-
income country. No more than 48.7% of adults are literate, and life expectancy is about 63
years. The population, currently about 165.8 million, is growing at 2.09% annually.

In 2000, the government made significant macroeconomic reforms: Privatizing Pakistan's

state-subsidized utilities, reforming the banking sector, instituting a world-class anti-money
laundering law, cracking down on piracy of intellectual property, and moving to quickly
resolving investor disputes. After September 11, 2001, and Pakistan's proclaimed
commitment to fighting terror, many international sanctions, particularly those imposed by
the United States, were lifted. Pakistan's economic prospects began to increase significantly
due to unprecedented inflows of foreign assistance at the end of 2001. This trend is expected
to continue through 2009. Foreign exchange reserves and exports grew to record levels after
a sharp decline. The International Monetary Fund recently lauded Pakistan for its
commitment in meeting lender requirements for a $1.3 billion IMF Poverty Reduction and
Growth Facility loan, which it completed in 2004, forgoing the final permitted trance. The
Government of Pakistan has been successful in issuing sovereign bonds, and has issued $600
million in Islamic bonds, putting Pakistan back on the investment map. Pakistan's search for
additional foreign direct investment has been hampered by concerns about the security
situation, domestic and regional political uncertainties, and questions about judicial
transparency.
U.S. assistance has played a key role in moving Pakistan's economy from the brink of
collapse to setting record high levels of foreign reserves and exports, dramatically lowering
levels of solid debt. Also, despite the earthquake in 2005, GDP growth has remained strong at
6.6% in fiscal year 2005/2006. In 2002, the United States led Paris Club efforts to reschedule
Pakistan's debt on generous terms, and in April 2003 the United States reduced Pakistan's
bilateral official debt by $1 billion. In 2004, approximately $500 million more in

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bilateral debt was granted. Consumer price inflation eased slightly to an average of 8% in
2005/06 from 9.3% in 2004/05.

Low levels of spending in the social services and high population growth have contributed to
persistent poverty and unequal income distribution. The trends of resources being devoted to
socioeconomic development and infrastructure projects have been improving since 2002,
although expenditures remain below global averages. Pakistan's extreme poverty and
underdevelopment are key concerns, especially in rural areas. The government has reined in
the fiscal mismanagement that produced massive foreign debt, and officials have committed
to using international assistance--including a major part of the $3 billion five-year U.S.
assistance package--to address Pakistan's long-term needs in the health and education sectors.

Population Currency
162,420,000 Pakistani rupee
Capital Life Expectancy
Islamabad; 698,000 60
Area GDP per Capita
796,095 square kilometers U.S. $2,000
(307,374 square miles) Literacy Percent
Language 46
Punjabi, Sindhi, Siraiki, Pashto, Urdu,
Shinaki,Khowar,Hindko
Religion
Sunni and Shiite Muslim, Christian, Hindu,
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REFRENCES FROM:
1. Planning and development in Pakistan (1947 -1982).By Mohd Qureshi
2. Planning commission for sixth five year plan. By planning commission of Pakistan
3. The strategy of economic planning. By Mehboob ul Haq
4. The economy of Pakistan By Ali Anza
5. Economic Planning ... By Walter P. Falcon.
6. Economic analysis of Pakistan By Dr Akbar zaidi
7. Economy of Pakistan elitist state By Dr Ishrat Hussain