INDUSTRIALIZATION DEVELOPMENT PAKISTAN

Assignment Given to Bs students

Industrialization

Assignment Given to Bs students
“Industrialization is a process of building up a country’s capacity to process raw
material and to manufacture goods for consumption or further production”
Industrialization is the basic solution for economic development of a
developing country. The history shows that all the developed countries of the
world got development by industrialization. Pakistan requires industrialization to
achieved higher standard of living

Industry and industrialization
When more than one, firms are producing the same commodity we call it
industry.

IMPORTNCE OF INDUSTRIALIZATION

 

12 points

  1. Improvement in Balance of Payment
    Industrialization can change the pattern of foreign trade of the country. By the
    process, of industrialization, the export of manufactured goods can be increased. On the
    other hand, import substitution industries can save foreign exchange. The export
    orientation and import substitution effects of industrialization can improve the balance of
    payments.
    2 Increase Employment Opportunities.
    Industrialization enhances the employment opportunities. People can get Jobs in
    small and large scale industries. In developing countries, industry provides employment
    to underemployed and unemployed workers of agricultural sector.
  2. Increase in National Income
    A country can make the optimum, utilization of the scarce resources through
    industrialization. It increases the quantity and quality of a variety of manufactured goods.
    So national income increases due to progress of this sector.
  3. Easy to Control Industrial Activity
    The role of nature is more in agriculture than industry. In industry, the role of
    human beings is more and industrial activity is easy to control. The industrial production
  4. Rise in Agricultural Production
    Industrialization provides mechanical equipment like tractors, thrashers,
    Harvesters, bulldozers, transport etc. These mechanical equipment increase the
    per-hectare yield. As a result, income of the farmers increases.
  5. Higher Standard of Living.
    Due to industrialization, the value of output per worker increases. They
    award Laborers high rewards and incomes. The rise in income raises the
    Standard of living of the people.
  6. Economic Stability
    Industrialization creates economic stability in the country. A country by
    Export promotion industries and import substitution industries can increase its
    Foreign trade and earn foreign exchange. This will increase in the productivity of
    other sectors.
  7. Progress of Other Sectors
    Other sectors of the economy can flourish due to industrialization.
    Industry has backward link with agriculture and forward link with trade and other
    sectors. development of one industry is the development of other sectors.
  8. Promotes Specialization
    Industrialization promotes division of work and specialization of labor.
    The specialization of labor increases the productivity of labor. So, the income
    And standard of living of industrial worker is more than agrarian worker.
  9. Large Scope for Technological Progress
    Technological progress has a larger scope in industrialization. Modern
    technology increases production and reduces cost of production. Quality and
    quantity of production improves.
  10. Large Scope for Technological Progress
    Technological progress has a larger scope in industrialization. Modern
    technology increases production and reduces cost of production. Quality and
    quantity of production improves.
  11. Reduction in Population Pressure
    Due to industrialization, surplus labour migrates from agriculture to
    industries mostly situated in urban areas. In these areas, people adopt family
    Planning measures which reduce the population growth rate.
  12. Increased Saving and Investment
    Industrialization increases the income of people. So, their power to save
    Enhances and process of capital formation starts which can be helpful in breaking
    the vicious circle of poverty

  13. Industrial Problems in Pakistan
  14. Weak Infrastructure
    Roads, water supply, power supply, telephone services which provide the
    basis to establish industries are called infrastructure. If infrastructure is available
    in abundant quantity, it stimulates industrial growth.
  15. Shortage of Capital
    This is the most serious problem in industrial growth. Pakistan has a low
    National and per capita income. So our national savings are small. Against this;
    Modern industry which is mostly large scale, require huge amounts of capital. to
    make up the deficiency in domestic resources for development, Pakistan has
    Borrowed heavily from other countries. Still capital is not available in sufficient
    Quantity and rate of investment in industry is unsatisfactory.
  16. Shortage of Raw Materials.
    Many industries depend on important raw materials, e.g. silk yarn and
    Plastics. Because of shortage of foreign exchange, most of them are frequently in
    trouble.
  17. Smuggling
    Due to broader situations, smuggling spreads. Many foreign goods are
    available at cheaper rates than locally manufactured ones. This, situation has
    Forced some local industries to close down.
  18. People’s Craze for Foreign Goods
    People’s craze for foreign goods creates problem. It keeps the demand for
    Local industrial products limited.
  19. Inadequate Facilities for Transport and Communication
    Inadequate facilities for transport and communication also act as a
    Constraint in industrial expansion. To move raw materials to the factories and
    the finished goods to market needs transport
  20. Labor Unrest
    Labor is an integral part of every industrial unit. In Pakistan due to political
    and social reasons, there have been labor unrest, industrial disputes and strikes.
    Under these circumstances, the capitalists are discouraged to invest their money.
  21. Inadequate Industrial Finance
    Credit facilities for industrial projects are limited. In many cases, in spite
    of Technical know-how and favorable marketing conditions. People cannot setup
    Industry due to inadequate funds. If somehow capital is available, it is provided
    at High these interest industries rate are which not able leads to compete towards
    with high the cost production of production of foreign in industries.
  22. Inferior Quality
    Quality In goods most cannot cases successfully, the quantity compete of
    our with industrial foreign products goods. is inferior. Our poor quality goods can
    not successfully compete with foreign goods.
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    Solution of Industrial Problems
  23. Quality Control
    Quality is very important for the boost up of industry strict quality control should
    be observed.
  24. Supply of raw materials
    To ensure regular supply of raw materials, industrial and agricultural sectors
    should be developed through integrated planning.
  25. Establishment of Basic Industries
    The government should patronize the establishment of steel-based and
    electronic industry.
  26. Tax Concessions
    Tax concession for selected industries can also help to increase
    investment.
  27. Increase in Saving and Capital Stock
    Capital is a life blood of industry. All efforts have to be made for accumulation of
    capital. Capital must be created either through savings or borrowing
  28. Trained Manpower.
    More and more people should be given technical and vocational training
  29. Protection
    To those new industries for which raw-material is available locally,
    the
    Government should provide protection.
  30. Industrial Research
    More funds should be allocated for R&D (Research and Development).
    Constant efforts should be made to improve design, materials and methods used
    in industrial production.
  31. Direct Foreign Investment
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    Efforts should be made to attract direct foreign investments.
    10 . Increase in industrial Credit
    More institutions should be established for industrial loans. Small
    industries
    should be given preference.
    A brief history of Promotion of Industry
    a) Pakistan Industrial Development Corporation
    Pakistan Industrial Development Corporation (PIDC) was established in
  32. The objectives of PIDC were planning. Promoting. Organizing and
    Implementing programmers for the establishment of large scale industries in
    Pakistan. It started its operation in 1952. PIDC set up industries in those fields
    Where private sector was not interested due to low profits and in the fields
    where
    Huge capital was required. PIDC established 60 industrial and mining projects
    During 1952-1972.
    b) Pakistan Industrial Credit and Investment Corporation
    Pakistan Industrial Credit and Investment Corporation (PICIC) was
    created
    in 1957 in order to meet the working and fixed capital requirements for industries
    set up in the private sector. It provided loans to newly established industries in
    local
    and foreign currencies. The duration of loan was between 7 to 15 years The loan
    was paid in installments.
    c) Industrial Development Bank of Pakistan
    Industrial Development Bank of Pakistan (IDBP) was established in
    I961.
    The objective of IDBP was to give credit for the projects which use domestic raw
    material and were export oriented. IDBP provided credit facility for the
    development of engineering. Chemicals, paper, rubber and transport industry.
    d) National Investment Trust.
    National Investment Trust (NIT) was established in 1962. Its head office
    isin Karachi. The main objective of NIT was to mobilize savings of the people and
    Provide loans to industrial sector.
    Investment Corporation of Pakistan
    e) Investment Corporation of Pakistan (CP)
    Investment Corporation of Pakistan (CP) was established in 1966. State
    life insurance and federal government subscribed capital to run ICP. The
    objectives
    Of 1CP were to develop a capital market in the country and increase the equity
    investment.
    f ) Equity Participation Fund
    Equity Participation Fund (EPF) was established in 1970. 1Its, head office is
    in Karachi. The main objective of EPF was to provide loans for the growth of small
    and medium industries.
    g) National Development Finance Corporation
    National Development Finance Corporation (NDFC) was establjshed in
    1973, the main objective of NDFC was to provide capital for the public sector
    Under some conditions, it also provided capital for the private sector. NDFC gave
    Loans for project assistance, industrial expansion and modernization of industrial
    Units.
    h) Bankers Equity Limited
    Bankers Equity Limited (BEL) was established in 1980. It is public limited
    Company. The main objective of BEL was to provide loans for the growth of
    industries.

 

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INDUSTRIALIZATION

Industrialization

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