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
- 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. - 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. - 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 - 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. - 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. - 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. - 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. - 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. - 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. - 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. - 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. - 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
Industrial Problems in Pakistan- 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. - 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. - 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. - 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. - People’s Craze for Foreign Goods
People’s craze for foreign goods creates problem. It keeps the demand for
Local industrial products limited. - 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 - 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. - 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. - 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 - Quality Control
Quality is very important for the boost up of industry strict quality control should
be observed. - Supply of raw materials
To ensure regular supply of raw materials, industrial and agricultural sectors
should be developed through integrated planning. - Establishment of Basic Industries
The government should patronize the establishment of steel-based and
electronic industry. - Tax Concessions
Tax concession for selected industries can also help to increase
investment. - 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 - Trained Manpower.
More and more people should be given technical and vocational training - Protection
To those new industries for which raw-material is available locally,
the
Government should provide protection. - 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. - 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 - 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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