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    PAKISTAN ECONOMIC SURVEY 1969-70 I bs Q i 4.02 j Prepared by ECONOMIC ADVISER’S WING, MINISTRY OF FINANCE. GOVERNMENT OF PAKISTAN, ISLAMABAD, CONTENTS PaGE Foreword v Preface : : vii Gossary a ix Lst of Graphs. xi Lst of Tables in the Text : : xii Semmary of Main Findings . . 7 xix Cxaprer 1. National Income 1 TL. Agriculture 6 TH. Industry and Mining 26 TV. Money and Banking 37 V. Stock Market and Bonus Vouchers 86 VI. Prices and Cost of Living ” VIL. Commercial Policies 7 qi 3 VINE, Trade and Balance of Payments 126 1X. Public Finance . 144 X. Planning ae : 169 XI. Foreign Economic Assistance 185 XIE, Rural Works Programme 204 XI, Water and Power ‘i 213 XIV. Transport and Communications 228 XV. Social Development 250 ADPENDICES: A. Some Basic Concepts of National Income i B. Trade and Barter agreements concluded between April 1969 and March’ 1970 ee ix STATISTICAL SECTION a a 2 1-130 INDEX : : a Ee 7 133-145 FOREWORD The Economic Survey, 1969-10, gives a panoramic view of Pakistan’s economy durag the year. As the Third Plan period ends in June 1970, the Survey also descibes the difficulties and achievements in the various sectors of the economy during the course of the last five years. The objectives and strategy of the Fourth FiveYear Plan are also mentioned. During the year, the GNP is likely to increase by 5.8 per cont compared to 5.7 pr cen! in 1968-69, The GNP was expected toincrease by 37 per cent, for the Nan period as a whole, The likely achievement is 32 per cent compared to 30 pir cont achieved in the Second Five-Year Plan, The growth rate in the agriculture sector was 6.1 per cent compared to 3 per cent durig 1968-69, ‘The Plan envisaged an annual growth rate of 5 per cent in this secicr, against the likely achievement of 4.5 per cent. Despite the shortfall inthe growth target for agriculture, itis of significance that the year 1969-70 will witness the production of rice and wheat at the record love! of 10.97 lakh tons and 70 lakh tons against the Plan forecast of 144.45 and 54,64 fakhtons respectively, nn large-scale industries, the year recorded an increase of 7.5 por cent compared to 1C3 per con: in 1968-69, The Plan called for an annual growsh of 13 per cant, The ictual growthis likely to be 8.6 per cent per annum. Foreign exchange earnings from merchandise exports and invisibles, is esti- matel_at Rs. 429.27 crore for the year, compared to Rs. 420,28 crore for 196869, The total Third Plan earnings at Rs. 1,909.81 crore show an annual rate of 6 95 per cont against a target of 9.5 per cent. The Survey highlights the valiant effort made by the Nation over the Third Plan period to accelerate the pace of its economic development. Performance over he Plan period in some sectors has no doubt been somewhat short of the argos, but considering the difficulties which beset the Plan right fromits inception— susprnsion and dimunition in aid flows, the Indian attack, unprecedented floods and yolones in East Pakistan and two years of successive drought—it isan achieve ‘ment of no small measure that the Plan will record a higher overall growth rate than was possible under the considerably more favourable circumstances of the preewding plans, GHULAM ISHAQ KHAN, IS-AMABAD, H.QA,, 8. Pk. CSP., Jue 20, 1970. Secretary, Finance, @) PREFACE The Economic Survey, 1969-70, gives a glimpse of the livingreality for ns, i..Pakistan, through the Keyhole of economies. Of course, there are other keyholes—of history and politics, psychology and sociology, arts and literature, morals and manners: ‘more of less important according to the observer's choice, Total vision of the realits Which is basically a cultivated intuition, is gifted to rare individuals, who have a profound and vivid perception ‘ of human potential and human destiny, Such are the great leaders, They call forth persistent effort and sacrifice from their people Mall areas of creative endeavour. Iqbal had, probably, thisin mind when he wrote — Although economics, in recent times, has builtan imposing theoretical structure wo less dazzling to the lay siudent than the Christian theology of the medieval times, ts powers of predicting future are, to say the least, uncertain, In fact, some wise nendo not rate these powers as very much superior to those of the science of palmistry. “Therefore, extreme caution has been exercised in the Survey to resist the strong temp. ation to forecast the future course of events. ‘Ueel happy to note that the Economic Survey has a prominent place in the econo- nic Titerature of the country. It is rightfully earned, due to relatively dependable data ad the analytical approach adopted in its presentation. Every effort has been nade tomaintain and improve the quality. As the Survey has the sanctity of a national ast, suggestions for further improvement would be gratefully welcomed. I wish to thank the staff members of the Economic Adviser's Wing, who worked lard to produce the Survey on time, in spite of severe limitations and problems, The views expressed in the Survey do not neces: of the Government of Pakistan or the individual Mi ily represcnt the official views istries, ISLAMABAD, MAHBOOB HASAN, CS.P., June 18, 1970. Economie Adviser, (vii) GLOSSARY ‘OneLakh (1,00,000)= One Hundred Thousand (100,000). ‘TenLakh (10,00,000) = One Million (1,000,000). ‘OneCrore (J ,00,00,000) «= Ten Million (10,000,000). Units of Measurement OneMaund = 82.286 Ibs. OneSeer=2.057 Ibs, OneTon=2,240 lbs. One Acre=4,840 Sq. Yds OneAcre=0.4047 Hectare, OneBale (Sute) = 400 Ibs. ‘One Bale (Cotton) = 392 Ibs. Currency Equivalents =0.21 Dollar (U.S.) ,0875 Pound Sterling, or 21 Pence. One Rupee (100 Paisa). Year Caledar Year—January 1 to December 31. Fisci! Year } Ist July to 30th June (Example : 1966-67 means the Trace Year period covering July 1966 to June 1967). Agriulture Year Before 1959-60, the fiscal year was from April I to March 31. . Other terms Amar=R ce crop sown in summer in East Pakistan, ‘Aus Rice orop sow in spring in East Pakistan, Bore Rice crop sown in winter in East Pakistan, Basnati=A superior variety of rice in West Pakistan, Khaiif=Csops sown in late spring or in the beginning of summer and harvested inautumn in West Pakistan. Rabie Crops sown in autumn and harvested in the following spring in West Pakistan. Marti = Local market in West Pakistan. Gx), aA woos © LIST OF GRAPHS Gross National Prodtct Sectoral Indices of Gross National Product Percentage Contribution of Various Sectors of GNP Index of Agricultural Production Production of Rice and Wheat Production of Jute and Cotton tudes of Industrial Production Industrial Production Mouctary Assets Bauk Credit (Public and Private Sectors) = Bank Deposits (All Scheduled Banks) Bauk Credit (AM Scheduled Banks) Consolidated Position of Scheduled Banks ‘nter-Bank Call Money Rates at Karachi General Index of Share Prices . tndices of Share Prices by Groups Quotations of Bonus Vouchers General Consumer Price Index for Industrial Workers Foreign Trade Central Revenue Budget Central Capital Budget Dentral Capital Budget 1969-70 Budget » East Pakistan Animal Development Programme, 1968-70, East Pakistan Budget—West Pakistan Aimal Development Programme, 1969-70, West Pakistan &id LIST OF TABLES IN THE TEXT NATIONAL INCOME TABLE ok wp 15, 16. 17, 18. 19, 21. Annual Average Growth Rate of GNP. ~ a Swctoral Contribution Towards Growth Rate of GNP .. Sectoral Growth Rate over Plan periods. : a Sectoral Indices . 7 Composition of GNP o = ie i Per Capita Income at Factor Cost AGRICULTURE Acreage, Production and per acre Yield of Rice Acreage, Production and per acre Yield of Wheat s Area and Production of Other Food Crops 7 a Acreage, Production and Per Acre Yield of Jute ‘Acreage, Production and Per Acre Yield of Cotton. Acreage, Production and Per Acte Yield of Tea Area under Other Major non-food Crops Foduction of Sugarcane, Oilseeds and Tobacco ss Inpustry AND MiNinG ‘Trend of Principal Manufacturing Industries during Third Plan. Fovision made in the ‘Priority List of Industries’ for the period July 1968 to June 1970 (Large /Medium and Small Industries) Investment Approved during Third Plan (July 1965 to March 1970) Liilization of Foreign Loans and Creditsin Industrial Projects Foreign Private Investment/Loans sanctioned in the Industries . . Sector a ee 7 IPIDCAllocation and UtifizationDuring Third Plan Frojects completed by EPIDC (xiii) Pace we we NN 35 36 PAKISTAN ECONOMIC SURVEY 1969-70 TAME 2. Indusiry-wise Break up of WPIDC Prejects ae ; 23. Region-wise break up of WPIDC investment 24, Production of Some WPIDC Projects a oe i 25. Production of Principal Minerals . fe MONEY AND BANKING 26. Monetary Assets + Ee a : 27, Causative Factors of changes in Monetary Asses : 28, Seasonal Movement of Monetary Asseis ++ fr ee 29, Bank Credit (1965-70) «- a a fe a 40. Seasonal Movement of Bank Credit. a ae 31, Distribution of Advances by Economic Groups 3 32, Loan and overdrafts sanctioned by S.BP. to co-operatives and ADBP 33, Inter-Bank Call Money Rate . ” ee 34, Growth of Bank Deposits ‘ oe 35. Credit Deposit Ratio : a a 36. Bank Deposits and Advances By Provinces 437, Scheduled Bank's Borrowings from snl Balances with the State Bonk of Pakistan and their Investment - cf = 7 38, Loans Sanctioned by IDBP : : te a 39. Loans Due and Replacements i 7 S 40, Loans disbursed by ADBP # 7 : 7 41. Loans Against hypothecation of various crops 42, Term-wise composition of ADBP Loans 7 _ 43, Recovery position of ADBP Loans 7 ae = 44, Loans sanctioned by HBFC : 7 ~ 2 STOCK MARKET AND BONUS VOUCHERS 45, General Index of Share Prices and Aggregate values of shares =~ 46, Stare Bank Indices of Share Prices by Groups a i 47, Quotations of Bonus Vouchers at Karachi (Ready) Gis) B 0 81 81 82 83 85 oO 92 95 CEEeee-teceeg CCC LIST OF TABLES IN THE TEXT Table 48, 49. 50, 51 52. 33. PRICES AND COST OF LIVING Index of Wholesale Prices by groups General Index of Wholesale Prices by Provinces Average Wholesale Prices of Selected Food items ‘Average retail prices of Pulses. Meat, Fish, Eggs and Vegetables Internal Auction prices of Tea at Chittagong Average Wholesale prices of Tea at Karachi and Dacca . Pices of Cotton Textiles : Average retail prices of Drug and Medicines in Karacl General Consumer Price Indices .. . Commenciat. Poricis Bonus Exports 1959 to 1969. 7 Inports under Export Bonus Scheme e is se Inporis/Exports Handled by the Trading Corporation of Pakistan. TRADE AND BALANCE OF PAYMENTS Exports, Imports and Balance of Trade ue Revised Targets of Exports for 1969-70 and Actual Exports Exports by Commodity Groups : : ‘Major Exports of Pakistan Inports by Categories = Major Imports, : : - Exports by Regions and Countries Inporis by Regions and Countries ‘Terms of Trade Inter-zonal Trade. ee : 7 Composition of Exports from East to West Pakistan Composition of Exports from West to East Pakistan. Ealance of Payments Nerchandise Account (wy) PAGE 100 104 106 107 108 109 aw 112 18 18, 120 127 129 130 131 132 133 134 136 137 138 138 139 "140 141 PAKISTAN ECONOMIC SURVEY 1969-70 ‘TABLE PAGE 74. Official Donations ~ . - 7 az 75, Total Utilization of Loans and Credits and Repayments thereof. 143 Popuic FINANCE 76. Central Revenue Budget at a Glance 7 os eaISL: ‘71, Provincial Share in Central Takes 7 7 eo 93: 78, Capital Budget 7 o : i 154 79. Annual Development Programme : oe Peeeday: 80, East Pakistan Budget at a Glance .. ii : 158 81, Development Programme oy i : . 160 82, West Pakistan Budget at @ glance «- a : 162 83, New Rates of Duty for Inspection and Grant of Licences for Cinemas 162 84, Annual Development Programme ~. ‘| a : 165 PLANNING 85, Developiment Programme 1969-70 by Executing Authorities ye 16 86, Regional Allocation in the Fourth Plan : . 1B FOREIGN ECONOMIC ASSISTANCE 87, Foreign Economic Assistance to Pakistan (1950-1969) 18S 88, Foreign Economie Assistance received up to December, 1969 7 186 “go. Aid Pledges during Third Plan. ; eee ees 90. Commitments and Disbursement of Aid during Third Plan Period .. 188, 91, Viiliztion of Foreign Assistance during Third Plan. eet) 92. Plan Projections and Estimated Actuals of Aid Disbursements i 191 93. Obligations under Public Law 480 . oe . 192 94. Assistance under PL-480 during ‘Third Plan (Up to May 15,1970). 193 ¢5. Techies! Assistance received under Colombo Plin upto 1966.67 .. 194 69- Technical Assistance received under Colombo Plan up to 1968 Pre 195 7 ‘New Training Places provided to Pakistan under Colombo Plan... 195 6. ‘United Nations Development Programme on Current 98. Projects 7 : (vi) EERE EEE eee -e-ee- eee eee ecco LIST OF TABLES IN THE TEXT Tae 99 Project Requests for Approval. e 108, 10 10:, 10; 104, 108, 106, 10%, uN7 118. 119, Assisiance provided by the UNDP (Special Fund). ‘Outstanding Exiernal Indebtedness. . (As on December 31, 1969) Debt Service Ratio for Pakistan's External Debt Contracted up to December 31,1969. Rurat Works PROGRAMME Allocation and Utilization of Funds during Third Plan Period Physical Achievements under Rural Works Programme in West Pakistan He Physical Achievements under Rural Works Programme in East Pakistan Purpose-wise Allocution of Funds for 1969-70 Release of Funds for Azad Kashmir TRANSPORT AND COMMUNICATIONS Third Plan Progress of PER ‘ i 7 Third Plan Progress of PWR Third Plan Progress of WT Performance of IWT (1965-69) Traffic Handled at Karachi Port Traffic Handled at Chittagong Port ‘Traffic Handled at Chalna Port Expansion of PIA’s Operational Activities Postal Revenue and Postal Traffic SoctaL Drvetorment Public Sector Allocation : . Proposed Expengiture under new Education Policy Allocation and Estimated Expenditure in health sub-sector (avi) Pace 198 198 199 199) 205 207 209 209 210 29 231 237 238, 241 248 242 245 245 250 259 260 PAKISTAN ECONOMIC SURVEY 1969-70 Taste 120, Financial Targets and achievements, Health sub-sector 321. Physical Targets and Achievements a 422, . Physical Progress of Family Planning 123, Distribution of Alloettion and Expenditure in Manpowes and Labour a a fe 124. Work performed by Employment Fachanges in Pakistan 125, Allocation and Estimated Expenditure. in Physical Planning and Peogiie sub-sector in Third Plan by Executing Agency i Pace 260 263 265 266 269 24 SUMMARY OF MAIN FINDINGS NATIONAL INCOME The overall economic situation in the country recorded modest improvement during 1969-70. Provisional estimates place the figure of gioss national product (at 1959-60 factor cost) at Rs. 5,428 crore for tie year compared to Rs. 5,129 crore in 1968-69, indicating an increase of 5.8 per cent compared to 5.7 per cent in 1968-69. Dut of 5.8 per cent growth rate of GNP in 1969-70, agriculture contibuted 2.7 percent. While each of the sectors, namely, manu- facttring, wholesale and retail trade and public administration con- tributed only 0.7 per cent. The per capita income has been estimated at Rs. 423 in 1969-70 compared to Rs. 410 in 1968-69, indicating a growth rate of 3,2 per cent as against 2.8 per cent in 1968-69, AGRICULTURE The Third Plan accorded a high priority to agriculture with the prinury objective of attaining self-sufficiency in food production by 970 “Several programmes were chalkd out and as a result agri- cultre has made rapid progress during the Third Plan. The growth rate n agriculture during the Plan period has been estimated at 4.5 per cnt against the target of 5 per cent and compared to 3.4 per cent achieved during the Second Plan period. East Pakistan attained a growth rate of 3.2 per cent compared with West Pakistan’s 5.9 per cent. The growth rate was achieved despite poor foodgrains prodiction in the first two years of the Third Plan, because of drought in Wist Pakistan and floods in East Pakistan. Agricultural produc- tion, however, showed improvement in 1968-69 when the production of bth rice and wheat reached a record level. of 131.65 lakh tons and 66.05 lakh tons, respectively. It islikely to increase to 140.97 lakh ‘ons and above 70 lakh tons, respectively , in 1969-70, ‘The index of agricultural production (Base : 1959-60= 100) in 1969-70 has been provisionally estimated at 156 compared with 146 in 1958-69. The estimated rise is due to substantial increase in the prodiction of wheat, rice, jute and cotton. The large increases inthe production of major crops during the Thiré Plan were the result of favourable weather conditions and (xix) (xx) PAKISTAN ECONOMIC SURVEY 1969-70 improved seeds such as Mexi-Pak (Wheat) and Trri-Pak (Rice) along Wincoxtensive use of fertilizers, greater availability of irrigation water and plant protection services, ‘The price of coarse rice in East Pakistan increased, the provincial average being Rs. 37.33 per_maund during July 1969 to November 1969, compared with Rs, 36.93 per maund during the corresponding petiod last year. However, steps were taken by the Government to Inport foodgrains worth Rs. 16 crore for East Pakistan. The food situation in West Pakistan remained satisfactory during 1969-70 (July-March) and the supply position was fairly sutisactory because of substantial increase in domestic production Offoodgrains. The price of indigenous wheat showed a downward frend in the open market during July 1969 to March 1970, renging between Rs, 14 to Rs. 25 per maund as against Rs. 14 to Rs. 26.50 pet maund during the corresponding period in the preceding year. Production Production of rice in East Pakistan increased from 109.95 lakh tons in 1967-68 to 111.65 Jakh tons mn 1968-69 and is estimated at 117.25 lakh tons in 1969-70. Wheat production in West Pakistan also increased from 63.16 lakh tons in 1967-68 to 65.13 lakh tons in 1968-69, and is expected to be above 70 Jakh tons in 1969-70. The production of jute and cotton is also expected to rise to 70.28 lakh ‘bales and 30.28 lakh bales respectively in 1969-70 from 57.54 lakh bales and 29.74 lakh bales respectively in 1968-69. The consumption of fertilizers is rapidly increasing. It rose from 2.85 lakh nutrient tons in 1967-68 to 3.35 lakh nutrient tons in 1968-69, and is expected to go up to 4.72 lakh nutrient tons by June 1970. The quantity of improved seeds used for major Crops is expected to mcrease from 49,485 tons through the agencies in 1968-69 to 61,000 tons in 1969-70. Inrcease in fish production has been poor. In East Pakistan the production increased from 2.50 lekh metric tons in 1964 to 5 7 2akh metric tons in 1969, and in West Pakistan from 1.10 lakh metric tons to 1.79 lakh metric tons during the same period. INDUSTRY AND MINING The performance of the industrial sector which was impressive during the Second Plan, slowed down during the Third Plan due to {ower than expected investment in new industries and decreased availability of imported inputs. As a result, the average annual lalallala SUMMARY OF MAIN FINDINGS. (xxi) tovth rate in the large scale manufacturing sub-sector declined Fon IS per cent in the Second Plan to 8.6 per cent during the Thi:d Plan against the Plan target of 13 per cent. During 1969-70, the performance of this sub-sector was even poorer and showed a grovth rate of only 7.5 per cent compared to 10.8 per cent in 1968-69. To cope with the reduced availability of financial resources the strategy of the Third Plan was revised in 1966 which aimed at fuller utilsation of industrial capacity, coupled with a selective expansion of industries catering for the export market and the agricultural secbr. Also, a part of the responsibility assigned earlier to the pultic sector was shifted to the private sector. The revised strategy did not, however, yield the expected results. The restricted supply of raw materials kept the industries working below their capacity. The investment climate was also affected by the fisturbed conditions prevailing in the latter half of 1968-69, and the current style of pre-election activity, As a result, against the Third Plan allocation of Rs. 351.3 crore to tie public sector, investment is estimated at Rs. 267.7 crore or 76 per cent of the target. In the private sector also investment approved up to March 1970, under the Comprehensive Industrial Investment Schedule, is estimated at Rs. 632.6 crore or 68.3 per cent of the tevied allocation of Rs, 925.7 crore. During 1968-69, production of white sugar, cigarettes, cotton yan, boerd, urea, cement and cycle rubber tyres and tubes recorded substantial increase. In the first half of 1969-70 also, production of jute goods, cotton yarn and cloth, cement, sulphuric acid, and fertiizers was showing upward trends. The quantum index of indistrial production (Manufacturing) (Base : 1959-60=100) rose fron 201.7 in 1964-65 to 282.9 in 1968-69 and to an estimated 303.8 in 1369-70. Up to March 1970, Government obtained loan pledges of $ 1,127.96 million for industrial projects. Of this § 1,035-76 million hadbeen committed and $779.49 million disbursed. ,_ During the Third Plan period (July 1965 to March. 1970), foreign privite investment amounted to Rs. 158.7 crore, and foreign loans assoviated with foreign private investment to Rs. 28.6 crore against Rs. 5 crore and Rs. 51.4 crore, respectively, during the Second Plan. Industrial credit, continued to be granted liberally by the com- merdal banks and specialized financial institutions. At the end of December 1969, the amount of industrial credit advanced by the (xxii) PAKISTAN ECONOMIC SURVEY 1969-70 commercial banks and outstanding amounted to Rs. 419.6 crore. Besides, during 1969, PICIC sanctioned loans amounting to Rs. 39.36 crore, bringing the total loans sanctioned up to March 1970 to Rs, 211.7 crore for 780 projects. Similarly IDBP, during 1968-69, canctioned Rs, 17.4 crore (Rs. 13.9 crore in foreign exchange) to 307 applicants, bringing the total loans sanctioned during the Third Plan (ily 1965-March 1970) to Rs. 102.80 crore (foreign exchange Rs. 81.3 crore) to 1,683 applicants. The Investment Corporaton of Pakistan was established in 1966 to encourage and broaden the base of investment. Its contribution to new capital formation increased to Rs. 42.10 crore by 1969-70. Tt also mobilized Rs. 10.74 crore under the Investment Scheme. With the setting up of an Equity Participation Fund m May 1970 the pace of development of smell and medivm-sized industries in the private sector is likely to be accelerated in East Pakistan end in the less developed areas of West Pakistan. With the improved terms and conditions lately ennounced under Pay-As-You-Earn Scheme, the pece of setting up industries based on indigenous raw materials is likely to be accelerated. Sanctions Gpproved during July 1965 to December 1969 under this scheme amounted to Rs. 36.53 crore. To encourege industrial development, the Government granted protection to 14 industries during the year ending Merch 1970. Protection is normally given by levying protective import duties, sometimes by allowing rebate of customs duty and sales tax on imported raw materials and sometimes by partial or complete ban ‘on amports of competing articles. In the‘public sector, the EPIDC completed five projects during 1969-70 (July-March) at a total cost of Rs. 8.68 crore. Of these, two were jute mills, two fertilizer factories and one suger mill. Total Womber of projects completed during the Third Plan (July 1965 to December 1969) was 27 at a total cost of Rs. 89 crore which created hdditional capacities in sugar, fertilizer, jute goods, steel gots ete. The net value of fixed assets of EPIDC’s 19 projects in commercial operation was Rs, 96.15 crore. Gross receipts from these projects during 1968-69, was Rs. 41.23 crore and the revemue expenditure Rs. 43.13 crore. The net_loss on these nineteen projects, during the year amounted to Rs, 5.51 crore. Similarly, the WPIDC completed four, projets during 1969-70 (July--March) at a cost of Rs. 13.9 crore. These included extension aaa SUMMARY OF MAIN FINDINGS (xxiii) of three projects Zeal-Pak Cement Factory, Pak-American Fertilizer Facbry and gas distribution lines and the modernisation and devel- opment of rock salt mines. By the end of March 1970, the Corpora- tion had completed 58 industrial and mining projects (including 33 itherited from the former PIDC) at a total cost of Rs. 115.26 ctor, including contribution of Rs, 23.37 crore from the private sectar. The 20 WPIDC projects (under direct management) yielded a retum of 6.7 per cent on its investment during]968-69, compared to 8.2 yer cent in preceding year and 1.4 per cent in 1962-63. The Small Industries Corporations continued to provide assis- tanct to small industries in both the wings of the country. Besides provding loans amounting to Rs. 93.2 lakh to 858 units and arrang- Bie «nother Rs, 72.lakhRs. 30.6 lakh in foreign currency) through IDB? the EPSIC has so far set up 18 industrial estates at a total cost of R:.3.14 crore. Total number of plots developed is 3,368 of which over 1,200 have been allotted. The Corporation has 22 on-going schenes in hand at an estimated cost of Rs. 4.8 crore. Tle WPSIC undertook establishment of nine industrial estates, offerng 2,276 fully developed sites at an estimated cost of Rs. 6 crore. While the estates at Gujrat and Sialkot have been completed, the remaining ones are in different stages of implementation. Besices offering research and consultancy services at Small Industries Instiute and running the Handicrafts Designing Centre, both at Lahae, the Corporation runs 11 services centres, 21 handicraft deve- lopment centres, 11 handicraft shops and 13 carpet centres. ‘n addition, a large number of technical and other specialised institutions are providing direct and indirect assistance to the in- dustiial sector, These include the Investment Advisory Centre of Pakiten, the Swedish-Pakistani Institute of Technology, Pakistan Industrial Technical Assistance Centre, Pakistan Council for Scientific and industrial Research, Pakistan Standards Institution and Central Testing Laboratories. The PCSIR has developed a number of uscful processes which havealready gone into production. The Council estimates current annual saving of foreign exchange equivalent of Rs. 93 lakh because of their activity. The country is spending considerable money on this Institution. So far, an expenditure of over Rs. 20 crore has been incurred and the present level of annual expenditure is about Rs. 1.80 crore As against this, the income from leasing out patents is estimated at orly Rs. 1.80 lakh during 1969-70. These figures underscore the wgent need for establishing cost-benefit norms for research and devebpment expenses in the country. (xxiv) PAKISTAN ECONOMIC: SURVEY 1969-70 Mining ‘The index of mineral production (base: 1959-60 = 100) rose from 174.5 in 1964-65 to 208.2 in 1968-69 and is estimated at 227.4 111969-70. During 1969-70 (Tuly—December) production of several ‘minerals including coal, limestone, magnesite, natural gas ctc. was showing a rising trend. MONEY AND BANKING ‘The rate of monetary expansion slowed down during the calendar year 1969 and the first quarter of 1970. Monetary assets during year, increased by Rs. 175.31 crore or 9.4 per cent {rom a total of Re 1874.74 crore at the end of 1968 to Rs. 2,050.05 crore at the Ry cr 1969. This compared with the increase of Rs. 203.65 crore cris ‘percent during 1968. During January—March 1970 ore onetary assets increased by Rs. 13.7 crore to Rs, 2,067.22 total Compared with the increase of Rs. 56.43 crore during the corresponding period of 1969. Bank credit recorded a smaller increase during, 1969. At Rs. 1,049.33 crore at the end of 1969, it showed an increase of RS 31°38 crore over the year compared with the incresse of, 147.17 Ree during 1968. During January-Merch 1970, bank credit decl- jned by Rs. 25.31 crore to Rs. 1,024.02 crore compared with the nen save of Rs, 33.83 crore during the same period of 1969. The neler increase in bank credit during 1969, and the first quarter of 4970 wes primarily due to a substantial reduction in borrowings by Government from the commercial banks. Bank credit to the private sector 2lso increased slowly, but it conceals the sharp increase Setnessed during the busy season (September 1969 to March 1970). The increase was higher than. that during the previous busy season indicating that the credit requirements of that sector were adequately sete There was, however, considerable retirement of bank credit iiethe slack season of 1969 (April —Avgust) which occurred mainly in the private sector. The distribution of scheduled banks’ advances among various economic sroups at the end of Decemberi969 shows that the largest share was claimed by “Manufacturing? and ‘Commerce’. The share we Manulacturing’ was 40.4 per cent compared with 38-5 per cent a yearearlier, Commerce’ 33.1 per cent as ‘against 39.1 Por cent last year and Services’ 8 per cent compared with 6.7 per cent a year earlier. ‘The credit policy of the State Bank of Pakistan was further Ijberaliged. Credit problems of small borrowers were given special Uipetdon and certain measures were taken in this respect. Com- SS CECE EERE SESE Ee lalallala SUMMARY OF MAIN FINDINGS (xxv) menial banks had hitherto been shy of providing credit to the farm Sector. Two new schemes were introduced by, the State Bank in this respect. Underthe Re-finance: scheme, facilities are now available to fle commercial banks for Joans advanced to the agriculture sector for specific purposes, While under the Guarantee scheme part of such advinces is guaranteed by the State Bank. The Karachi money market ruled easy during 1969 and the firsiquarter of 1970. ‘The easy condition was attributable to improve- merit in resource position of scheduled banks. The call money rate ruled lower and moved within a narrow range of 5—5.5 percent, compared with 5.25 to 7 per cent during 1968. In the field of banking, commercial banks opened larger number of sranches during 1969, but the pace of deposit mobilization sloved down considerably. The number of reporting scheduled barks at the end of 1969 was 34 compared with 35 a year ago; one bank namely, Mercantile Bank Ltd. ceased functioning during the year. During 1969, 283 new bank branches were opened conpared with 373 branches opened during the previous year bringing the total number of branches throughout the country to 3,000 at theend of the year. Of these, 1,072 were in East Pakistan and 1,928 in West Pakistan. During the year, 57 new branches were opened in Eag Pakistan and 226 in West Pakistan. There was a net addition of 38 new branches during January—March 1970. The rate of increase of deposits of the scheduled banks was lover during 1969. The deposits which increased at a high rate of 15.| per cent during 1968, rose by only 8.6 per cent during the period ‘uncer review. At the end of 1969, total deposits stood at Rs. 1,252.45 crore compared with Rs. 1,153.25 crore at the end of 1968, an increase of Rs. 99,20 crore. However, the faster increase in bank deposits in relation to bark credit enabled the scheduled banks to reduce their brorowings fron the State Bank. At the end of 1969, their total borrowings were reduced by Rs. 16.07 crore and stood at Rs. 188.05 crore com- pared with Rs. 204.12 crore a year ago. At the end of March 1970, theborrowings stood at Rs. 140.24 crore. ‘An analysis of bank deposits and bank advances by provinces revals that from 1967 onwards East Pakistani branches of commercial barks have been issuing loans more than the deposits received by then in that Wing. For instance, at the end of June 1969, total deposits of Bast Pakistan branches of the banks amounted to Rs 273.48 crore while advances made by them were Rs. 300.99 cre, (xxvi) PAKISTAN ECONOMIC SURVEY 1969-70 The scheduled banks’ balances with the State Bank increased during 1969. At Rs. 70.22 crore at the end of 1969, the balances showed an increase of Rs, 4.85 crore over 1968. At the end of March 1970, the balances stood at Rs. 70.02 crore. On account of their comfortable resource position, the scheduled banks during 1969 made larger investments in various types of securities. At the end of 1969, total investments stood at Rs. 366.37 crore compared with Rs, 302.15 crore at the end of 1968, showing an increase of Rs. 64.22 crore. At the end of March 1970, the investments stood at Rs. 346.74 crore. ‘The specialised credit institutions continued to assist some key sectors of the economy, such as industry, agriculture and housing. These institutions viz., the Pakistan Industrial Credit and Investment Corporation, the {Industrial Development Bank of Pakistan, the Agricultural Development Bank of Pakistan and the House Building Finance Corporation sanctioned loans amountingto Rs. 82.52 crore during the calendar year 1969. STOCK MARKET AND BONUS VOUCHERS Stock Market The general index of share prices which was 112.68 in March, 1968 rose to 128.82 in March 1969. It rose further to 150.05_in March 1970, showing an improvement of investment climate .This improvement is the result of ‘several steps taken to broaden the base of corporate ownership, prevent concentration of economicpower fh a few hands, discourage non-declaration of capital gains and dividends and to stop multiple applications for new floatations. Bonus Vouchers ‘The prices of bonus vouchers ruled higher in the range of Rs. 174,35 and Rs, 208.50 during the period April 1969—March 1970, compared to the range of Rs. 157 and Rs. 187 during the corres- ponding period of 1968-69. ‘The higher permiums of bonus vouchers are attributed to irregular supply of vouchers dependent 2s they are on unstable export per- formence, manipulation by speculators, changes made in bonus trading lists and bonus entitlements and import policy, because of tight foreign exchange position, SUMMARY Of MAIN FINDINGS (xxvii) PRICES AND COST OF LIVING Price situation remained under considerable strain during the period April 1969 to March 1970.. The monthly average wholesale pric index which stood at 134.30 during April 1968 to March 1969, incrased to 139.33 during April 1969 to March 1970, an increase of 27 per cent. The increase in the index of prices was continuous up to Sep- temer 1969, from 133.68 in April 1969 to 148.76 in September, an all-ime high. Subsequenily it fell to stand at 135. 29 in March 197). The average wholesale price index in East Pakistan during April 196%—March 1970 stood at 145.31 compared 10 137.74 during the corsponding period of 1968-69, showing a rise_of 5.5 per cent. ‘The price rise was more pronounced in East Pakistan as the index rose from 139.01 in April to 159.65 in September 1969. The index fell ‘o 136.85 in March 1970. ‘The increase in the index was mainly attrbuted to higher prices in food group. In West Pakistan, the rise in price index was moderate and may be «ttributed mainly to increase in the prices of food items. The morthly average general index of wholesale prices during April 1969 to March 1970 stood at 131.39 compared to 129.48 during the corres- poniing period of 1968-69, an increase of 1.5 per cent. The consumer price index for industrial workers at various centres of the country showed a rising trend. At Karachi, the average consumer price index during April 1969 to March 1976, in- creased by 3.5 per cent, at Lahore by 4.4 per cent and at Narayan- gan’ by 3.2 per cent over the corresponding period of 1968-69. The index for clerical workers increased by 3.2 per cent and 1.9 per cent et Karachi and Chittagong, respectively, during the sam: period. COMMERCIAL POLICIES The commercial policies of the country have been designed to incrase exports and ensure adequate supply of capital goods and imported industrial inputs and essential consumer goods. Import and >xport policies have been formulated to achieve these objectives. In the import policies of 1969-70, there were 14 items under Free List and 33 items under the Licensable List during the first half and 14 and 36 items, respectively, during the second half of the (xxviii) PAKISTAN ECONOMIC SURVEY 1969-70 year, Under the Cash-cum-bonus List, there were 111 items during the first half of the year, another 4 items were added during the second half, Bonus List is rather Targe and there were over 260 items by ‘January 1970. An important feature of the import policy was the introduction, during the second half of 1969-70, of Raw Material Replevishment Scheme to teplace Export Performance Licensing icheme. Government took several steps to promote exports. These included fixation of export targets. for major commodities. improvement in Export Credits Guarantee Scheme, participation in international trade feirs, exchange of trade delegations with important countries, signing of new trade agreements, and the renewal of existing ones, and standardisation of export commodities and goods. In the export policy for 1969-70, export target was revised to Rs, 340 crore. Major commodities, for which targets were fixed were raw jute, raw cotton, rice, jute goods and cotton manufactures. Some important steps were taken to achieve the targets. Exports under the Export Bonus Scheme in 1969 were valued at over Rs. 251 crore, against Rs, 196 crorein 1968. Bonus vouchers worth Rs. 85 crore were issued during 1969, of which Rs. 76 crore were actuzlly utilised. An encouraging trend in 1969 was the sub- stantial use of bonus vouchers for the import of industrial raw materials, machinery and spare parts. Their respective shares in total borus-based imports were about 43 per cent and 35 per cent against 38 per cent and 10 per cent in 1968, respectively. Thescheme was under review to improve its operations. Some changes were made in the Export Credit Guarantee Scheme to improve its performance. The operations of the Trading Corporation of Pakistan have expanded. Import of industrial raw materials has been its main fanction. ‘The Corporation has been exclusively authorised, since January 1970, to import various iron and steel items, copper, zinc and lead, aluminium, sulphur, artsilk yarn, raw rubber, sugar etc. In addition, the Corporation exported goods worth Rs. 15.71 crore in 1968-69, compared to Rs. 6.02 crore in 1967-68. Duringthe first half of 1969-70, goods worth Rs. 4.55 crore were exported. Pakistan participated in 2] international trade fairs during the first ten months of 1969-70, against 20 in 1968-69, and sent out 8 trade delegations as compared to 10 in 1968-69. During the period ending March 1970, 11 trade agreements were signed and another 20 renewed. In addition, increased import quotas of finished goods were being secured from developed countries. Saale SUMMARY OF MAIN FINDINGS. (xxix), Th the international forums, Pakistan participated in several intermtional trade conferences including UNCTAD, ECAFE and RCD to promote exports and to increase international economic coopeation. TRADE AND BALANCE OF PAYMENTS Exports Vsible exports during July—March 1969-70 were of Rs. 242 crore, against Rs. 248 crore citing the corresponding period of 1968-(9. Iv is estimated that exports in 1969-70 would be around Rs. 32 crore compared to Rs, 324 crore in 1968-69. . Total foreign exchange earnings including invisibles are likely to increase fram Rs, 42.28 crore in 1968-69 to Rs. 429.27 crore in 1969-70, In the visibleexports the share of manufactures has risen from 52 per cent in 198-69 to” 54 per cent in 1969-70. It was only 32 percent 1a 1964-65. This is a vevy happy sign indeed. Impors. Thports during 1969-70 are expected 'to be. around last- year's. level of Rs.490 crore. The import of capital goods will-be around. 50 percent of the total import and that of industrial raw material will bearound 37 per cent. " Consumer goods will be only 13 per cent of totd imports, Tnter-Zonal Trade The total value of trade from East Pakistan to West Pakistan was Rs. 76 crore of manufactures and-Rs. 10.84 crore of primary commodities during 1968-69, compared to Rs. 48.79 crore and Rs, 4.81 crore respectively, in 1964-65. The value of trade from West Pakistan was Rs. 71.53 crore of manufactures and Rs. 62.72 crore of primary commodities during the same period, compared to Rs.59.17_ croreand Rs. 26.51 crore worth of manufactures and primayy commodities respectively in 1964-65. The value of total trade from East to West Pakistan during July—ecember 1969 was Rs. 51.55 crore of which Rs, 43.45 crore (85 pe: cent) was manufactures and Rs. 7.63 crore (13 per cent) was orly primary commodities. Tie value of total trade from West Pakistan to East Pakistan duringJuly—December 1969 was Rs. 86.93 crore of which Rs, 35.69 crore (42 per cent) was manufactures and Rs, 50.62 crore (58 per cert) was primary commodities, (xxx) PAKISTAN ECONOMIC SURVEY 1969-70 PUBLIC FINANCE A number of measures were taken to. promote savings and investments and prevent concentration of economic power. These included promulgation of Monopolies and ‘Unfair Trade Practices (Control and Prevention) Ordinance, setting up of anEquity Participation Fund, extension of period ‘of re-finance of term-loans and rise in interest rates of post office savings bank account. Total receipts on revenue account during 1969-70, of the Central and. Provincial Governments, were estimated at Rs. 1,054 crore, Rs. 130 crore or 14 per cent more than the revised estima! Rs..924. crore for 1968-69.The revenue resources of the Cent “Provincial Governments have, during the Third Pian, shown tes of Vand impressive increase, Between 1964-65 50 1969-70, reverme receipts ar Central Government, after deducting te ‘provinces’ share of the Cintrak taxes, sncressed from Rs. 330.10 crore fo, Rs. 672.62 in re, of East Pakistan from Rs, 114.67 crore to Rs. 162.51 croreand + of West Through This enal Pakistan from Rs. 181.91 crore .to. Rs. pled them fo divert @ sizable amount te capital ee Tiss eni9go-70 Central Budgct alone, Rs. 184.52 crers of revel 218.48. crore. ~ key low. ‘arious measures, revenue expenditure We surplus was transferred. from the ‘revenue budget to- the capital budget for meeting development needs. - - “Fie 1969-70 Central budget envisaged additional resources of about Ro. 47 crore from new tax measures For financing the increasing Gevelopment expenditure. West Pakistan budget for 1969-70 also levied additional taxes of Rs. 10.80 crore. ‘No fresh taxes, however, were levied by the East Pakistan Government. The ‘Annual Development Programme, 1969-70. for the public sector, made 2 block provision ‘of Rs. 30 crore (net) for social sectors, and provided for an expenditure of Rs. 500.46 crore, Rs, 231 crore for East Pakistan, Rs. 190 crore for West Pal Rs, 79.46 crore for the Central Government. Dividi n fer the Central projects between the two Provinces, om the basis UP ther location or benefits, the rato of expenditure in East Awest Pakistan would be 53 = 47. Both the Provinces will also benef from additional ‘allocation out of the block prov ision made _for programmes in the social sector. The larger allocation for East ti stan and ng ova it programmyes in line with the Plan objective of eocelerating the pace bf economic development in the Province. The Third Five year Pian which i PLANNING part of 20-Yeer Perspective plan (1565-85), witha development expenditure of Ps. 5,200 crore EEE EE eae SUMMARY OF MAIN FINDINGS (xxxi) zimed at increasing the GNP by 37 per cent, at the rate of 6.5 per cent” per annum, egricultural growth rate at 5 percent, overall in- dustrid growth rate at 10 per cent, providing 55 lakh additional job eprortunities, strengthening balance of payments position and reduciig inter-regional and intre-regional disparity by a faster growth in East Pakistan Tie average annual growth rate over the Plan period in agri- culture sector has been estimated at 4.5 per cent compared with the target of 5 per cent. As against the target of 13 per cent, the growt rate in the large-scale menufecturing sector is likely to be 9 per ont. Exports heve risen et an av rate of around 7 per cent duringthe Plan period es, inst the target of 9.5 per cent. The county finenced about 76 per cent of the development expendi- ture from its own resources during 1965—7G compared to 65 per cent during 1960—65. During the Plan period, the rate of investment has been estimated between 14 and 15 per cent compared to 18.3 per cent in 1964-65. The tol public sector development expenditure during the Plan pericdis estimated at Rs. 2,186 crore, showing a shortall of Rs. 814 crore f 27 per cent. The external resources fell short by Rs. 350 crore vhile the shortfall in domestic resources was to the extent of 46icrore. It is estimeted that overell private investment during the Thrd Plan wil] be ground Rs. 2,180 crore compared to the Plan target of Rs. 2,200 crore. Tie Plan period, however, witnessed a host of adverse circum- stunce: and, as such, echievements in several sectors fell short of Plen expectztions. ‘These included (i) increased expenditure on dcfene: since the war for survival with India in 1965, (1) drastic cuts in feregn vid aleny of terms of loans, (iii) suc- ive droughts and flecds 1967 end fina unrest that gripp during the’ p : Plen, ceusing Iccation of econet wi ceveisely affecting industriel growth end experts. ic activity Tie development expenditure for public xr during 1969-70 was fixed at Rs. 530 crore, to be financed from domestic resources of Rs. 294.6 crore, and foreign exchenge resources of Rs. 235.4 crore. Some of the principal objectives of the Annual Plan were (i) to attain aninersse in regional income of 7 per cent in East Pakistan and 6 per ceit in West Pakistan: (ii) to increase foodgrains preduction by nea ly tons; end (iii) to accelerate the rate of | industrial growtt to 10 per cent. (xxii) PAKISTAN ECONOMIC SURVEY 1969-70 Fourth Five-Year Plan The Fourth Five-Year Plan has been approved by the National Economic Council on June 2,1970, end enviseges a development programme of Rs.7,500 crore, Of this Rs. 4,900 crore has been allocated to the public sector and Rs. 2,600 crore to the private sector. The allocation for East Pakistanis Rs. 3,940 crore and for West Pakistan Rs. 3,560 crore. The development expenditure in East Pekistan in the public sector would increase from Rs. 1,130 crore in the Third Plan to Rs. 2,940 crore in the Fourth Plan, which is an increase of 160 percent. This comperes with en increase of only 43 per cent in West Pakistan. The objectives of the Plan include annual growth rate of 6.5 er cent, 7.5 per centin East Pakistan and 5.5 per cent in West Bokistan, reducing the disparity in per capita mcome between Various regions at the fastest possible rate, echieving a growth rate of 5.3 per cent in agriculture and 10.5 per cent in manufacturing, fncreasing exports by at least 8.5 per cent, reducing, the country’s dependence on forcign aid by financing 21 per cent of the total devel- opment expenditure from foreign assistance and 79 per cent by domestic efforts, reducing extent of unemployment and under- employment by providing 7§ lakh new job opportunities, construc- fion of about 5 lakh housing units for low-income. groups, improving educational standards,and move towards more equitable distribution of income and wealth by limiting the concentration of industrial wealth. The Plan has sufficient flexibility for any alteration, or modifica- tion by the subsequent civil Government. Regional Cooperativa Since the inception of RCD in July 1964, its activities have expanded, So far, 54 development projects have been approved, While 18 joint purpose enterprises are under implementation and a good umber of others are under exmination. The heads of State of the three RCD countries who met in Tamir on May 6-7, 1970, egreed that their Governments should make special provision for incorporating relevant RCD programmes in their development plans, end that a special committee should be formed for plen harmonisation, Satisfactory progress has also been achieved during 1969-70 in economic and cultural . coopera- tion. between Pekistan and Indenesia through IPECC, by planning joint ventures in the fields of communications, trade, technical and cultural cooperation and information media. BEERS EEE EEE EEE EEE ele SUMMARY OF MAIN FINDINGS (xxiii) FOREIGN ECONOMIC ASSISTANCE Economic development requires massive outlays of financial Tesoirces, both domestic and foreign. The Third Plan had envisaged fresh pledges of $2,850'million of foreign economic assistence from Consortium and non-Consortium soures. Total pledges during the Plan period, however, are not likel to exceed § 2, 565 million, indicating a shortfall of 10 per cent. In tams of commitments which are estimated at 02 million, the yosition is slightly better ause of the availability of $ 309 millon of uncommitted pledges zt the beginning of the Third Plan The aid disbursements on the other hand are likely to be $2,317 million compared to the Plen projection of $3,000 million, indiciting a shortfall of 20 per cent. As regards 1969-70, the commitments of Consortium and non- Conortium aid were estimated at $ 647 million. The total dis- bursanents during the year were likely to be $ 550 million. Foreign assistance has played a significant role in providing the muct needed impetus for development over the two Plan periods. Even in 1968-69, the aid-financed imports were over 30 per cent of the tetal. As a proportion of GNP, the gross flow of foreign assis- tance inchiding PL-480 imports end Indus Basin assistance, increased from3 per cent in 1959-60 to 6.4 per cent in 1964-65 and is expected to drop to 4.3 per cent in 1969-70. With the existing requirements of foreign assistance and adverse aid cimate, the debt servicing liability of the country is increasing ata fist rate. In 1969-70, it will be § 165 million. Inprovements in the situation are possible if recommendations of the Pearson Commission, and suggestions under the Second UN Devebpment decade, are implemented by the rich countries. The Poor :ountries are looking for a better aid climate with lower intereit rate, longer grace periods, abolition of tariff barriers, along- with setter and more stable prices for their exports in the ‘free’ markets of the developed countries during the Second Decade of Devebpment, - RURAL WORKS PROGRAMME ‘The Rural Works Programme is to associate the rural popula- tion it creating basic infrastructure for their own areas. It has also attempted to create a sense of voluntary participation, initiative and coopeation, (xxxiv) PAKISTAN ECONOMIC SURVEY 1969-70 The Works Programme formed en integral part of the Third Plan, which provided Rs. 182 crore. Of this Rs. 120 crore were for East Pakistan, Rs. 60 crore for West Pakistan and Rs. 2 crore for Programmes meant for ‘Azad Kashiair and Northern Areas. During the first four years of the Third Plan, Rs. 86.36 crore were spent, and an additione! Rs. 26 crore are likely to be utilised Guring 1969-70, bringing the totel utilisation to Rs. 112.36 crore. Showing shortfall of Rs. 69.64 crore or 38 percent. | Fast Pakistan siMieed' Rs. 75 crore, while West Pekistan and Central Programmes Utiliged Re, 35.8 crore and Rs. 1.54 crore, respectively. During the four years of the Plon, the mainphysical achievements jn West Pakistan were the construction of 627 miles of metalled rads, 311 bridges, 8.044 culverts, 691. civil dispensaries, 2,006 drains, instellation of 9,518 hand pumps, 365 tube-wells, 179 open surface Wells, 6,143. schools, 1.477 community centres and 347 veterinary dispensaries. During 1969-70, work on 201 miles of metalled roads, 300 miles of treated roads, 2,300 school buildings and 458 community centres will be completed. tan, the main achievements include the constrtc- tion of 55,931 mi F kutcha roads, 3.10! miles of pucca ros ds and 40,531 small bridges and culverts, 3.954 buildings for Thana Training Development centres, 5,508 miles of embankments, and 5,300 miles of canals and drainage. Under the Central Programme, in Gilgit Agency, 30 new irri- aation channels were completed and four reservoirs constructed. ‘An area of 1,625 acres of land was brought under cultivation. Pou pony” treeks, five foot-bridges, three culverts, six schoo} build- ings and a number of medical and veterinary dispensaries were also ie ae Approximately 11 lakh people were provided with Seasonal employment during the 48 years of the Third Plan. According to the decision of the Governors Conference, held in ‘April 1970, the programme in future will be implemented by the local Government institutions at union and district levels, elected on adult franchise basis. WATER AND POWER The effective use of water and power resourcs helps in building the infrastructure ‘of the economy, which is essen’ for the develop- trent of agriculture, industry and other sectors. ‘The revised Third Plan allocation for water and power develop- ent Was Rs. 804.7 erore, During the first four years of the Plan, EEE SUMMARY OF MAIN FINDINGS (xxx) however, only Rs. 420crore were spent. ‘The considerable shortfall was die to diversion of a part of the development funds for opera- Hon aid maintenance. of the completed or partially completed schemes, organisational and management problems, and lower inflow of foreign development loans. Water Sector During the Third Plan previo, tidal flood and drainage schemes are licely to cover 118 lakh acres, 10 lakh acres in East Pakistan and (8 lakh acres in West Pakistan. The new area brought under irrigaton drainage and flood protection is expected to be 37. 20 lakh acres, 10 lakh acres in East Pakistan and 27.20 lakh acres in West Pakistin during the same period. Of the total Third Plan allocation of Rs. 196 crore for water develepment programme in East Pakistan, Rs. 102.2 crore, ie. 52 percent of the total expenditure is estimated to be spent during the fist four years of the Plan. The development projects completed were “a) Daéca-Demra-Narayanganj Project, (6) Brahmaputra RightBank Embankment Project, (c) Ground Water Development and Pump Irrigation Project in the Northern Districts of East Pakistin, and (d) Improvement of Old Dakatia and Little Feni River in Noakhali and Comilla districts (Phase—I). Total allocation for water development for West Pakistan is Rs. 218 crore. West Pakistan WAPDA has so far undertaken nine water development projects at an estimated cost of Rs. 137.1 crore of whch 5 have been completed at a cost of Rs. 56.3 crore. The compbted water projects are : (i) Guddu Barrage, (ii) Rawal Dam, (ii) Tienda Dam, (iv) Chablet Khas Irrigation Scheme and (v) Pilot Wind Mills. Power Sector The Third Plan allocated Rs. 155 crore for_power development programme in East Pakistan. Of this Rs. 123.9 crore i.e. , 80 per ceat, was utilised during the first four years ofthe Plan. The generating capacity increased from 202 MW in June 1965 to 375 MW by December 1969 and is expected to go up to 488 MW by 1969-70. The Ingth of secondary transmission and distribution lines also increaied from 2,300 miles in 1965 to 5,200 miles in December 1969. For West Pakistan Third Plan allocated Rs. 162.5 crore for power development programme excluding tube-well electrifica- tion schemes. Ofthis Rs. 101.9 crore i.e.,63 per cent was actually utilise] during the first four years ofthe Plan. Generating capacity increaied from 815 MW in 1965 to 1, 684 MW in_ 1968-69 and the length of secondary transmission and distribution lines from 13,500 to 34, 00 miles during the same period. (xxxvi) PAKISTAN ECONOMIC SURVEY 1969-70 Atomic Energy Commission Considerable progress was made in the construction of the country’s first nuclear power station at Karachi. Commissioning of various systems and equipment have been started and maintenance personnel have been recruited and trained. Work was going on at Eyallpur and Mymensingh institutes devoted exclusively to plant genetics. AtLyalipur, where the construction work was complete, genfiec on five varieties of cotton were taken up. Medical centres at Karachi, Dacca, Multan, Lahore and Jamshoro continued to offer frellities for diagnosis and radio isotopic therapy. Two other medical centres at Chittagong and Rajshahi have almost been comple- ted and will start functioning soon. Satisfactory progress was also maintained in the activities of Atomic Energy Centres at Lahore, Dacca and Tandojam, and Pakistan Institute of Nuclear Science and Technology, Islamabad. TRANSPORT AND COMMUNICATIONS _-Forrapid economic growth an effective transport and communi: cations system is necessary as it serves it link all the sectors of the economy and bas a profound influence on national life. The Third Plan paid great attention to this sector with an allo- cation of Rs. 67] crore compared to theactual expenditure of Rs. 307 crore during the Second Plan. Physical and _ financial achievements in this sector during the first four years of the Third Plan have fallen short of the Plan targets mainly due to the dislocation by September 1965 war and reduction in the flow of foreign economic assistance, The estimated public sector development expenditure during ‘the first four years of the Third Pian amounted to Rs. 326.2 crore compared to the target “of Rs, 671 crore, Physical progress in most of the sub-sectors has Been below expectation, particularly in roads, railways and inland water transport. The Programme of Transport Corporation in East Pakistan has, however, been fullyimplemented and relatively better implementation was recorded in the case of PWR, road programme jn West Pakistan and civil aviation. The PER, during the first four years of the Plan has spent Rs, 40.02 crore on its development. Another Rs. 12.20 crore are likely to be spent in 1969-70, bringing the total expenditure to Rs, 52.22 crore compared to the’ target of Rs. 91.50 crore. The PER completed the construction of the new railway line Narsinghdi-Madanganj section and conversion of Rupsa Fast: Bagerhat from narrow gauge to broad gauge. Both these lines have been opened to passenger and goods traffic. During the first Geel ll SUMMARY OF MAIN FINDINGS (axxvii) four ‘ears of the Third Plan, the PWR spent Rs. 94.76 crore on its devebpment. “Another Rs." 20.38 crore are likely to be spent during 1969-70 bringing the total expenditure during the Plan period to Rs 115.14 crore compared to the target of Rs. 150 crore. During the year under review, the PWR completed the electrification of the nain line from Khanewal to Lahore and the entire section is expected to be in operation on electric traction by June 1970. Satisfactory progress was also made in the field of roads and road rensport in both the Provinces, Construction of a super high- way cf 90 miles between Karachi and Hyderabad was oompleted. Significant progress has been made in the execution of the development schemes of the East Pakistan Inland Water Transport Authority. All the five major river ports of Dacca, Narayanganj, Chanipur, Barisal and Khulna are now open for’ passenger and cargotraflic. It is estimated that Rs. 11.5 crore would be spent in inthepublic sector on inland water transport compared to the Plan target of Rs, 27.47 crore, ‘The strength of the merchant fleet which consisted of 55 ships with £3 lakh DWT at the end of Second Plan have risen to 70 ships vith 7.5 lakh DWT. The Government have taken a number of decisions to strengthen the merchant fleet for meeting the growing requirments of the country. A new shipping policy was anno- unced in April 1970 with special incentive to attract capital in East Pakistan and to broadbase the structure of the existing shipping companies. During 1968-69, the NSC carried 12.51 lakh freight tons com- pared :0 10.98 lakh freight tons in 1967-68. The total freight earning in 19669 amounted to Rs. 15.66 crore as against Rs. 13.19 crore in 1967-68. The Karachi, Chana and Chittagong ports continued to handle traffic that far exceeded their designed capacity. In 1969- 70 (up to December) Karachi port handled 46. 66. lakh_ tons, Chittagong 21.57 lakh tons and Chana 15.39 lakh tons of iraffic. Inthe field of civil aviation, the PIA continued to make steady progreis and introduced many routes including ‘Pear! Route’ touch- Ing Manilaand Tokyo. Duringthe Third Plan period, the PIA added 13 international stations and about equal number on the domesic routes. By the end of the Plan, the PIA would be ‘operatng to 27 international and 29 domestic stations. In the Post and Tele-communications sector, during 1969, 538 new Post ofices were opened bringing the total number of post offices in (xxxviii) PAKISTAN ECONOMIC SURVEY 1969-70 thecountry to 13,545. The target of opening 2,500 new post offices. Curing the Third Bian is likely to be achieved. For quick delivery of letter, a new air mail express service *ATREX’ has been intro- duced from Januaty 1970. During the first four years of the Third Plan, 95,500 new telephone connections were expected to be provided. | Anothey 31,000 were expected to be provided in 1969-70. The work on the scheme for establishing an earth station cachin East and West Pakistan Wwastaken inhand in January 1970. Steady progress has also been made in the development of Broadcasting and Television. Installation of two 100 Ww ‘shortwave transmitters at Islamabad, one 100 KW shortwave trans- sitter at Dacca and a 10 KW mediumwave radio station at Rangpur have already been completed. The installation work on 120 KW medium wave transmitter cach at Hyderabad and Multan and Construction of 2. Broadcasting House at Multan are nearing com- piction. The Third Plan target of, providing the television service at Karachi, Dacca, Lahore ‘and Rawalpindi-Islamabad_ has. been at nioved, By the end of 1970, about 77 per cent of the population jn East Pakistan and 56 per cent in West Pakistan is expected to be ‘brought within the viewing range of the television service, by estab- Tishing additional stations at Khulna, Chittagong, Rajshahi, Hydera- bad and Lyallpur. Plans are also being made for launching educa- tional television in both East and West Pakistan to supplement formal class room education at the secondary school level. SOCIAL DEVELOPMENT The importance of social development has been duly recognised in the development programmes of Pakistan. Its increasing impor- taaceis reflected in the financial allocations under various Plans, v1Z., Rs. 179 crore in the First Plan, Rs, 333 crorein the Second Plan and Rs, 619.8 crore in the Third Plan, ‘which varied between 20.6 per cent and 30.8 per cent of the total allocations. In line with the general shortfall in Third Plan tad the social sector also did not achieve the targets jn financial_and physical terms as the estimated expenditure during the first four years against the total allocations was 39 percent in education and technical training, 58 per cent in health and family planning. 39 per cent in labour 2nd social welfare and 52 per cent in physical planning and housing sector. Animportant achievement of the year 1969-70 was the introduc- fon stn ney education policy which envisages an expenditure of Ro. 892croreduringthe Fourth Plan. The new policy lays special Be hasis on qualitative improvement and teaching of sciences eae SUMMARY OF MAIN FINDINGS (xxxix) fromthe earlier stage, improvement in the pay scales of teaching staff and yrovision of extensive amenities to the student community. Performance in malaria eradication and family planning, two of the biggest health programmes which received about 46 per cent of th: total health sector allocation, has been satisfactory. Under the malaria eradication programme about 1] crore people have been covered by June 1969. Family planning programine launched in 1965 has also yielded encouraging results. jn order to eradicate labour unrest, the Government evolved a nev labour policy in July 1969, which provides for far-reaching improvements in labour management relations. Higher wages were also ixed ranging between Rs. 115 and Rs. 140 depending on the locaton of industries. The new rates are applicable to unskilled workers in industrial and commercial undertakings employing 50 01 more workers. It also envisages to implement various labour welfare schemes. A salient feature of the new policy is that it recognises the right to strike to workers and lockout to management unde: clearly defined conditions. ‘The overall progress in physical planning and housing sector has not been satisfactory due to lack of appropriate institutions, lowering of se:toral priority and shortage of competent physical planners. However, 50,000 residential plots were developed against the Plan target of 1.30 lakh, 25 urban water supply, sewerage and drainage schenes were completed against the target of 45 and 64,000 tubevelis/hand pumps sinked in East Pakistan against the target of 1.60 akh and 60 per cent work relating to establishment of two housingresearch centres was also completed up to June, 1969. CHAPTER 1 NATIONAL INCOME HATIONAL INCOME *is the loose name given for the money measure of overall anmul flow of goods and services in the economy. Often the equivalent name, natioial product, is used. Tt is a useful measure of economic activity of a country during the year. Over:Il Economic Situation during 1969-70 ‘The overall economic situation in the country has recorded modest improve- ment uring 1969-70 over 1968-69, even though the country has been passing through a ver‘ critical stage. Provision, estimates place the figure of gross national produer, at 19'9-60 factor cost at, Rs. 5,428 crore in 1969-70 compared to Rs, 5,129 crore in 196859, indicating a tise of 58 percent compared to the rise of 5.7 Percent in 1968.59" and the target of 6.5 per cent in 1969-70. ‘he year 1969-70 marks the end of the Third Plan. The GNP rose by 32 pe:centduring this petiod compared to an increase of 30. 4 per centduring the Second Plan. The Third Plan aimed at an increase of 37 percent. Annual average growth rate of GNP during the Third Plan stands at 5.7 per cent compared to 5.5 per centduring the Sond Plan, and 2.4 per cent during the First Plan. Athough the achievement during the Third Plan is not up to the target, it isbetter than that of the Second Plan, The country during the Third Plan was subject to the unique strain of battle for survival, due to Indian military aggression in 1965. There ‘was aso a shortfall in forcign loans and assistance. Natural calamities also played their sart. In spite of all these unfavaourable conditions, the economy during the ‘ThirdPlan performed better than the Second Plan and much better than the First Plan. Table I shows the annual growth rate of GNP during the First Plan, Second Plan ind the Third Plan Table 1 ANNUAL AVERAGE GRowTH RAE oF GNP ‘Year First Plan Second Pita Third Plan It, 03 52 46 2nd. 60 39 30 ad : os as 15 4th 7 14 83 S17 sth 43 4s 58 ‘Annal average 24 55 37 ‘Meat deviation 08 * Jor concepts of national income, please see Appendix “A*. 2 PAKISTAN ECONOMIC SURVEY 1969-70 “The mean deviations of the growth rates of the thre plan periods indicate a very good sign of the health of the economy. ‘The mean deviation declined from 2.2 very Best Blan to 1.3 sn the Second Plan and Luster fe 08 in the Third Plan. inthe hows that the economy is eradually becoming more stable. Table 2 SecToRAL ConTRIBUTION TOWARDS GROWTH RATE OF GNP el ‘Sector 1968-69 1969-70 1, Agriculture 1a 274 2. Manufacturing .- : i 0.98 073 3. Construction ‘ 143 (eas 4, Wholesale and retail trade : 0.80 0.76 5, Others i 7 1.40 194 GNP growth rate 3a 58 Ont of 5.Spercent growth rate of GNP during 1969-70, agriculture bascontributed 2.7 per gent compared to its contribution of 14 per for towards the growth rate of 57 percent during 1968-69. Each of the rectors namely manufacturing, wholesale and 2:1 Ptroade and. public administration and) defence contributed 0.7 per cent. The reat eaten of construction sector is (—) 0.2. peers ‘Others’ contributions are core eenificant. Table 3 indicates sectoral growth rate. Table 3 Sectoral GrowTH RATE FraPaa Second Plan Third Plan 1968-69 1969-70 ‘Annual Sector ‘Annual Annual ieee. Average Average 1. Agriculture 14 34 45 61 (a) Major crops ee 40 49 13 () Others 4A 32. 34 36 2. Mining and quarrying 92 Ba 38 46 3, Manufacturing 5 100 68 6 4. Construction 95 282 18 (28 5. Electricity gas, water and ‘sanitary services 184 22 ios 126 10s 6. ‘Transportation, storage #04 ‘communications 32 ss 83 65 60 7. Wholesale and retail trade 23 6s 56 65 6 8. Banking and insurance 185 98 182 184 189 9. Ownership of dwellings 26 26 26 27 25 10. Public administration and defence 1.4 62 37 54 16 11, Services : 35 38 37 37 37 12._ GNP 7 . 3 33 81 51 58 —d GROSS NATIONAL PROD! as ‘OST OF 1959-60 OTHERS Eee Z PUBL ADMINISTRATION. — BoP GNI | CONSTRUCTION AND 5 SWNERSHIP DF CWELLINGS MINING QUARRYING MANUFACTURING AGRICULTURE ~~~» yn = Ss Gross national produst fail Mining ane quarrying 4Z" a . be anototiuring f a e ont | Banking and insurance Construgtion Elec, Gas, Mater fanaisanitery services| - and detence Transportation storage /} Janis communication n= 4 = rvices LK wnolesate aa =| a and retail trade Z ‘Ownership - t + Bwellings | {44 NATIONAL INCOME 3 White GNP has increased by 5,8 per cent in 1969-70, the banking and insurance sector 1as increased by 18.0 per cent, but construction sector has declined by 2.8 per cent The gowth rates of all other sectors remained in between the two extremes. Agrculture sector rose by 6.1 percent in 1969-70 compared to 3.0 per cent in 1968-0, 4.5 per cent during Third Plan, 3.4 per cent during the Second Plan. and 1.4 pe cent in the First Plan. In the manu facturing sector the petformance of large-wale sub-sector is better than the small-scale, The large-scale sub-sector has incteaed by 7.5 per cent in 1969-70 compared fo 10.8 per cent in 1968-69, while smallscale sub-sector has maintained a steady srowth rate of 2.6 per cent all along. The annual average growth of large-scale sector is 8.6 per cent during the Third lan compared to 15.1 per cent during the Second Plan. The slower growth tate in the large-scale manufacturing during the Third Plan has been due to a numbe of factors such as lesser and restricted availability of foreign loans and assisimee, change in the sectoral priority ete. ‘Tie construction sector has declined by2.8 per cent in 1969-70 compared to the rise of 24.3 per cent in 1968-69, 7.8 per cent. during the Third Plan, 25.1 per cent during the Second Plan, and 9.5 per cent during the First Plan. Transportation, storag.and communication sector and wholesale and retail trade sector have maintaned an almost steady growth rate of 5 to 8 per cent annually Banking and iusurance sector has increased by 18.9 percent in 1969-70 and by 18 er cent throughout the Third Plan period. It rose by about 10 per cem during the Seond and by 16 per cent in the First Plan. Ovnership of dweliings has increased by 2.5 per cent in 1969-70. It maintained almostsinnilar growth rate throughout the whole of Third and First Plan period Table 4 Stcrorar INDICES Setor 1959.60 1968.65 1969-70 J. Apicuttare —., 1000 1180 468 2, Manutacturiog 1000 1608 22.9 3. Cawiruetion : 1000 2981 419.0 4. Bletrcity, eas, water and sanitary services 100.0 2645 4336 5, Tansportation, storage and communication 100.0. 1305 193.6 6. Wiolesale and retail trade 100.0 1394 182.9 7. Barking and insurance : 1000 159.4 370s 8. Pullicadministration and defence, 100.0 1345 248.7 9. GIP : 1000 1304 126 Th sectoral indices with base 1959-60. 100, shows that while GNP rose by 73 per cent in 1969-70 over 1959-60, electricity gas and water services rose by 334 percent ; the construction sector rose by 319 per cent, banking and insurance 271 percent, public administration and defence by 149 per cent, manufacturing 123 per cent and agriculture by only 47 percent. The population rose by 4 PAKISTAN ECONOMIC SURVEY 1969-70 30 per cent during this period Teaving a surplus of 17 per cent ip agriculture which 30 per conccjentio cover the additional demands generated from much higher growth in other sectors of the economy. Table 5 Composition OF GNP per cent Sector 1959.60 1964-65 1969-70 1, Agriculture i 332 8a 453 2. Manufacturing .. 93 ns 10 3. Construction 2a 47 50 4, Transportation, storage and commanica- tion 7 : 59 39 66 5, Wholesale and retail trade ns 124 124 6 Others ‘4 19) 14 181 RHEE aCe EeEbaS Eee eee 100.0 100.0 100.0 Of all the cieven sectors of the economy, agriculture is the largest one employ- ing more than 80 per cent of the population ané contributing abov £0 Tet ‘cent of the ing mort Wat owards GNP., In 1969-70, the contribution af agriculture. sectoe Weyer eenc of which major crops have contirbuted 274 per ett, Mee ‘erops 5 Brrcent, livestock 8.3 per cent, fishing 2,8 per cent and Fores, 0.3 per cent. $3 Pio the ditect contribution of 45.3 per cent, the agriculture,

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