Analyzing economy on the basis of functional perspective.

Since the country's independence in

1947, the economy of Pakistan has emerged as a semi-industrialized one, based heavily on
textiles, agriculture, and food production, though recent years have seen a push towards
technological diversification.The Economy's major function is provision of goods and services to
is members.it is directly responsible in the establishment of society.

Our economy is directly dependent on working of some of its major departnments like those of
agricultureindustrial and differnent services groups which are further dependent on
hardworking of members of society.It will emerge stronger if members are passionnate and
energetic while it will fall if there members are lazy and dissatisfied.

The major functional components for economy of Pakistan are

1) Agriculture

2) Industry

3) Services

Agricultural Component:-
Agriculture is considered the backbone of Pakistan's economy, which relies heavily on its major
crops.Agriculture constitutes the largest sector of our economy. Majority of the population,
directly or indirectly, dependent on this sector. It contributes about 24 percent of Gross
Domestic Product (GDP) and accounts for half of employed labour force and is the largest source
of foreign exchange earnings. It feeds whole rural and urban population. Realizing its
importance, planners and policy makers are always keen to have reliable area and production
statistics of agricultural crops well in time.

Agricultural credit is also a most important prop of growth in agricultural sector. Success for any
business credit plays a pivotal role. Governments take steps for provision of agriculture credit to
the people in the rural areas to the purpose of ornamental the production. Agriculture credit
makes an opportunity to improve the production by access of technology and also efficient labor.
Now approximately 3950 bank branches in Pakistan are working to facilitate the farmers with
agriculture credit.

According to Ministry of Finance. About to be 43% of labor rule and 21% of GDP Growth is
achieved from this sector.

Major exports or cash crops of Pakistan are wheat, rice and cotton. 9.8 billion Bales of cotton are
produced per year. Rice crop is produced 4.3 million ton per year. These agricultural
commodities are exported to various countries against foreign exchange. This foreign exchange is
utilized for the import of industrial or technological equipments such as machinery or
automobiles. Further this foreign exchange is utilized to improve the infrastructure of economy
or for improving the other sector of economy like education, health and investments.

Industrial Component:-
Industrial Sector is second largest sector of our economy.Industrial sector contribution to GDP
18.5%.It contributes to following components which builds up a society

Higher standard of Living

Industrialization helps in increasing the value of output per worker. The income of the labor, due
to higher productivity increases. The rise in income raises the living standard of the people.

Economic Stability:

Industrial sector also helps government to stabilize price in country when goods are available in
sufficient quantity, there is n0 change of increasing prices of these items.

Industrialization is the best way of providing economic stability to the country. A nation which
depends upon the production and export of raw material alone cannot achieve a rapid rate
people.

Improvement in balance of payments

Industrial sector earns a good amount of foreign exchange for the country which is used for
repairing national debt and for imp0rtant of machinery etc.

Industrialization brings structural changes in the pattern of foreign trade of the country. It helps
in increasing the export of manufactured goods and thus earns foreign exchange. On the other
hand The processing of raw material at home curtails the import of goods and thereby helps in
conserving foreign exchange.

Increase in Employment

Industrial Sector provides employment to majority of population. This sector provides

employment to both skilled and unskilled labour. According to one estimate more that 50% of
total labor force is employed in industry.

Pakistan is a developing country and there population growth rate is 1.573% in 2011. but the
rate of increase in G.N.P is relatively low, therefore, there is general unemployment (25 %) in
2009, and disguised unemployment is increase in agriculture sector. Developed industrial sector
can absorb millions of unemployed which will increase not only the income level but also the
standard of living.

Increase in the Government Revenue

Industrial sector increases revenue of Government because industrial sector pays different type
of taxes to government like Excise Duty,Custom Duty,Corporate Tax and Sales Tax.

Industrialization increases the supply of goods both for internal and external markets. The export
of goods provides foreign exchange. The customs excise duties and other taxes levied on the
production of goods increase the revenue of the state.

Increase in social welfare

Industrial sector is also plays great role in social welfare this sector meets different needs of
society like food and fiber requirement of population.

Industrial development increases the revenue of the government which is spent on the welfare
of people. New roads, dams, buildings and parks are constructed.

Functions of Services:-
The cultivation and transportation of illicit narcotics remains a large sector of the informal
economy. Pakistan is one of the world’s leading producers of opium poppy (for the production of
heroin) and also produces or transports cannabis (as hashish) from Afghanistan for local markets
and for reexport abroad.

3)Animal husbandry provides important domestic and export products. Livestock includes cattle,
buffalo, sheep, goats, camels, and poultry. These animals provide meat and dairy products for
local consumption, as well as wool for the carpet industry and for export and hides and skins for
the leather industry. The contribution of forestry to national income remains negligible, but that
of fisheries has risen. Fishing activity is centred in Karachi, and part of the catch of lobster and
other shellfish is exported.

4) Trade has grown into one of the major sectors of the Pakistani economy and employs a
significant proportion of the workforce. Although there has been a trend toward increasing
exports, the country has had a chronic annual trade deficit, with imports often outstripping
exports. Over the years, important changes have taken place in the composition of foreign trade.
In particular, while the proportion of total exports from primary commodities, including raw
cotton, has fallen, the share of manufactures has greatly increased. But the bulk of the
manufactured products coming into the export trade consists of cotton goods, so that Pakistan
remains as dependent as ever on its leading cash crop. The other manufactures exported come
mostly from industries based on agriculture, such as leather and leather goods and carpets;
exports of rice and petroleum products are also important.
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