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Assignment of Economics of Pakistan

This document provides a survey of Pakistan's manufacturing sector, focusing on four key sectors: textiles, fertilizers, cement, and minerals. It discusses the importance of manufacturing to Pakistan's economy, provides an overview and recent performance statistics for each sector, and highlights some of the government's policies to support these industries, such as fertilizer subsidies. The textile sector is the largest component and includes cotton spinning, weaving, and ready-made garments. Fertilizer production meets domestic demand but exports were allowed without subsidy this year. Cement dispatches reached record highs in 2017 and domestic consumption grew over 10% while exports declined. The minerals sector grew slowly at 1.34% and the government aims to boost

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53 views

Assignment of Economics of Pakistan

This document provides a survey of Pakistan's manufacturing sector, focusing on four key sectors: textiles, fertilizers, cement, and minerals. It discusses the importance of manufacturing to Pakistan's economy, provides an overview and recent performance statistics for each sector, and highlights some of the government's policies to support these industries, such as fertilizer subsidies. The textile sector is the largest component and includes cotton spinning, weaving, and ready-made garments. Fertilizer production meets domestic demand but exports were allowed without subsidy this year. Cement dispatches reached record highs in 2017 and domestic consumption grew over 10% while exports declined. The minerals sector grew slowly at 1.34% and the government aims to boost

Uploaded by

Ma An
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Assignment of Economics of

Pakistan

Survey of Manufacturing sector


of Pakistan

B.COM 3RD [Morning]

Submitted by

Usman Ashraf Roll no 17

Rida Amjad Roll no 10


Introduction

Manufacturing sector is the backbone of Pakistan’s economy and


constitutes the second largest sector of economy contributing
13.5 percent to Gross Domestic Product (GDP) and generating
biggest number of industrial employment with technology transfer.
It comprises mainly of Large Scale Manufacturing (LSM) with 80
percent share in Manufacturing and 10.7 percent in GDP whereas
small scale manufacturing accounts for 1.8 percent in total GDP
and 13.7 percent share in manufacturing. The third component of
the sector is slaughtering and accounts for 0.9 percent in overall
GDP and its share in manufacturing is 6.7 percent. The overall
manufacturing sector continued to maintain its growth momentum
with more vigor during the current fiscal year. During FY 2017, it
recorded an impressive growth of 5.3 percent against 3.7 percent
of last year which helped overall industrial sector to improve by
5.0 percent

Selected Manufacturing Sectors


 Textile Sector
 Fertilizer Sector
 Cement Sector
 Minerals Sector
Further details regarding these sectors are discussed below
1. Textile Sector

Ancillary Textile Industry


The ancillary textile industry includes cotton spinning, cotton cloth,
cotton yarn, cotton fabric, fabric processing, home textiles, towels,
hosiery and knitwear and readymade garments, these
components are being produced both in the large scale organized
sector as well as in the unorganized cottage / small and medium
units. The performance of these various ancillary textile industries
is illustrated as under:-

i.Cotton Spinning Sector


The Spinning Sector is the backbone of the Pakistan’s textile
industry. At present, as per record of Textile Commissioner’s
Organization (TCO), it comprises 523 textile units (40 composite
units and 483 spinning units) with 13.269 Million Spindles and 185
thousand Rotors installed and 11.083 million spindles
and 140 thousands rotors in operation with capacity utilization of
84 percent and 76 percent respectively, during Jul-Mar, 2017.

ii. Cloth Sector


There are three different sub-sectors in weaving viz, Integrated,
Independent Weaving Units, and Power Loom Units. There is
investment in the shuttle-less looms both in integrated and
independent weaving sector. This trend is likely to intensify in the
country. The power loom sector modernized and registered a
phenomenal growth over the last two decades. The growth of
power loom sector is due to favorable government policies as well
as market forces. The production of cloth in Mill Sector is
reported while the production in Non-Mills Sector is not reported
and therefore, is estimated.

2. Fertilizer sector
The fertilizer industry is an integral part of Pakistan’s economy.
The Pakistan fertilizer industry produces imports and distributes
various types of fertilizers. The government has pursued a
policy of supporting the industry in the form of feed gas
subsidies, GST relaxation and increasing support prices for
commodities.
There are ten urea manufacturing plant, one DAP, three NP,
three SSP, two CAN and one plant of blended NPKs having a
total production capacity of 8,983 thousand product tonnes per
annum. Although, the installed production capacity for all
products has attained the level of 8,983 thousand tonnes per
annum, the actual production for all products remained at 8,015
and 8,065 (estimated) thousand product tones for 2015-16 and
2016-17 respectively. The entire fertilizer products are
manufactured by the private sector.
At present, the installed production capacity (6,323 thousand
tonnes) of urea fertilizer is more than the national demand of
about 6,000 thousand tonnes per annum. The annual
production of urea for 2016-17 is estimated as 5,900 thousand
tonnes, which is less by 6.7 percent of installed capacity of
urea fertilizer.
The recommended level of fertilizer use in Pakistan for
Nitrogen (N), Phosphate (P) & Potash (K) is 2:1:0.5. The
government has been endeavoring hard to boost the
agriculture sector of economy, for which government has
subsidized the nitrogen and phosphate fertilizer under Kissan
Package. During current fiscal year FY2017 estimates shows
that nitrogen (N) Potash (K) off take has jumped by 33.0 and

82.5 percent while phosphate off take has surged by 23.2


percent respectively, during first nine months current fiscal year
as compared with same period last year. The rise in off take of
nitrogen and phosphate fertilizer is due to subsidy provided by
the government.
The government has allocated Rs. 27 billion as cash subsidy
on fertilizer sales in fiscal year budget 2016-17 but it was
discontinued as the entire amount was consumed. Later on,
Prime Minister of Pakistan directed that cash subsidy on
fertilizer would be continued till the end of fiscal year 2016-17.
To support the domestic fertilizer industry, the government this
year has allowed the export of 300,000 tones of urea fertilizer
without the subsidy.

3. Cement Sector
Cement dispatches reached historic heights in March 2017
touching almost 4 million tons as the factories utilized their full
production capacity to meet robust demand in the local market.
The ever increasing domestic market has vindicated the
manufacturers thrust on adding new capacities. The cement
industry is playing its due role to get the momentum going and
in April 2017 the industry dispatched 3.576 million tons of
cement against 3.551 million tons dispatched during the
corresponding month of last year.

In the first ten month of this fiscal year the industry has
dispatched 33.880 million tons cement showing an overall
growth of 6.21 percent over the corresponding period of last
fiscal year. During the period the domestic consumption
increased by 10.74 percent but exports declined by 18.63
percent. It is worth noting that the domestic cement
consumption during July-April FY 2017 increased by 10.22
percent in the North and by 13.14 percent in the Southern part
of the country. In contrast the exports from North declined by
14.42 percent compared with a decline of 26.19 percent in the
South. This should be a matter of concern as in the past the
South based mills being nearer to sea were leading cement
exporters. The capacity utilization during first ten months of
current fiscal is 87.64 percent.
The domestic dispatches in April 2017 were 9.53 percent
higher than the dispatches in April 2016. The exports in
contrast declined by a whopping 50.75 percent. This massive
decline in exports reduced the dispatches growth in April 17 to
only 0.70 percent. In the first ten months of this fiscal year the
domestic dispatches increased by 10.74 percent while the
exports registered a decline of 18.63 percent.
4. Mineral sector
In the wake of the 18th Amendment, provinces enjoy
great freedom to explore and exploit the natural
resources located in their jurisdiction, with the result that
they are undertaking number of projects from their own
resources, or in collaboration with federal government or
donors to tap and develop these resources.
Pakistan is bestowed with all kinds of resources which
also include mineral resources. Pakistan possesses a
large number of industrial rocks, metallic and non-
metallic which have not been evaluated. The mineral
wealth of Pakistan contributes meagerly to its GDP. This
is due to application of outdated management
techniques, inadequate capital and antique technical
know-how besides unsatisfactory law & order situation
in the areas where major bulk of our mineral resources
lie.
The Mining and Quarrying sector grew by 1.34 percent
in FY 2017 as against 6.86 percent last year. Calcite,
Bauxite, Ocher, Sulphur, Chromite, Marble, Coal,
Quartz, Gypsum and Lime stone posted a positive
growth rate of 138.32 percent, 116.25 percent, 60.27
percent,
55.22 percent, 42.62 percent, 30.14 percent, 22.84
percent, 18.68 percent, 12.69 percent and 8.47 percent
respectively. However, some witnessed negative growth
rate during the period under review such as Barytes
73.00 percent, Magnesite 57.73 percent, Dolomite 40.93
percent, Soap Stone 6.11 percent, Rock Salt 1.73 percent and
Natural gas 0.10 percent

Punjab, being second largest (area-wise) province of the


country, has vast mineral potential like coal, salt, iron ore,
limestone, gypsum, silica sand and fire clay etc. The
government of Punjab is striving to follow a road map on
mineral exploration projects.
• To enhance the contribution of mineral sector to GDP through
improved production. • To expand mining sector by focusing on
exploration and evaluation of mineral resources. • To enhance
public sector investment on resource mapping, Geo-database
development and provision of physical infrastructure, roads and
electricity etc.

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