Importance of industries in Pakistan:
The development of industries brings an increase in national income, provides employment opportunities to the citizens, and creates balance in payment position by manufacturing export goods and substitutes for importable goods, and most importantly it also provides support to revitalize other sectors of our economy. So, in countries like Pakistan which are in a developing position, industry plays a vital role in their development.
In the past few years, industrialization contributed to the largest portion of the economy. Their policy is to make Pakistan self-sufficient and for this, not only the public sector but the private sector as well encouraged to take initiative in the development of Pakistan through industrialization. With the help of foreign investment and the technical skills of locals, it is acknowledged that it results in quick achievements in the industrial program, and such a rational approach brings Pakistan on the way to development.
Industrial growth in Pakistan:
Pakistan is a country of gifted resources and talent. so industrial policy focuses on industrial growth by utilizing natural and human resources and it leads them to increase the share of the manufacturing sector of Pakistan so the total economy can be improved. Although they prioritize strengthening the industrial structure by an increasing focus on more advancements in engineering, chemicals, and other important industries.
It is also playing a vital role to secure optimum utilization of the current capacity of the industries and helps in the improvement and betterment of such industrial units which are may be declining or closed so according to their economic feasibility and managerial competence they can be in their attention too.
As Pakistan is a gifted country in the case of talent as well, Pakistan does have a large class of potential entrepreneurs who can earn from economic activities within the country by utilizing limited resources. These potential entrepreneurs can take responsibility for the industrial field and help Pakistan to grow, but all they required is freedom from unnecessary control regulations and taxes. If they get the freedom they required, they would be the reason for industrial growth and bring rapid growth in the private sector of industry.
Government of Pakistan:
The government of Pakistan is currently focusing to improve the technical and financial performance of the public sectors, and most of the investments required in the public sector for improvements in their program or the launch of any new program come from their own enterprise’s retained earnings and provision of depreciation.
The government of Pakistan is fostering healthy competition between public sectors and private sectors and also between all industries. To create a climate of equality the government improvised and maintain the existing policy of equalizing the conditions so private sectors can compete with public sectors. Also, the government established and managed the entrepreneurial foundation, so the private sector can be more developed and it will create a mutually supportive relationship between the public and private sector.
Some of the public sectors in the different industries are steel, fertilizer, cement, petroleum refining, petrochemical, automotive equipment, etc.
To motivate private sectors government in the past was also willing to admit their participation even in the fields which are exclusively operated by public sectors. But the public sector fills the space where they consider that the private sector could not generate the investment of large amount or acquisition of sophisticated technology or where they feel the private sector would play monopoly in the market.
Problems appeared in industrial units:
There are many sick units in industries, whose default cases have been ruled by the creditor banks and DFI’s. The reports show that over the past few years there are 868 units with a total unpaid loan amount of 107 billion.
The government established the corporate industrial and restructuring corporation to confront the long-term problems faced by industries and the problem of sick units to overcome the financial difficulties of NCBs and DFIs. The corporate identify the lot of 90 sick units and announces them for sale. So, they approved the transfer of ownership of those sick units and managing controls of those units. This initiative helped them successfully remove the loan of 12.2 billion from the balance sheet of the financial sector. The responsibility of CIRC is to liquidate the unprofitable and declining which cannot be recovered in good shape now such units. The implementation of this plan results in a positive outcome and is quite successful.
SMEDA:
For industrial development SMEDA was established by the government and the government is still improvising it to promote small medium enterprises for industrial growth in the country. Their objective is basically to provide a policy work with the implementation mechanism for achieving economic growth in the country.
SMEDA helps the entrepreneurs and promotes the entrepreneurial culture in Pakistan so the industry can grow and create job opportunities for the people. They helped the entrepreneurs in four areas through their specific policy measures which are, business environment, access to finance, human resource development, and support for technology upgradation and marketing.
SMEDA monitors and guides the entrepreneurs and helps in resource allocation and provides them with potential sources of funding. They help in creating linkages with public sectors too so it will help them in fiscal policy etc.
SMEDA is taking the initiative to provide equal opportunity for all. Women entrepreneurs also take steps to help in the development of Pakistan, and they provide knowledge about technical and other skills so entrepreneurs would implement it and results in economic growth.
SMEDA creates an environment of equality so public and private sector, large and small, and medium firms can compete with each other resulting in job creation.
The most important benefit of it is the reduction in unemployment and the creation of awareness to expand industries within Pakistan and help in economic growth.