GOVERNMENT OF PAKISTAN

PlAN!N!NG C M 4SSION O M

THE SECOND

FIVE YEAR PLAN

JUNE 1960

ON 21 June 1960, the Economic Council of the Government of Pakistan accorded its general approval to the objectives, principles, and programmes of development contained in the Second Five Year Plan. The Council further decided that no major departure from the Plan should be made without the approval of the Economic Committee of the Cabinet and, in matters of fundamental importance, without the approval of the Economic Council.

TABLE OF CONTENTS

PART I-THE PLAN AND ETS IMPLEMENTATION

CA 1.-Background. HP m

Characteristi cs and Size of the Plan

..
..

Review of the First Five Y a Plan er Current situation i Characteristics of the Second Plan . ... Strategy of the Plan . Size of the Plan . Comparison of the First and Second Plans Rationale and summary of sectoral allocations Agriculture Water and power Industry . Fuels and minerals Transpod and commurmications , Housing and settlements Education and training Health. manpower. social service a$d Village AID Physical targets Internal consistency of the Plan . 8. Flexibility of the Plan Structural changes in the economy

..

.. .. ..

.. . .

.. .. .. .. ..

..

.. .. .. ..

.. .. .. ..

..

.. ..

.. .. .. .. .. .. ..

.. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. ..

CHAPTER 2.--Resources and Financing

Resources . Gross capitd formation Gross domestic savings Foreign assistance Fhancing ... Public sector Semi-public sector .. Private sector Financing of the Provincial programmes Estimates of gross national product

.. ..

..

.. .. .. .. ..

.. .. .. .. ..
.

.. ... .. .. .. .. .. .. ..
..

.. . ..

.. .. ..

.. .. .. .. .. .. .. .. .. .. ..

&W'~BR 3.--Fiscal

and Monetary Policy

Taxation policy Review of preseat tax stmetwe FuEuretaxpolioy Additional taxation Growth of tax revenues Conclusion Financial stability Open inflation Suppressed inflation. Safe W t s of deficit financing Idationary danger Policy against inflation Price:assumptions for the Plan Credit poliey Comerciai banks Spgcializea credit institutions Stock exchange wurancs: Interest rate policy Fiscal and monetary controls

..

.. ..

..

..

..

..

..

..

.. .. .. ..

..

.. .. .. .. .. .. ..

..

..

..
.. .. ..

..
..

.. .. .. ..

..
1.

..

.. ..
.. .. .. .. .. .. .. .. ..

Foreign exchange expenditure Foreign exchzlnge earnings Termsof trade 3alance of payments in the; F b t Plan T e impact of aid on the economy h Manee of payments in the Second Plan Projections of foreign exGhgnge expenditure Projections of foreign exchange eaaings Commercid policy Export policy Import policy Foreign exchan~e budgeting and control For@ exchange reserves External aid requirements sr -y

..

..

..

.. ..

..

..

.. .. .. .. .. ..

.. .. .. .. .. ..

Machinery for planning and i implementation n Problem areas in planning and implementation

@HAPTRR

.. .. .. .. .. C . . ~ c h and Statistics .. .. Research in s W scienes .. Spwial libraries .. .. .. Statistical development .. .. Sbndard definitions and ~hssBcations Statistical agencies .. .. Training and weer service .. Sfanding advisory ci)mcil ..

Admh&ative orgmization and proeedures Budgeting and controls The role of the public services Organization and mthods Personnel administration Public corporations and authorities

.. .. .. .. .. .. .. .. .. .. ..

.. ..

.. .. ..
.. .. .. .. .. .. .. ..

..

..
..

PART IL-DFNELOPMENT OF PHYSIC& RESOURCES

Policy and administration Organization for fqpicultural development Programme acceleration Cooperative fanning and land management ' Samation programme Crop production Future requirements and produdion targets Soarces of increased production Development of new areas and colon%ation . ~ e & m and or@ manures Plant protwtion Segd multiplication a d distribution Other improved practices Economic incentives Subsides Mgchaabtion Soils Agxic3Ws;aJs.efltistics Farm management ttnd mno& studies ~ ~ r i c u lmarketing tu~ food^ storage Agrioultuml research

..

..

..

..

..

..

..

.. .. .. ..
.

..

..

.. ..

.. .. .. ..

..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. .. .. ..

Animal husbandry .. . Breeding .. . . Disease control and preservation1of good stock Animal nutrition .. .. .. Dairying .. . .. . Livestock products . . .. . Research .. .. . .. Training of personnel .. .. . Development expenditure .. .. . Range management .. .. .. Forestry . .. .. .. General approach to forestry development .. Surveys .. .. .. .. . Extraction and use . .. .. .. Afforestation and regeneration .. Fasm forestry .. .. . Afforestation of trees of special economic importance Research .. . .. . .. Education and training . .. . Forestry statistics .. .. .. Parks and game sanctuaries .. .. .. Soil conservation . .. .. .. Fisheries . .. .. .. . Programme for the Second Plan period .. Marine fisheries .. .. .. .. Inland fisheries .. .. .. .. Marketing .. .. .. .. . Training and education . .. .. Research . . .. .. Statistics .. .. .. .. Private sector .. .. . . Cooperative organization .. .. .. Agricultural education .. .. .. .. Rural credit and cooperative marketing .. .. Proposals in the Second Plan . . .. . Taccavi loans .. .. .. .. Agricultural Bank .. .. .. .. Rate of interest .. .. .. National credit survey .. .. . Warehousing corporation . . Training . . .

.. .. .. .

.. .. . . ..

.. . .. . .

. .

..

.. .

. .. . .

.. .. .. .. .. .. .. .. .. .. ..

..

o .

. ..

.. .. .. .. .. ..

.. .. .. .. .. .. ..

. ..

..

. .

.. .. .. .. .. .. .. .. .. .. ..

. ..

. .

..

.. . ..

.. .. .. ..

..

Financial requirements Land reforms .. . .. Land reforms in West Pakistan Land reforms in East Pakistan

.. ..
.. .. .. .. .. .. ..

.. ..

..

..

.. .. ..
..

182 183 184 189 193-218

CHAPTER 8.--Water and Power

..

..

..

Development problems and possibilities .. East Pakistan .. .. .. The Indus Basin .. .. .. .. Coastal and desert streams region . Progress in the First Plan period .. .. Water .. .. .. Power .. .. Major First Plan projects East Pakistan .. .. .. . West Pakistan .. .. .. . . Summary of First Plan experience .. Second Plan programme . . .. .. .. . Public sector investment .. .. . Private and semi-public sector investment .. Investigations and surveys .. .. . Multipurpose development .. . . Irrigation . . .. .. .. . Drainage. reclamation. and tubewells .. Flood regulation .. .. .. Open canals . . .. .. .. .. Power .. .. .. .. Machinery pools .. .. .. .. .. Dredger fleet .. .. .. . . Atomic energy .. .. .. .. .. Meteorological service .. .. . . Survey of Pakistan .. .. .. .. Requirements of Personnel and key construction materials

.. .. ..

..
.. .. .. .. .. .. ... . . .. .. . . .. .. .. .. . . .. .. .. . .

.. ..

..

.. .. .. . . .. .. . .. .. .. .. .. . .

Achievements since Independence .. . .. Criteria for industrial development in Second Plan period Policies and methods of implementing the industrid programme .. .. .. .. . Cost of the development programme .. .

220 221
223 229

. .

Development plan for selected industries Food. beverage and tobacco manufacturhg Textile manufacturing .. Footwear and apparel . Wood and wood products . h l p . board. paper and paper products Printing. publishing and allied industries bather and leather products Rubber products Chemical and petro-chemical industries Non-metallic mineral products Basic metal industries Metal products industries Jute baling Cotton ginning Filmindustry Sports goods Surgical and other instruments . Agricultural and industrial waste Other products Testing and research Government investment in large scale industries Small and medium scale industries Zxpected results of the industry programme

..

.. . .

..

.. ..

..

.. .. . . .. .. ..

.. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. .. .. .. .. . .. .. .. ..

C ~ ~ T 1 I.F~l R O us e

.. .. .. Second Plan development programme .. Exploration. prospecting. and development Gas .. .. .. .. cod .. .. .. .. Peat .. .. .. .. Iron ore .. .. .. .. Chromite .. .. .. .. Other minerals .. .. .. Role of the private sector .. ..
and Minerals

.. Progress under the First Plan .. Long-term development objectives ..

..

Development of mining personnel

..

Ckwnm 1 . T a p r and Communications 1-rmot

.. Railways .. .. .. Objectives in the Second Plan ..

.. ..

.. . .. .. CHAPTJZR 12.--Housing and Settlements .. .. Performance under the First Plan .. Basic deveIopment .. ..

Works designed to improve movement of t d c Rehabilitation of rolling stock and track Other development Technical personnel Electrification of railways Programme allocations zorts Karachi Port . Chittagong Port Chalna/Mangla Anchorage Policy considerations Plan allocations shipping Second Plan programme &land water transport .Roads . Objectives in the Second Plan Development programme Village and forest roads Xoad transport policy recommendations Development programme . +Civil aviation Ground and navigational facilitie Aircraft and air services Posts. telegraphs. and telephones Propsoals in the Second Plan Postal services . 'Local telephone system Trunlc telephony lntemtional telephony Telegraph services Training . Workshops Broadcasting 1 Tourism Development programme

.. ..

..

.. ..

..

..

.. .. ..

..

..

..

.. .. . .. ..

..

.. ..

. .. ..

. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..

.. .. .. .. ..

. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. . .

.. .. .. ..

.. ..

.. .. .. .. .. . .. ..
..

.. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. ..

.. .. .. . .. .. .. .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..
..

.. .. ..

..

.. ..

..

.. .. ..

.. ..

.. 321-328 .. 321 .. 322

Housing .. . . . Water supply and sewerage The new Capitals and government buildings Development in Special and Frontier.Areas .. Development expenditure .. .

. .. .

.. .. .. ..

..

PART 111.-HU1MAN RESOURCES AND WELFARE

Introduction

..

..

..

..

..

..
.. .. ..

Dimensions of future growth .. Migration and urbanization .. Population problems and population policy Population statistics and analysis .

.. .. ..

..
..

CHAPTER 14..Education

and Training

..

..

.. .. .

Educational development during the First Plan period .. . Commission on National Education Programme for the Second Plan .. .. .. Primary education .. .. .. .. Secondary education .. .. .. .. Teacher education .. .. . .. Technical education .. .. .. .. Industrial training .. . .. .. Commercial education .. .. .. .. Higher education .. .. .. .. University research .. .. .. .. Scholarships .. .. .. .. .. Islamic studies .. .. .. . .. National languages .. .. .. .. Promotion of art. culture and sports .. .. Military training and scouting .. .. . . Education of handicapped children .. .. Adult education .. .. .. .. .. Publicity for national development .. ..

..

Major objectives of the Plan Family planning .. Health facilities in the rural areas Malaria .. .. Tuberculosis .. .

.. .. .. .. ..

..
*.

.. .. ..

.. .. .. ..
. .

small-pox Leprosy Trachoma Mental health Nutrition Health education School health .. Health statistics Medical education Medical research . Hospitals .. Mobile dispensaries Medical stores .. Special and Frontier regions Private sector

.. .. .. .. ..

..

..

.. .. .. .. .. .. .. .. .. . .. .. .. ..

CHAPTER 16..Manpower

and Employment

Manpower plaMing Improvements in manpower planning Use of existing manpower resources Labour standards and administration Wages and social security Labour-managementrelations Programme analysis. labour statistics and research Cost of the programme

..

..
.. ..

CHAPTER.Social 17.

.. .. .. .. Service .. .. .. .. .. Social service during the First Plan Objectives in the Second Plan .. .. Size. priorities. and targets of the programme Training .. .. .. .. Research .. .. .. .. Administration .. .. .. .. Urban community development . .. Medical social work .. .. .. Family and child welfare .. .. .. Youth work and recreational services for children Delinquency and probation .. .. . .. ..

..

.. .. .. .. .. ..

Services for the socially and physically handicapped Grants-in-aid to voluntary agencies .. Legislation . .. Social service expenditures

..

..

CHAPTER 18.--Village AID

.. Progress under the First Plan .. Programme under the Second Plan .. Development expenditure .

..

..

.. .. ..
..

..

Adult literacy and lay leaders training programme . Academies for Village Development .... . Evaluation .. ..

.. .. .. .. .. .. .. ..

.. 393-1963
.. .. ..

..

.. ..
. ..

393 394 394 396 396 396

PART IV.-REGIONAL DEVELOPMENT

CHAPTER 19..Regional

Development

..

..

..
.. . .

397-414 398 402 406 408

Development programme for East Pakistan Development programme for West Pakistan. including Karachi Development programme for Special and Frontier Areas in . West Pakistan . Public sector regional allocations

..

..

..

..

..

.. ..

EXPLANATIONS
1. The Second Five Year Plan covers the period from Jdy 1960 to Juna 1965, inclusive. 2. In Pakistan notations are generally expressed in 'lakhs' and 'crores'; in this publicatioas they are expressed in ' millions '. These and other terms are explained below : Notations One hundred thousand (100,000)=0ne lakh (1,00,000) One million (1,000,OOo) =Ten lakhs (10,00,000) Ten million ( l O , ~ , ~ ) = O n e (1,00,00,000) crore Units o measurement f One maund=82-217 lbs. One bale (cotton)=392 lbs. One bale (jute)=cU#)lbs. Cwrency equivuknts One rupee-lsh. 6d.=U.S. $0.21 One million rupees= Sterling 74,710=U.S. $210,000 Years Calendar year-1 January to 31 December Fiscal year 7 (Example :I 1960-68 means the period covering Jbly 1960 ta Trade year . 1July to 30 June June 1961).
Agriculture year J Before 1959-60 the fiscal year was from 1 April to 31 March. 3. In some of the tables in the Plan figures do not necessarily add up to totals because off rounding. "n. a." indicates "data not available". 4. Administrative units : There are two Provinces, East Pakistan and West Pakistan. For administrative purposa each Province is divided into ' divisions ' which are sub-divided into ' districts'. In East , Pakistan a district is divided into sub-divisions, circles, thanas and villages. In Ws Rakistam et a district is divided into sub-divisions in some cases, tehsils (or talukas) and villages. 5. Abbreviations : Agricultural Development Finance Corporation ADFC Central Statistical Ofc fie CSO Eastern Bengal Railway EBR House Building Finance Corporation HBFC Karachi Development Authority XDA North Western Railway NWR Pakistan International Airlines PLA Pakistan Industrial Credit and Investment Cocporation PICIC Pakistan Industrial Development Corporation PIDC Pakistan Industrial Finance Corporation PIFCO Small Industries Corporation SIC Village Agricultural and Industrial Development Village B f D Water and Power Development Authority WAPDA

..
.. .. ..

.. .. .. .. .. ..
..

..

has been regained under dynamic and determined leadership, to which the people are responding with remarkable fervency and confidence. The economic progress that was initiated from very small beginnings at Independence has acquired form and direction under the experience of the First Five Year Plan; some important economic infra-structure has been built ;managerial and entrepreneurial skills of a fair order have been developed ; and the country's ability to undertake and implement development programmes sf increasing magnitude has been greatly enhanced. Tlze machinery of administration has been refashioned and reinforced at many points. Specialized omm missions have been appointed by the Government to study and inzeke recommendations on crucial aspects of national life, including agriculture, education, medicine and law. Several of these commissions have already reported their findings, and action on their recommendations is well under way. Most importantly, a commission is at present at work to devise a democratic constitution for the country better adapted to the genius of the Finally, there is a growing understanding and appreciation of the "Ogle- lerns and potentialities of Pakistan among the nations of the world, pro n and a visible determination to assist this country i developing its resources and attaining economic independence.
2. These facts offer hope for the future. Nevertheless, past failures in achieving some of the objectives of the First Five Year Plan must provide cause for sobering reflection. There were several reasons for this failure : political instability, absence of sustained endeavour, lack of imaginative approach to organizational problems requiring urgent solutions, and nonobservance of the discipline of the Plan. Yet in explanation it must be remembered that the preparation of the First Plan was not completed until near the middle of the five-year period which it covered, and that it never received formal sanction at the highest levels of the Government, with the result that the vigorous efforts demanded for its implementation were not expended. Furthermore, implementation was hampered by certain uncontrollable factors such as exceptionally unfavourable weather conditjons and serious deterioration in the terms of trade resulting in a substantial reduction of the resources available to the country.

Commission presents the Second Five Year Plan a THE Planningishigh. The momentumofofenthusiasmdaysthe country,atandtime when there a perceptible upsurge in the national spirit is the early of the nation's life

3. No doctrinaire assumptions underlie the Plan, and neither an exclusively capitalist nor an exclusive^^ socialist economy is postulated. The approach throughout is pragmatic. The fundamental problem is how under severely limiting conditions, to find some way towards the liberation of the people from the crushing burden of poverty. Viewed in this context, economlc growth becomes a necessity for sheer survival. The compelling consideration is that the economy must grow at a rate which must be faster than the increase in population ; also, the pace of future growth must be,
M II 2887 (65) P C. .

such as to lead with expedition towards a modernized and self-sustaining economy., The awakening aspirations of the people are exerting strong pressures. on the existing economic and social order ;and no underdeveloped country today can afford to fall behind in the race for progress without incurring the very grave risk of internal disruptioa or external intrusion. Progress must, however, be sought mainly through inducement, less through direction. The creative energies of the people can be best harnessed to the needs of clevdopmqnt if policies of economic liberalism are pursued.
4. Spec&caUy, three dominant strains run through the Plan. First, the stubborn problem of agricultural production-low productivity and inability of the cowtry to feed itsel&-is to be attacked vigorously; the aim is to.achieve a break-through in agriculture. Although this objective will strain the organizational ability of the country to the utmost, its achievement should be within the range of possibility if energetic and sustained efforts are made. Second, the a h is to push ahebd with industrial development by encouraging private enterprise in aU'prabticable ways and by freeing the economy from n superfluous kestraints. Publid policies to this end are recommended i the Plan. Controls wGch have a strangulating effect on private initiative d me'ed to be relaxed, and reflaced progressively by fiscal and monetary measures and operation sf the market mechanism. And third, education at all levels is to be expanded and advanced as fast as the required institutions and personnel can be provided.

5. Development expenditures in the Second Plan are 65 per cent larger than in the First, though in real terms the increase is smaller. It must be emphasized that the resources required for the implementation of the Plan are not fuZ1f in sight. The Plan is based on a dynamic rather than a static ap roach t resour& mobilization. The implementation of the Plan itself o wi generate a substantial part of the required domestic resources, but very determined eEorts will still be needed to increase these resources. The Plan depends heady- sn foreign aid and foreign investment. There is emphasis on increased plrodvction of exportable goods and substitutes for imports, which should have the effect of reducing dependence on foreign aid in the long rup. Conditions for attracting foreign capital to Pakistan are becoming increasingly favourable. Very substantial increase in external assistance will, however, be called for if the requirements of the Plan are to be properly met. The fuU mobilization of internal and external resources, therefore, will be of critical aEporta&e to the implementation of the Plan. To the extent that these resources become available, the Plan will succeed.

fl

'

'

. .

6. The urgency of accelerating the process of growth necessitates a considerable concentration on investments which produce early results. Nevertheless, in a number of ways the Plan represents investment in the future, with benefits m a t u ~ over a period of time. This is notably true of investg d ments in water m power develo2ment projects, in education and research and in measures to regulate population growth. The supply of material goods that can be made available to the people cannot, regrettably,. increase

very substantidy i the Plan period without s ~ ~ ofc investments i n e n development programmes on which future growth depends. A fair increase in goods of mass consumption should, however, occw: more food, more cloth, and some increase ki certain manufactwed goods. The housing difliculties will be eased, but not much. 'Fhe citizen will have more of what is more valuable: improved education and improved health. Op ortunities for em loyment wl increase. Greater activity in agriculture an industry, il partic arly small scale industry, should have the effect of brinafig about a greater diffusion of incomes.

7. The Plan contains a substantial element of flexibility. It is a guide to direction and intensity of eflort, a yard-stick by which programmes can be measured and progress appraised; it is certainly not intended to be h p e r ~ o u to the influences of changing conditions. The essential stipulation s is that the development programmes framed from year to year must be closely related to the Plan, and there must be a lively corzsciousness of the pace and direction of the development effort set in the Plan.

8. As a document the Second Plan is much shorter than tbe First, which dealt at length with basic social and economic problems and policies. It does not seem to be necessary to repeat what was stated in the First Plan but much of it is pertinent to present conditions, and wiU continue to apply in future years. The Second Plan is essentially an operation programme intended to provide a basis for action by the people as well as the Government, who share the responsibility for its successful implementation.

a high order will be needed to meet the challenge of the coming years. Success wl depend o the initiative, vigour and administrative competence which il m the instruments and agencies of the Government, under energetic kadership, are able to develop and apply to the task of mplementation o f ,the Plan. But success will depend much more on the extent to which the mass of the people come to have a passionate awareness sfthe urgency of economic and social progress of their country, and are committed to do their part in a spirit of high dedication.
,a critical stage of its development. Faith, vision and courage of

9. With the commencement of the Plan period, the country will enter

G. BWMED,
June, 1960

Chairman, Planning Commission.