2.    ECONOMIC STRUCTURE OF THE COUNTRY.

2.1    The economic structure of the country has undergone a structural change since its independence in 1947, Shafi Niaz (1995). Share of agriculture during 1940 was 55% it dropped to 24% 1992. The Gross Domestic Product and per capita income is given in Table-3:

Source:

Economic Survey of Pakistan.

2.2    Contribution of manufacturing sector which was almost nil in 1947 went up to 18.3% in 1992. Industrial base is still narrow and, by far the largest sector is TEXTILES, All industries are becoming progressively more capital intensive; some more than the others. Inspite of this, no matter what the hardship, country must industrialize and widen its industrial base, without it economic take off will never become a reality.

2.3    Agriculture, however, should not be neglected at the cost of industry. In the past there has been a net outflow of capital from agriculture. While industry must command special consideration, agriculture demands healthy investment. If investment in agriculture is neglected at the cost of investments in other directions, country may never become self sufficient in food crops. Cotton is liable to suffer as well which may inflict damage to industry based on cotton and adversely affect balance of payments.

2.4    At present Pakistan is an agricultural rather than an industrial country and there is an upper limit on land holding while there is no restriction on industrial holdings. This needs to be changed and restriction on agricultural land holding removed for the sake of efficiency.

2.5    Those countries of the West which have minimum people working on farms have mountains of agricultural surpluses. In case of most of Third World countries 60-80 percent of the population works on farms. This has got to change. Moreover, size of a farm is important. In Pakistan 7.3 percent of the farms own 40 percent of the land and 93 percent own the remaining 60 percent. This is feudalism at its worst. Table 4 gives the number of farms and their area:

Source: Census of Agriculture, 1990.

2.6    There is a case for agriculture to be treated as an industry and, then farm income to be taxed like any other income.

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