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Punjab the hub of economy

Published on 9th Feb, Edition 6, 2015


Punjab is the most populous province of Pakistan that houses 65% of total population of the country. It is the second largest province in terms of area after Balochistan. The province is bordered by Azad Kashmir to the north-east, the Indian states of Punjab and Rajasthan to the east, Sindh to the south, the province of Balochistan to the southwest, the province of Khyber Pakhtunkhwa to the west, and the Islamabad capital territory to the north. It is the nation’s only province that touches every other province.

The capital and largest city is Lahore and other important cities include Faisalabad, Rawalpindi, Gujranwala, Multan, Sialkot, Bahawalpur, Sargodha, Gujrat, Sheikhupura, Jhelum and Sahiwal. The province is a mainly a fertile region and has Indus River and its many tributaries traverse the Punjab from north to south. The landscape is amongst the most heavily irrigated on earth and canals can be found throughout the province. Weather extremes are notable from the hot and barren south to the cool hills of the north.

In 1947, the Punjab province of British India was divided along religious lines into West Punjab and East Punjab. Western Punjab was assimilated into the new country of Pakistan, while East Punjab became a part of India.

Punjab has the largest economy in Pakistan, contributing most to the national GDP. The province’s economy has quadrupled since 1972. Its share of Pakistan’s GDP was 54.7% in 2000 and 59% as of 2010. It is especially dominant in the service and agriculture sectors of the Pakistan economy. It is also major manpower contributor because it has largest pool of professionals and highly skilled (technically trained) manpower in Pakistan. It is also dominant in the manufacturing sector, though the dominance is not very huge. In 2007, Punjab achieved a growth rate of 7.8% and during the period 2002–03 to 2007–08, its economy grew at a rate of 7% to 8% per annum. During 2008–09 grew at 6% against the total GDP growth of Pakistan at 4%.

Despite lack of a coastline, Punjab is the most industrialized province of Pakistan; its manufacturing industries produce textiles, sports goods, heavy machinery, electrical appliances, surgical instruments, cement, vehicles, auto parts, I.T, metals, sugar mill plants, aircraft, cement plants, agriculture machinery, bicycles and rickshaws, floor coverings, and processed foods.

Despite its tropical wet and dry climate, extensive irrigation makes it a rich agricultural region. Its canal-irrigation system established by the British is the largest in the world. Wheat and cotton are the largest crops. Other crops include rice, sugarcane, millet, corn, oilseeds, pulses, vegetables, and fruits such as kinoo. Livestock and poultry production are also important. Despite past animosities, the rural masses in Punjab’s farms continue to use the Hindu calendar for planting and harvesting.

Punjab contributes about 76% to annual food grain production in the country. Cotton and rice are important crops. They are the cash crops that contribute substantially to the national exchequer. Attaining self-sufficiency in agriculture has shifted the focus of the strategies towards small and medium farming, stress on barani areas, farms-to-market roads, electrification for tube-wells and control of water logging and salinity.


Punjab has nearly 70,000 industrial units. The small and cottage industries are in abundance. There are 40,000 small and cottage industrial units. The number of textile units is 15,000. The ginning industries are 7,000. There are 7,500 units for processing of agricultural raw materials including food and feed industries.

Lahore and Gujranwala Divisions have the largest concentration of small light engineering units. The district of Sialkot excels in sports goods, surgical instruments and cutlery goods.

Punjab is also a mineral-rich province with extensive mineral deposits of coal, iron, gas, crude oil, rock salt (with the second largest salt mine in the world), dolomite, gypsum, and silica-sand. The Punjab Mineral Development Corporation is running over a hundred economically viable projects. Manufacturing includes machine products, cement, plastics, and various other goods.

The incidence of poverty differs between the different regions of Punjab. With Northern and Central Punjab facing much lower levels of poverty than Western and Southern Punjab. Those living in Southern and Western Punjab are also a lot more dependent on agriculture due to lower levels of industrialization in those regions.

As of June 2012, Pakistan’s electricity problems were so severe that violent riots were taking place across Punjab. According to protesters, load shedding was depriving the cities of electricity 20–22 hours a day, causing businesses to go bust and making living extremely hard. Gujranwala, Toba Tek Singh, Faisalabad, Sialkot, Bahawalnagar and communities across Khanewal District saw widespread rioting and violence on Sunday 17 June 2012, with the houses of several members of parliament being attacked as well as the offices of regional energy suppliers Fesco, Gepco and Mepco being ransacked or attacked.
While no one can deny the importance of Punjab, the successive provincial governments have not been able to coupe up with the problems; the rulers have mostly focused large cities that have become a source of discontentment among the residents of other areas. The province has been facing worst energy crisis, prolonged outages of electrify and gas. The energy crisis is the outcome of blatant theft and failure of the distribution companies in recovering outstanding dues. The key contentious problem is failure of tax collection regime in recovering tax on the agriculture income.

Historically, the province has remained dependent of its share in federal revenue. However, after the 18th Amendment in the constitution, the provincial government faces serious liquidity issues. Though, it has been making efforts to negotiate directly with the multilateral donors, paying back even the soft-term loans poses serious threats unless concerted efforts are made to increase collection of tax by the provincial authorities.


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