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CHAPTER

1LBSSONS ROMTHE

There has been an essentialcontinuily in theprocessof economicolanning,sincethe inaugura_tion of the First Five-year plan in the late.L950s.This continuity has been maintained despite aseven-year nterregnum during the j.970swhenm"cdrum-term-lanning was abandoned n favourol

Snnualbudgetrng.-Medium-term planningwas

revrvedonce again with the Fifth Five_yeai planin L978. The Sixth plan, which made a decisiveshift to a laissez-fairephilosophy, and now theSeventhFive-Yearplan,

havebeenpreparedasse_quels to previousplans,and exhibit this essentialcontrnurtym approachand policies,despitetheirunique eatures.

2. This continuity has been possiblebecausehe

::lirg,edgeof plannin-g_.hasreverbeen the plan,

but the annual_ public sector developmentprogramme, which is prepared as part of tnebudget,and underwhich th'esizeand compositionof public investmentexpendituresare detelmined.Both.five-yearplansand annualplans,by contrast,are documentsof an advisory riture. .i.o the ex_tent that thsy reflect the economicphilosophyofth: government, however, they' prwide areference point for policy decisions,'which .aretypically taken in the conte:rtof specihc

"ur"r,oo

a varietyof considerations.

- 3. In -keepingwith tradition, the SeventhFive-Year Plan hasbeen formulatedon the basisof anassessmentf the successesnd failuresof the pre_viousfive-year

-plan,and of planningp"rf*-un""rn generat. Although a formal evaluationof the

Sixh Five-Year plan will be conducte{ by thePlanning Commission some time in fOeO,ttrischapter presentsa preliminary assessment.-whichupdateshe mid-plan eviewconductedn fbAZ.

PLANFORMULATION

4. The Fifth plan was formulated at the end of aparticularly-difficult period in pakistan,seconomic

, history., After 25 yelrs of unprecedented rowth,the world economye4perienCed everesh6ck inthe 1970s. Growth ratessloweddown throughoutthe world, inflation rates soared, and countrieslike Pakistanwhich exportedneither crude oil normanufactures xperienced evere inancialdifficul_

tres. For fafista3, the problem was compoundedbyd9m9s-t1cevelopments.The lossof Eastpakis_tan.-in L97L, the sharp slowdown in foreign aidavailability, the new government's nationalizationpolicies, labour un{e_st, nd efforts. to step uppublic investmentwithout parallel efforts to raisedomesticand foreign resources,all contributedtounprecedented economic dislocation and poorecOnomic erformance

'

5:_By he time martial law was imposed n July1977, he €conomy had been bankrupt for some

trme. At the end of June t977,for the first time inthe.history of Pakistan,net foreign assetsof the9an!r18^ ystemwere negariveUfns 566 million(or US$ 57 million). tnlllO-lli Athough rhe in_vestment ate had risen to L9.3per cenf of GDpand the surplus on the consbfidated revenuobudget o Rs 1.7 billion, the deficit on the currenraccount of the balance of paymentswas aboveUS$ 1 biljion (or 6.7per ceoiof GNp); rhe rateofgrofih of GDP had fallen to 2.g per Cent,so thatper capita GDP growth had been negative;whileconsumerpriceshad risenby 11.gper cent.

6..1n L977-78, he last year of the Non-planperiod, a number of meisures were taken torev-ersereviouspoliciesand restore inancial dis_crplrne. The Fifth Five_year plan (197g_g3)was

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2 . LESSONSFROM THE SIXTH FIVE-YEAR PLAN '(ClI-l)

alsoformulated n that year' To meet the critical

shortage of foreigrr exchange-resources' nd to

financ6 he plan, t wasdecided o seek oreignas'

sistanceon- a large-scale rom the International

Monetary Fund (IMF) and the World Bank

(WB). -In November 1980, Pakistan sought-athree-year arrangcment with the [MF, under

which the IMF provided SpecialDrawing-Rights(SDR) 1,079 million over a two-and'a'half year

oeriod endingNovember1983. As a rsflectionon

ih" poot crJditworthinessof Pakistan,however,

the World Bank did not lend to Pakistan or four

yearsuntil 1981-82, uring which.period oly l1-

iernational DevelopmentAssociation IDA) lend'

ing ook place.

l. The Fifth Plan consolidated nvestment and

growth, brought down the rate of inflation, andiestored domesticand external financial stability'

Although nst foreign assetsof the bankingsystem

turned negativeagain n 198L-82 ue to adverse

balanceof payments evelopments,heywereposi-

tive throughout the plan period and by its end

stoodat R;6,518 million (or US$5l l million). In

1982-83,he deficit on the current accountof the

balanceof paymontshad fallen to US$ 558million(or 1.8 per cent of GNP); the investment ate, to

I7.4 pei cent of GDP; but the rate of growth of

GDP had risen to 6.7 pet ccnt; while the risE in

consumerpriceshad sloweddown to4.2 per cent.

8. The major weakness of the Fifth Plan,

however,was- ts excessive eliance on non-bank

domesticborrowing to balancethe budget,while

allowing a rapid growth of current expenditures,

especiallyon defence;as a result, in 1982'83,-thesuiplus

'onthe consolidated revenue pudggt

turned into a small deficit, for the first time in

Pakistan'shistory. Non'bank borrowing durinq

the Fifth Planwas targetedat Rs 19'4billion' 21.7

pcr cent of the overallbudgetarydeficit of Rs 89.2

bittion. In fact,'non-bank orrowingreachedRszl0 billion, or 31 per cent of the overall deficit.

Compared o the Non'Plan period (1"972-78),on-

bank-borrowing hus ncrEased harply rom about

Rs 20 bitlion to Rs 210 illion, a trend whichwas o

be greatly exaggeratedduring the Sixth Plan

period.

9. It was n this context that the Sixth Five'Year

Plan was formulated. With the restorationof ex-

tprnal financialviability it was felt that a major ef'

fort was needed o mobilize foreign assistancen

support of an ambitiousdevelopmeqtprogtamme.Aiiordingly, the SixthFive-YearPlahpresentcda

bold and comprehensive evelopmeritprogramme

within the contextof a well articuldtedeconomicpolicy framework' It spoke of combining rapid

iconomic growth,basedon a greatlystrengthened

and diverslfiedproduction base,with the demands

of social ustice.

10. The aim was rapid and oquitable develop-

ment of the country, to help the poor cmerge

from their poverty and to enable them to earDor

obtain the-necesiities

of life through a decisive

breakthrough in the provision of physical in'

frastructure and social services o the rural areas.

The emphasiswas on nutrition, housing water

and saniiation and especiallyeducation and health

to increasehumanresourceproductivityand to es'

tablishequalityof opportunity. In the contextof a

basic ecrinomic ramework, he Sixth Plan aimed

at:

- Maiutaining he growthmomentum;- Strengtheninghe diminishing nfrastructure;- Investlngn human esourcedevelopment;- Developing he cultural heritage;and- Providing

-basicnecessitiesof life to the

people.

11..Within theseoverall objectives,a sigrificant

boost was given to social sector programmesof

the Sirth PIan, especially hose designed or the'

rural areas,by the inaugurationof the Prine Mini'

ster'sFive-PointProgrimme (1986-90), oonafterthe formation of an elected government on

JanuaryL, 1986. The major emphasis f the Five-

Point Programme was on economic uplift and

developmJntof rural areasand rural communities

in ordir to make up for the neglectof thE past;

basic amenitiesand services equired in the vil-

laseswere to be provided under the Programme.

with the dissoluti6nof the NationalAssemblyand

the governmenton May 29,1988,!h: projectsand

oroirammes under the Five-Point Programme

[anE Ueenmerged n the SeventhFive-YearPlan.

BASICECONOMIC FRAMEWORK

1.2. n assessinghe successes nd failures of

planned development, he Sixth Plan concluded

hrst, that eeonomicgrowth had becomea regular

feature of the economy,so that economlcpollcy-

should concern itself with the composition gf

growth which would be most apt for the achieve-

irent of its distributional and socio'economic

goals; while ensuring hat the gr-owthmomentum

fras maintainedl an-d second, that given sound

economicmanagement' nd'dpmestig slqbility'

high periods of growth werc associatedwith em'pliasii on agriculture and.a qonstructivepartner'

shipbetweenpublic andprivate sectors.

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BASIC ECONOMIC FRAMEWORK. 3

t3. Accordingly, he gowth strategrof the SixthPlan relied on a fertilizer,waterand farm-technol-ogy basedglowth in small farm production,bothfor e4ports (of wheat, rice, fruitq vegetables,fiowers, poultry and meat) and for import sub-stitution (in oilseedsand dairy products);.a rapiddevelopmentof steel-barsdsngineering ndustry,modernizationof texiles and food processing; nda balanced development of services,especially inthe public sector. It also spoke of 'a new com-pact'between the privateand public sector,basedon deregulatioryof direct measuresor the allevia-tion of poverty,especiallyn the rural areas;of anincomeand employmentpolicy;of provisionof op-portunitiesfor women;and of 'safetynets' for thepoor.

14.To achieve ts physical argets, he Sixth Planfigured on an averageannualGDP growth targetof 6.5 per crnt,.led by growth in minor crops (?

per cent per year) and in large-scalendustry (L0per cent per year). To achieve his growth, fixedinvestmentasa ratio of GNP was o rise from 13.4per cent to L7.4per cent; the private sector con-tribr,rting42.6 per cenl (or Rs 200 billion, at cur-rent prices) over the five years; while nationalsavingswere to finance84.6per cent of total in-vestment.

L5. On the basisof preliminarydata for 1-987-88,it is expected hat an overall GDP growth rate of6.6 per cent is likely to be achieved, he sameas

during the Fifth Plan period, but its composirionwould be very different from what was planned:minor crops are expected o grow by only 3.6 percent per year; large-scalemanufacturing,by only7.5 per cent per year (see StatisticalAppendixTable 1.1). From L982-83 o 1987-88,ixed invest-ment as a ratio of GNP would rise from 14 percent to I4.4 per cent; the privatesectorcontribut-ing 41..2 er cent over the five yearsor Rs 169.7billion, at current prices; while national savingswould have inanced77.9per cent of total invest-ment.

L6. In terms of plan formulation, perhaps themost serious criticism of the Sixth Plan can bemade in terms of its size, compositionand finan-cial plan. [n retrospect,t seems minently learthat the viability in enernal financesgainedby thelast year of the Fifth Plan was extremely ragile,and the incipient budgetarycrisishad revealed t-self in a revenuedeficit for the first time. In theabsenceof concrete meaqures or-budgetaryreform, therefore,an increase n planned outlaysof, 58 per cent in real terms (or 117 per cent innominal terms) seemsexcessiven hindsight. At

the samc ime, the languageof the Sixh Planwasnot adequately eflected n sectoralallocationsofpublic sectordevelopmentoutlay:over half the in-crease n Sixh Plan allocationsover the Fifth plaqwent to energy;over 75 per cent, to cnergy, rriga-tion & drainage, and transport & communiia-tions; education, health and population welfarereceived

only about L6per

cent (Table 1.1).

Table1.1

SECTOR SHARES OF INCREMENTALALLOCATIONS

TO PUBLIC SECTOR DEVELOPMENTPROGRAMME IN THE

SIXTH FIVE.YE""R PLAN

(Current billion Rs)

Incremental

(Rs.bln)

Allocation

(vo)

Agriculture . 6.1Fenilizer ubsidy 8.8Water 15.8Energr 38.8Industry 25.4Minerals 0.4Transport &Comrnunications35.2PhysicalPlanning&

6.3.5.8

16.3Tt.74.95.4

22.3

I{ousingEducationHealthPopulationWelfareOther Programmes .3 2.36.5

'lbtal(Gross'*) 152.6 305.0 152.4

' InctudesRs 1.02billion for Manpower.*' Total excludesSpecial. evelopmentProgramme

(Rs.600million in tbe Fifth Plan and

Rs. 15billion in the SixthPlan)and a planned

operationalshortfall of Rs. 30 billion in the

Sixth Plan.

L7.By far the mostseriousweakness f the SinhPlan wasthe absence f any concreteplan for ex-

penditure control or domestic resourcemobiliza-iion, designedas t was or a major effort to mobi-lize foreign assistance.The Sixh Plan laid theblamefor the financial difficultieswhich emergedover the Fifth Plan period Very argelyoh externalpressures (high energy and fertilizer prices,together with low cotton and rice prices); al-though it cited the burden of subsidiesand therise in non-development xpenditures,t explainedthe latter by the need to pay higher wages n thewakeof rising food pfices. As a result,despiteagood analysisof the birdgetarysituation, he Sixth

Plan's iscalstrategyassumed way he problem:

Fifth sixth

Plan Plan

4 .1-3.8

10.75r.0:3.23.5

14.6

6.5 4.314.3 9.38.4 5.5

r. 7 1.14.2 2.9

9.0.5.6

4.6

0.6

L2:43.0

32.r116.520.55.8

57.5

15.519.9'13.0

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4 . LESSONSIIROM THE SIXTH FTVE-YEAR PLAN - (CH.l)

"It is assumed hat at least changessufficient

to avoid deficit emerging in the revenuebudget would be made in the Sixth Plan; asmall surplus on revenue account is assumedto be generated o finance the Sixth Plan."(SixthPlan,page63.)

18. In the event, compared to an assumedrevenue surplus of Rs 50 billion over the SixthPlanperiod, a deficit of around Rs 36 billion is ex-pected: a swing of over Rs 92 billion in real terms(Table 8.1). Similarly, the Sixth Plan?sexpecta-tions of a substantial strengthening of external

financesalso did not materialize due to a substan-tial shortfall in remittances, although averagean-nual export growth, planned at 8.5per cent, is like-ly to averagg10.4 per cent; the current accountdeficit, planrred at 2.8 p:: cent of GNP, would

reach 3 per cent; and net capital flows, planned atUS$ 4.5 billion, would be only US$ 3 billion. Al-

thoughbelow the ambitious targetsset in the SixthPlan, private investment activity has witnessedamajor boom n the SixthPlanperiod.

, Table 12

FINANCING THE BUDGETARY. DEVELOPMENTPROGRAMME

(NetBasis*)

(At 1987-88 onstantbillion Rs)

the deficit on the consolidated revenue budget, atRs 54 billion (or 7.9 per cent of GDP); the invest-ment rate, at 15.8 per cent of GNP; plfe

Fa\eof

gowth of GDP, at 5.8 per cent; and'the ratp ofconsumerprice inflation, at 6.0 per cent. It;6 thissituation which explains the attention given to

plan finanting in the SeventhPlan.

MAINTAINING THE GROWTH MOMENTUM

20. The Sixth Plan's socio-economicobjectiveswere to be attained by redistributing the berrefitsof high growth. This growth was to be obtainedprimarily from agricultureand rural development,industry and minerals. At the same time, theSixth Plan spoke of Baluchistan as 'the newagtarian rontier' and resolved o extend he fron-

tiOrsof developmento includethe SpecialAreas:

Federally Administered Tribal Areas, (FATA),Northern Areas, (FANA), and Azad Jammu &Kashmir, AJK).

AGRICULTURE

2L. ln agriculture, the theme of the Sixth Planwas to move from self-sufficiencyo export. TheSixth PIan giowth strategywas basedon a majorbreakthrough n agricultural production throughvertical mprovementparticularly on the smallandmedium-sizearms. The strategywas:

- to increase yields through use of moderntechnologyand balancedand timely applica-tion of inputs (chemical ertilizers,pesticides,improvedseed) besidesprovision of agricul-tural credit for the purchase f these nputs;

- to utilize water efficiently by improvement non-farm water managementhrough organiz-ing and training farmers in its effective use;

- to encourage intensive farming on mediumand small size farms through the use of small

tractorsand small arm machinery;

- to modernize the extensionservices n thepublic seclor and to combine thern with

. private sectorcompaniesengagedn market-ing inputs;

- to diversi$ agriculture by extending the sys-tem of support prices to new high valuocrops and to encourage rop/cattle nsurancebesides introducing innovative agriculturalloan programmessuch as supervisedcreditandgroup loans;

- to develop hebarani(rainfed) areas;

Fifth

Plan

SixthPlan

+

Targct Actual-

1,.OverallDeficitof which:-BDP=

2. FinancingNon-BankBorrowingBank BorrowingFxternal Resources Net)

MemoAs a per centof GDP

Govcrnment InvestmentOverall FiscalDeficit

728.9

t79.0

160.1

250.3

216-0

218.0

rn.t61.647.3

7.27.8

5t.447.06t.7

. 8.35.3

40.04t.4n.5

8.76.3

Amonization of foreign loansappearsunder'financing'and snot included n the 'deficit' figures.Bascdon prelimenaryestimates.

= Budget-FinanceDevelopment Programme.

19. On the basis of present expectations, here-fore, at the end of the Sixh Plan the net foreignassetsof the banking systemwould be negative ata record figure of around Rs 20 billion (or over $1 billion). In L987-88,he deficit on the current

account of the balance of payments s estimatedata little over $ L.0 billion (or 2.5 per cent of GNP);

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I\,IAINTAINING lHE CROWIH MOMEr\TUM - 5

- to expand he export markets or wheatandrice as well as for fruits, flowers,poultry anclmeat;and

- to expand domcstic oilseeds, particularlysoyabeanproduction and freeze ihe size oithe edibleoil deficit.

22. The minor crops,as a result of this strategy,were sxpectedto grow at a faster rate than the

ryajo1- 1oq1. The growrh in major crops, cliringthe Sixth Plan averaged2.3 per ccnt itarget 3.6per cent) compared o 3.6per cent (target7.0 percent) n minor crops. It now appears hlt thc iar-get. or minor crops particularlyof vegetablcs ndspices,and of non-traditionaJ'oilseertsad beenpitched too high. Consequenilynsteadof 4.9 percent growth targetedfor agriculture, he achieve-ment n thesectorwas.3.8 er cent Statistical ,p-

pendixTablcs1".1nd 1.2).

23. Although weather conditions affccted theyicld of crops, there was an imprcssivc mprovc-ment in the productionof cotton and whcatdueto increased seof inputsanddevelopment f ap-propriate technologyncludingnew varieties. Cot-ton yields increased rom 364 kg per hectare in1982-83 o 591" g per hectare n L987-88, nd ofwheat from L,678kg per hectare n 1982-83 o'1,707

kg per hectare n 1986-87. Crop yields nthebarani ract improved. Crop prpduction cch-nology for increasingproduction of barani areaswas transmitted to lhe farmers through agenciessuch as Agency for Barani Areas Development(ABAD) andCholistanDevelopmenr uthoiir.y.

24. There were also impressive increases npoultryand poultryproducti whichhelped o sra-bilizemeatprices. Besides, n mportantdevelop-ment in the private sector was packaging andmarketingof milk and orher dairy proctults**ti"timproved availability in the urban centres andreduced the wide margin in milk prices betweenthe surplusand deficit areas.

25. The offtake of fertilizer went up trom 1,244thousandonnes n 1982-83o 1,750Lousandon-nes n 1987-{J8t an annual growth rdte of over7per centalthough he targetof 1,828housandon-nes was not met (StatisricalAppendix Table t.2).The targets of seed distribution, mechanization,tractors gnd plant protcction coveragealso couldnot be achieved;neitherwere small tiactors intro-duced on the small and medium farms where thepreference nsteadwas o hire largesized ractors,nor was their suitability established. Agricultural

credit disbursed,however, ncreased rom Rs 6.3

billion to Rs 18 billion and supervisctlcredit wasextendedto ensure its propei utilization by thesmall farmerswho were also providect he ficilityof cost roe oans.

26. lJnder the On-Farm Watcr ManagcmenrProgramme9,559 water courseswcre improvc<Iagainst he targot of 9,700 and as such aihieve_mcnt was almost 100 per cent; water losseswercreduced hcreby ncreasing vailabiliry. Thc or.ganization f farmcrs nto a WaterUsersAssocia_tion facilitatcdcollective crionby them ro obtainothcr inpuLs. The agriculture ancl irrigationdepartmcnts, owever,are not working in coor_dination, s ar as hisprogrammesconierned.

27. Agricultural extensionmadc headway; theTraining& Visit (1'&V) agricultural xtension vs_tem was cxtended rom firrcdistricts n Sind and

Punjab o covcral l districts n theseprovinccs;thas also been introduccd n Baluchistan. pes-ticides and fcrtilizer manulacturingcompanicsalsoprovidcdoxtension erviceso flrmers n thcprivatcsector.

28.Somcmajorpolicydecisionswcre takcn withfar-reachingmpact. Whcat and flour/altu wcrcderationed o encouragcmarkct tbrces o cletcr-mingr rices. Also [hc-monopolyprocuremcnl. fbasmati ice wasstoppods<l hat the publicscctorcompcteswith the privatc seetor; in ordcr toliborate the cane gruvers from lhc yoko

of thesugarmills,sugarcane asdczoned. Thc supportprices tbr most agriculturalproductshave becngradually lignedwith bordcr priccsand subsidiesfor fertilizer arxl public mcchanization erviccshavebecn reduced. Howcvcr,no newcropswcrebrought within the purview of the pricc-supportprogramme. uring heSixthPlan,as hadbeenen-visaged. lso, crop and cattle nsurancowcre notintroduced.

RURAL DEVELOPMENT

29. The agriculturalstratcgyof rhc Sixth planwas o servcas the basis or a rural devclopmentprogramme dcsigned o alleviatepoverty n therural areas. In the Fifth PIan rural dcvelopmentefforts were undertakcnboth as pa.rtol overallsectorprogrammes nd as ntegrated rogrammcsexecutedby district/rwrkaz councilsand provin-cial rural development localgovernmcnt cparr-ments. Thc Sixh Plan continued with this ap-proach, but gave greater emphasis to localprojectsbasedon felt needs. An innovation. asthe attempt to havs District Plans prepared .by

local councils for submission to provinciilauthoritics. , ''

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6 . LESSONSFROM TI{E SIXTH FIVE.YEAR PI,AN .

30. The inauguration of the Prime Minister's

Five-PointProgramme n 1986gavean additional

boost to rural developmentefforts. Reflecting n-

creased inancial allocations, ural road construc-

tion exceededSixth Plan targetsby 49 per cent.

Progress n other areas,however,fell much be-hind targets:only LL,800villageswere.electrified(target 4,000); only 1,803 Basic Health Units(BHUs) and "194Rural Health Centres (RHCs)

were constructed (targets: 2,600 and 355); only

12.7million people were providedwith safe drink-

ing water (target L8 million), and only 3.1, nillion

were provided with sanitation acilities(target 4.5

million). There was little progress n improving

literary in rural areas. Finally, the role of local in-

stitutions in participative planning did not come

up to expectations.

INDUSTRY

31. The industrial strateg5i f the Sixth Plan in-

cluded:- Priority to steel-based ngineeringand mod-

ernizationof textile ndustry;

- Investment in processing ndustries for ex-port markets,specially or processing gricul-

tural surpluses;

- Progressiveassembly and manufacture of

tractors and, other agricultural implements;and

- Balanced developmentof service industriesparticularly public services o satisfyhumanneeds.

32. Structural adjustmentwas to be the kei ele-ment in the Sixth Plan. The major policy thrustsidentified were: encouragemento the privatesec-

tor, move owardsderegulation,provisionof an ef-

ficient package or the small-scale ector and en-

couragemento foreign private investment or ab-sorption of new technology.

'33.The manufacturing ector,asa whole,was ex-pected to grow annually at 9.3 per cent (large-

scale10 per cent, small-scale .3 per cent). The

achievement,however, was "1.7per cent (large-

scale7.5 per cent, small-scale .4 per cent). Thegrowth of the small-scale ectQr,however, s con-jectural (due to absenceof reliable statistics); hegrowth target in large-scalemanufacturing was

not achieved.

34. Private nvestmentof Rs 24.4billion in agro-industries and small-scale rural industries ex-

ceeded he Sixth Plan target of Rs 13.4billion; in

textiles, he investmentwas Rs 13.8billion against

the target of Rs 1"2.8billion, but ther'e we-re

shortfalls in basic metal and engineering in-

dustries. In the caseof the latter, only 67 per cent

of the SixthPlan targetwas achieved. Substantialshortfalls occurred 1n petrochemicals and fer-

tilizers(StatisticalAppendixTable 1.3).

35. Major policy initiatives that were taken

during the SixthPlan werea departqre rom an ex-

tensivelyegulated egine to a comprehensive up-

porting packageof deregulation,disinvestmentnpublic enterprises, aising" f the investmentsanc-

tion limit for non-specifiedndustries, eduction n

ths number of specified industries to only five,

lowering of tariffs on imported raw materials, n-

termediateand capitalgoods,and liberal credit tothe private sector.

36. Thesepolicy measures ushedprivate invest-

ment upwards,particularly n large-scalemanufac-

turing,which ncreased rom Rs 4.1 billion in 1982-

83 to Rs 11.8billion in 1987-88, yearlygrowth of23.7 per cent in current prices and of L6-6per

cent in 1987-88prices. The total private invest-

ment n large-scalemanufacturingduring the Sixth

Plan period wasRs 45 billion against he target of

Rs 50billion

3?. The investment,however,did not follow thepiiorities stipulated n the Sixh Plan, or in the [n-

dustrial Policy later announced,of diversificationtorvards capital goods production and regional

development. The investmentwas in import sub-

stitution and consumergoods industrieswhich

enjoyprotection, ather than n export-orientedn-

dustries or those located in the less developedregionsof the country.

38. The developmentof progressivemanufactur-

ing programmes was quite commendable.

However,progressivqmanufactureof more sophis-ticated and precision temssuchas engines, rans-mission equipment,etc. made no progressduring

the SixthPlanperiod.

MINERALS

39. The major objectivesof the SixthPlan in themineralssectorwas to accelerateexplorationand

development, o substitute for import needs of

agricultureand manufacturing especially he coaland iron ore needs of PakistanSteel Mills Cor-poration [PASMIC]), and promote exports. Ex-

ploration made little headway during the SixthPlan period and also major projects sxch asLakhri Coal for power generation (Sind), Gyp-

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STRENGTHENING TIiE DIMINISHING INFRASTRUCI'URE - 7

sum Mining Development (Punjab), LagarbanPhosphate Rock Mining and Development(NWFP), and Nokkundi lron Ore (Baluchistan)werenot initiated.

BALUCHISTAN

40. The SixthPlan noted that physicaland socialinfrastructure in Baluchistan agged well behindnational averagesand proposed the developmentof agricultureand water, energy,ransport& com-munications, health & education,physical plan-ning & housing,mining & industry n that order inten gror\4h points: Kohlu, Jhal Magri, KakarKhurasan and Loeband,Toba Kakri, Dcra Bugti,Katmandai, Jhal Jhao, Musa Khel, Chagai, andMashkhel.

4L. Special allocationswere made n the provin-

cial annual developmentprogrammesand neces-sary administrativemachincry was set up for theimplementationof physicaland social infrastruc-turg programmesn theseareas.The programmeswhich were undertaken for the uplift of theseregions ncluded:groundwater development;ur-vey for exploration of minerals;completionof in-dustrial estates and construction of housingschemes; mprovement of 5,360 km of shingleroad; use of water from Haingole river in JhalJhao area for irrigation; implementationof BaladProject for agricultural development n Ormara(Dasht area in Mekran); and developmentofblack topped road of 4L0km in Chagaidistrict forexploration f minerals.

42. Similarly, oint ventures or mining.and efin-ing of minerals were also undertaken. Mineralslike on1x,barite, and chromitewere proved n theprovinceand the production of onyx increased o28,000onsper year.

SPECIAL AREAS

43. The Special Areas consistof the Federally

AdministeredTribal Areas (FATA) and NorthennAreas (FANA), and Azad Jammu and Kashmir(AJK). Like Baluchistan, heseareasare charac-terized by a paucity of physical and social in-frastrueture. The Sixth Plan, recognizingtheirstrategic mportanceand backwardness, roposeda multi-sectoral nvestmentprogramme for theirdevelopment.

zl4.The major achievement uring the Sixth Planperiod was the completion of an irrigationscheme,namely Penjari-Kha{ irrigation scheme,

whichprovided9,700acresof additional and with

irrigation. In addition a ournb", of tubewellsweresunk in Azad Jammu and Kashmir and FATAareas for irrigation purposes. About 28 smallhydel schemes/stations were completed in theSpecialAreas. More than 300,000 quare eet ofoffice buildings and 1,0,000quare eet of residen-tial accommodationwere completed. In the

transport and communications ector,besides hecompletion of a number of strategic/link roads,over 3,500 km of new roads were constructed.However, he private sector remained shy and in-dustrywasnot forthcoming

STRENGTHENING THE DIMINISHINGINFRASTRUCTURE

45. Other than maintaining the growth momen-tum, efforts in the Sixth PIanwere to be directedtowards strengthening he diminishing infrastruc-

ture. This was o be doneby improvingsourcesofenergy,reducing losses n transmissionand dis-tribution, and through greater equity in distribu-tion of energy. A networkof roadswasenvisaged,besidcs mprovement n the efficiency and qualityof servicesof the railways, mprovement n urbantransport with bulk of investment n the privatesector,provisionof adequate nfrastructureat air-ports, and a quantum jump in telephone andtelecommunication acilities. Water availabilityfor irrigation was to be improved through exten-'sion of the irrigation and drainagesystems,and;the protectionof fertile lands from'waterloggiDEand salinity. To take care of the depleting in-frastructure, the share of allocations to energy,transport & communicationsand water sectorswas raised from 58.7per cent in the Fifth Plan to67.6per cent n the SixthPlan.

ENERGY

46. During the Fifth Plan the growth in energyconsumptionwas about L.4 times faster than thegrowth in real GDP and hence one of the majorobjectives f the Sixh Plan was to bring down the

elasticity of energy demand. The strategydesigned ncluded using energy efficiently, mini-mizjng dependence on imports, preparing theground for growing self-reliance,developing n-digenous esources or energy and searching orundiscovered resources; and most importantlyrural electrification.

47.The major policieswere to induct the privatesectorby evcl'.'ing uitablemechanismsor greaterparticipation of the private sector to meet thecountrfs energy equirements,o rationalizeener-

g5r rices,and to conserve nd useenergJi fficient-

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8 - LESSONSFROM THE STXTH FM-YEAR PI-AN - (CH-l)

ly throughprice and non-price nstruments.

4t|. Electricity generation ncreasedannually at13.6per cent; coal production at L1.8per cent;petroleum, oil and lubricant (POL) products, at

8.5 per cent; and natural gas at 6.5 per cent,during the SixthPlanperiod..

49. One of the major successes f the SixthPlanwas that on the supply side,both commercialandnon-cornmercial nergl increased rom about28.3million ton oil equivalent MTOE) to 36.1MTOEi.e.,an increaseof.Z7.6 er cent. Increasesn caseof oil and gas were not only impressivebut ex-ceededall expectations; gainst he Sixh Plan tar-get of 21,,000 arrels, production in 1987-88wasabout 43,000barrels (Statistical Appendix Tablc1.4). This achievementwas a consequence f thegovernmentpolicy of assigning larger role to theprivate sector which could bring with it {inances,manpower and institutional capability; attractiveproducer prices also helped to attract foreign in-vestment.

50. On average, 7 wells were drilled annuallybythe privatesectoras against he targetof 31. TheOil and Gas DevelopmentCorporation (OGDC)also drilled 20 wells annuallyagainst heir targetof L9. Productioh of gas ncreasedby 33 per centduring the Sixth Plan period from 95L million

cubic feet per day (MMCFD) to t,264 MMCFD(StatisticalAppendix Table 1".4).Besides, ew gasreserveswere discoveredand appraisalof someofthe previously discovered fields resulted in in-crease n availabilityof gas eserves.

.5L.Despite significant effort and investment oimplement he constructionof a largepower plantbased on Lakhra coal, actual achievementhasbeen short of expectations, rimarily because heextraction cost of coal turned out to be higher

than required for establishing the economicviability of a large coal $red plant and non-exist-enceof adequate oal resbrves t Duki. Neverthe-less,a modestbeginninghas beenmadeby initiat-ing smaller coal fired plants, based on fluidizedbed technology, oth in the privateand public sec-tors. Reserveswere dentified and major depositswere ound n the Sonda-Thatta reas.

52. The Sixth Plan succeededn making modestprogress in the overall energy sector in thecountry particularly in losses rom 29.7 per centto 23.0per cenf: Besidesstrengtheningof trans-mission, distribution and grid stationssystemsnthe country, a large number of rural areaswere

provided with electricity. During the Sixth Planabout 2.3 million new consumerswere addedagainstL.8million during the Fifth Plan.

53. Constructionof a heavyelectrical plant was

also initiated to reduce the imports of heavyandlight electrical equipment. However, delaysoc-curred in commissioning some major powerprojectsso that 2,0L8MW insteadof the targeted3,795 MW were added in the Water & PowerDevelopment Authority (WAPDA) and theKarachi Electric Supply Corporation (KESC) sys-tems. Per capitaelectricitydeliveredwas hus 233KWH against he target of.253 KWH (StatisticalAppendix Table L.4), a shortfall of 8 per centonlywhich would havebeen much higher but for thedevelopmentsn other energysub-sectors.

54.The patternof energyconsumptionwitnessed- a change n the direction required as sharesof in-

dustry and agriculture in total sonsumption n-creased rom 28.4 per cent and 3.5 per cent to32.3 per cent and 6.3 per cent respestively; heshareof domestic onsumption eclined rom €.7per csnt in 1982-83o 45.3per ccnt in 1987-88.

TRANSPORT& COMMUNICATIONS

55.The plan addressedtself mainlyto rehabilita-tion and optimal utilization of existing capacity,

improvement n raiVroad traffic ratio to reducethe strain on the existingroad network, rationalpricing policiesand costrecovery,nduction of theprivate sector and financing by public corpora-tions.

56. A beginning was made by converting theTclegraph& Telephone T&T) Department ntoa self-financingcorporation to meet the financialand other requirements f the pending demandfor telephoneconnectionsand telecommunicationfacilities. Besides,some major railway pr<rjects

were completed and roads and highways con-structed. Major work on Port Qasim was.com-pleted and work on the Gwadar Fish Harbourtakenup.

57. Since the programme was mainly rehabilita-tion oriented, n. overall erms there was no sig-nificant increase n transport capacity as a resultof the projects executed during the Sixth Planperiod. One of the principal problems faced inproject execution,however,was the lack of ade-quate physical implementation capability andproper quality control resulting in unsatisfactoryprogressand quality of. constructionon a numberof projects.

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II.IVESTINC N HUMAN RESOURCEDEVELOPMENT 9

58. The Sixh Plan envisaged improvement inraiVroad traffic ratio of.25275n 1982-83 o Il:71in 1987-88. However, actual raiVroad ratio by theend of the Sfuth Plan was 20:80. nail traffii didnot increase primarily due to operational inef-ficiEncies. Thus, there wasan increasingstrain onthe road system,particularly along the north-southcoridor. (National Highway N-5). The diversionof long-haul freight traffic to the relativ-elyun-economical mode of transport by road involvedextracost and therefore a net lossto the economy.

59. In the air transport sector, the trafficachievedby PakistanInternational Airlines (PId,)qas 90 per cent of the plan target and the portsalso handled a larger volume of traffic. However,induction of the private sector in roads, airline,telegraph & telephone and shipping sub-sectorsdid not materialize. Targets and aqhievementsduring the Sixh Plan are at Statistical Appendix

Table L.5.

IRRIGATION & DRAINAGE

60. The agriculture resourcEbasewas expandedduriog the Si{l PIan period. An additional areaof 3.1 million acres wascropped against he targetof. 3.24 million acres due to additional wateravailability which increased from 101.5 miltion'acre feet (MAF) to LL2.2MAF at farm level main-ly becausjlof better managemenrn the deliverysystem. This was an increaseof almost 10.5per

cent from successful programmes of canal anddrain rehabilitation besides the On-Farm WaterMirnagement Programme which emphasized im-ptovement and lining of water courses,precisionland levelling formation of Water Users Associa-tion and training of farmers.

61. The e4penditure on the On-Farm WaterManagementProgramme.exceededhe target by35 per cent although expenditures ell short of theallocation in all sub-sectorsncluding drainage, r-rigation and flood protection. The ChashmaRight Bank Phase I was commissionedand the

long overdueHub and Khanpur Dams were com-pleted. Fertile lands were protectedfrom water-logging and salinity and 3.37million acresof dis-aster area were protected. The achievementex-ceeded he target of 2.8 million acres by 20 percent primarily because he policy was to focus at-tention on the areas worst affected by waterlog-.eing and salinity rather than on grois affectJdarea StatisticalAppendix Table 1.6).

62. Considerableprogresswas madeduring theSixth Plan period to overcome he problemJdue

to shortageof water but there were shortcominssalso. Despite an increase of 2 MAF in wateravailability from lining of water courses,a sy$temhas not yet evolved on how to maintain thesewater courses. Also projects in all provincescould not be taken up and remained penaing be-cause the issue of water distribution was notresolved at the national

level and substantialamount of surface water flowed unused into the' s e a .

63: After completion of the Tarbela reservoir, nonew reservoir was constructed to take care of thegradually depleting storage capacity. The ex-perience gained from completion of Hub, Khan-pur and other small dams ndicated grossdeficien-cies n desrgnand expertise;shortageof funds wasresponsible or non-achievementof the flood con-trol targets or the Sixth Plan:against he targetof25,000 tubewells in the private sector and 744

tubewells n the public sectors,719 tubewellswereinstalled in the public sector and 100per cent ofthe target in the private sector was met.

SCIENCE& TECHNOLOGY

64. Innovatively, the Sixh PIan addressed thedebilitating weakness n science and technologlcapacityof the country,and proposed he settingup of a number of institutions with appropriatefunds,so that a firm foothold could be acquiied nthe emerging echnologies:micro-electronics, io-

technology, lasers, computers, renewable energysources, ibre optics, and nuclearand space ech-nologies.Given the enormityof the task,especial-ly in the light of generally poor educationalltand-ards, the main achievementduring the Sixh planperiod was o send a numberof students or post-graduatestudiesabroad and the establishment fa number of specialized esearch nstitutes. Theplan's aim of securing a firm foothold in theemerging echnologies ited, remainselusive.

IIIWESTING N HUMAN RESOURCEDEVELOPMENT

65. The Sixth Plan policies were not only growthorientednor entirelydependenton the favourableimpact of economicgrowth to trickle down to thepoorestsegments f societybut focussedon tack-ling poverty directly through the provision ofpublic servicEso all sectionsof society. Educa-tion and health, in particular, were consideredbasic' ngredientsand although their incrementalsharewassmall, he developmentprogrammewasincreasedrom about L0per cent in the Fifth Plan

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10- LESSONSFROM THE SIXTIT FIVE-YEAR PLAN - (CH-1

to 1,4.3 er cent in the Sixth Plan, with a quantumjr*p io absolute terms. Targets and achieve-mentsare given n StatisticalAppendix Tablet.7.

EDUCATION

66. The approachwas to reduce illiteracy and toexpandprimary education. The literacy rate was

to go up fuomTl to 48 per cent. The strategywas

to use he mosques o accommodate rimary clas-

sesand to involve the youth for mass iteracy func-

tional prograrnmes specially to reduce the rural-

urban-imbalance.

The participation rate of

children in primary schools was targeted to in-

crease rom 48 per cent in 1982-83 o 75 per cent

in 198?-88. In other words, 5 million additional

children were to be provided primary schooling.Larger increase n gttls' than boys' enrolnent was

projected.

67. During the Sixth Plan period more than

L2,000primary schoois in the public and private

sectorwere added; he numberof mosqueschoolsincreased by more than L7,000. Participation iate

at primary level went up to 63.5per cent ftoys 80

per cent; grls 6 per cent). Although the targetwas not achieved,this was a substantial mprove-

ment.

68. In the case of literacy, there was only a three '

percentage oint increaseand the strateryof massliteracy tluough functional progranrnres or adultsdid not achieve the results envisaged and the

short-cut methods employed to improve literacy

were expensive. Apparently the increase in

literacy rate during the Sixth Plan period was via

the primary education oute.

69. Enrolment in classes to 5 increased o 9.3

million in 1987-88as against6.7 million in 1982-

83. This increasewaspossibleas the recurriog e*-penditure on education and training was picked

up by the FederalGovernmentasdevelopment x-

periditure and reimbursed to the provincesas theywere unable to meet the commitment rom theirown resources. The targets of literacy andprimary school enrolmentwere too ambitiousbutreflected the aspirationsof the people (Statistical

AppendixTable 1.8).

HEALTH

70. At the beginning of the Si:ch Five-Year Planthere was a general scarcity of adequate healthservices, n the face of a fast expanding popula-

tion, both in terms of infrastructureand trainedpersonnel, specially paramedics. Nevborn

children were a prey to communicable diseases

and malnutrition and infant mortality was high-

The crude death rate was12;rer thousandand life

expectancy about 55 yqrs; mgternity care

facilities were poor and maternal mortality very

htgh. The quatity of life was seriously affected

and hence the Sixth Five-Year Plan sought totackle these deficiencies for human resource

development

71. During the Sixth Plan period there was con-

siderable expension in basic health facilities;

about 85 per cent of Union Councils have now

either a Basic Health Unit (BHU) or a Rural

Health Centre (RHC) or both. The number of

BHUs increased from L,693 at the beginning of

the Sixth Plan to 3,496 and of RHCs from 298 to

4V2,an increaseof 106and 65 per cent respective-

ly. Training of birth attendants was taken up inearnestand the target of 30,000wasfully achieved(StatisticalAppendixTable 1.9).

72. Infant mortality was considerably reduced

from 98.5per 1,000o 80 and life expectancy n-

creased rom 58.6 to 61 years; crude death rate

declined from 12 per 1000 to 11 per 1000. Per-

haps the greatest sucoess f the Sixth Plan was the

launching of a latge scale immunizationprogramme which resulted in an increase in the

coverageof immunization of children upto 5 years

from 33.8 per cent in L982-83 o 1"00per cent in

1987-88. fhis helped saveabout 100,000childrenfrom death and prevented about 45,000 rom dis-

ability. Treatmentof diarrhoeathrough rehydra-

tion was alsoa step orward.

73. There was a large increase n the number of

doctors,both in the urban and rural areas. In the

urban aroas, he increasewas almost 50 per cent

and in the rural areasmore than five times. Doc-

tors in the public sectorwere employedunder the

Prime Minister's Programme. Also facilities were

extended o them to set up private clinics through

provision of loans. A large number of doctors'residencaswere added to BHUs. Hospital beds

in district and tehsil headquarterswere added.

The number of paramedics/auxiliaries addedduring the Sixth Plan period werc 22,770 as

against13,516during the Fifth Plan.

74. Anarea in which the plan failed was n check-ing third degreemalnutrition. Against a target of

L.25million, malnutrition was checked in 0.3 mil-

lion casesonly. Besides,a major failure was thecontinuedpopulation growth at .3.Lper cent per

year which was more than the 2.6 per cent tar-geted.

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PROVIDING FORTHE PEOPLE - 11

75. The nutritional information confirms that nosignificant rnprovement n the nutritional statusof

the populgtion rn general and vulnerable groupsin particular took place. Sincethe population n-creasedby-_qgry han 3 per cent annually,the percapita availability of proteins and of calories

-in-

creasedmarginally (58.8 grams to 59.8grams and2,29L o 2,3@calories).

WOMEN'SDEVELOPMENT

76. The Sixth Plan has the distinction of beingthe first plan in Pakistanwhich devotedspecialatltention to women in economicdevelopment. Itnoted what it called the ,'shocking" neglect ofwoqe-n in the provision of literacy, education,nutrition, and maternaland child health facilitieito women. In addition to providinga separateal-Iocationof funds to addreis these ssues-theSixh

Plan attempted to strengthen he framework ofnon-governmentorganizations active in women'sprogrammes. In view of the noveltyof this areaofattention, the greatestsuccessof-the Sixth planwas to place this on the development agenda ofthe nation; concreteprogresswas impededby anabsence f cogentprogrammesn the area.

POPULATION WELFARE

77. The Sixth Plan strategyof fertility reductionunder

the population welfare programme was .basedon a multi-disciplinaryapproich designedto modi$r amily sizepieferencawhile responiingto the demand for services by expanding thedeliverysystem. In view of the iensitivities,iesis-gnc9.and opposition o the programme n society,the Sixth Plan adopted the lnnovative strategyofinvolving ocal leaders and inducting the prlvatesector n the provisionof population welfaie ser-vices. There was also a shift from a uni-purposefamily planning approach o a functional ntegra-tion of socialservices.Core projects,complemen-tary projectsand support projectswere identifiedto tmplement the programme: While results ofthe programmewill emergeonly over the long-term, t is thoughtthat somesuccess as achievJdduring he Sixth Planperiod.

DEVELOPINGTIIE CULTURAL HERITAGE

78. The Sixh Plan recognisedhe role of cultureand of the massmedia in promoting national in-tegration. It was unable,however, o offer eithera substantiveappreciation of this insight or aco-gent programme designed to exploit this

relationship.

CULTURE, SPORTS& TOURISM

79. ln the field of culture, sports and tourism,the Sixth Plan continuedwith the traditional ap-groaclr 9f $e previous plans in which essentialiyfinancial allocationsare provided for a number oiprojects

on an ad hoc basis. A number ofmuseums,an art gallery, a library, a national ar-chives building and sports stadia were planned.The emphasis,unfortunately, remained on brickand mortar aspectswhile conceptual ssueswerenot addressedadequately. Projects ike the con-struction of an International ConferenceHall anda Cultural Complex in Islamabad did notmaterialise. Greater successj however, wasachieved in tourism, where a policy frameworkwas provided to encourage he private sector tocomplement public sector efforts to promotetourism.

MASSMEDIA

80. The Sixth Plan aimed at expanding theqover-agef massmedia in order to encouragena-tional integrationand promote the creation-ofat-titudesconducive o the promotion of the govern-ment's developmentefforts. A well-conceivedprogramme of investments n radio, televlsion,films and presswas proposed n the Sixth plan;the major project being a second elevisionchan-nel, to promote educationalprogrammes. Once

again, while the funds were utilized to expand thecapacityof the media,executingagencieswere un-able to come up with meaningful suggestionsonthe contentof programmeso be transmitted.

PROVIDINGFOR THE PEOPLE

81..The basicapproachof the Sixth plan was tohelp the poor emergefrom their poverty and toenable hem to obtainthe necessities flife - hous-ing water and sanitation, and Education andhealth.

PHYSICAL PI.-ANNING& HOUSING

82. The Sixth Plan, therefore, placed emphasison the developmentof residential plots both bythe public and private sectors, improvement ofkatchi abodis, construction of housing uni-tsthroughenlargedcredit facilities n the urban andrural areas and cost free loans to low incomegroups o build houseson self-helpbasis,and im-provementn urbanand rural watersupply.

WATER SUPPLY

83. By now more than half of the total popula-

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12 LESSONS'ROM HE SIXTHFIVEYE4B Jl4XjlCH-l

tion has accesso cleanwater. Although the ratio

inthe urbanareas s muchhigher than n the rural

areas, he gap hasbeen reducedwith increasen

coverage fpopulation from 22per cent to 45 per

cent in-the turil areasand from 77 per cent to 80

Dercent n the urbanareas.More thanhalf of theurban populationhas accesso sewerageacilities;

in the rural areas such facilities have not ex-

panded ast enoughand only rp ne1cent of rural

oooulation s coveied. As for electricity, t is avail-

lUi" to more than one third of total population

(StatisticalAppendixTableL.7).

VILLAGE ELECTRIFICATION

84. The Sixh Plan proposed an ambitious

Drosramme or village elLctrification. The target

*uJto electri$ 20,nn0 illagesover the 16,400 il-laees eported to be electrifiedat the beginningof

th; Sixtl Phn. The modalities,however,were to

be settled n execution.A fresh mpetuswasgiven

to village elebtrification under the Prime Mini-

ster's Five-Point Programme' which aimed at

electrificationof 90 per cent of villagesby 1990'

This targetwas set on the basisof the Water and

Power-Development

Authority's (WAPDA's)

statistics,a critital examinationof which revealed

a definition problem: WAPDA was counting the

abadisand settlements sa villagewhile reporting

their performance. To overcome he ambiguiry,a

villaee was then defined in accordancewith thearea'conceptused n the L981BopulationCensus'

The number of villagesreported by WAPDA to

havebeenelectrifiedby June1986 22,930)was ac-

cordinglyrevised or planningpurposes o 12,53L

(census illagesonlY).

85.At the end of the Sixthptan tt e total number

of censusvillages which will be electrified are

76,525 ut of i total of 48,974 ensus-illages-inthe country. As implementation did not take

placeon a monitorablebasis, he Sixth Plan'svil-

iage electrification argetswere not met. In fact,hJwever,althoughthe financial allocationsunder

the SixthPlan were fully utilised,targetswere not

setcarefully-and onitoringwas nadequate.

SOCIAL WELFARE & SPECIAL EDUCATION

86. The Sixth Plan's social welfare and special

educationprogrammewas designed o take care

of the spicial needs of neglectedgroups in

society. Specialusewas to be madeof zakat and

ushr iolleitions, initiated during the Fifth Plan-

The approach was to strengtheninstitutional

linkages between government and non-govern-

meni organisations NGOs), community groups'

and volunteerworkers in order to foster an en-

vironment conducive to the initiation and

strengtheningof socialwelfare services.

87. The major programmesplanned to be in-

itiated under the Sirth Plan were: children, youthand womens' welfare services, special education

and a national trust for the handicapped,

rehabilitation services,medical socidl work ser-

vicesand staff welfareservices. In addition,com-

munity developmentprojects and NGOs were to

be supported. During the SixrhPlan voluntaryso

cial welfare agencieswere able to mobilise private

contributions and it is believed that they spent

much larger sumsof money han the public sector

to ptotn6t" and develop-social services n the

"oorrttv.However, there remaineda shortageof

trainedpersonneland of training acilities.

INCOME & EMPLOYMEM POLICY

88. The Sixth Plan made a radical departure

from the past in that it specifiedpolicy me.asure

for reducing income imbalances through the im-plementatioi of an employment and income

boficv. The plan had recogrrisedhat the employ-

menfproble.i wittUeboth real andserious.

89. Despite considerable mprovement in the

demand for hbour in the country, andan employ-

ment growth rate of 2.6 pet cent per.year' un-emplolment increased during the.-Sixh

Plan

o".iod primarilv due to more rapid growth in

population than'anticipatedand the-let return of

batistatti immigrants rom the Middle East' The

problem of the educatedunemployedwas acute'

Under the Prime Minister's Programme, obs

were created for professionals,doctors and en-

gineers in the public sector; and self-emplolment

iu, p.o^oted- through the provision.of credit

facilities to set up private businesses/clinics' he

problemof unemployment, owever, emainedun-

solved.

90. To ensure that wages and salaries were

protected rom inflationarypressures,n the Sixth

itlan real wageswere to move n line with the in-

crease n lab-ourproductivityand partial indexing

with price movementswas planned'- Social wel-

fare measures to ameliorate absolute poverty

through he safetynetsofzakat andushrwere also

desigoed o make an impact in reducing extreme

pouJtty andmalnutrition.

91. Availableempirical evidencesuggestshat in

Dastvears. n real-terms, here was an increase n| ^ r - - ^ - ^ - L - ^ - ^ ^ ^ f , { ^ r ^ r l . o

ler""pita'iocomes

but due to absence f data, he

ii"tutJ is not clear whetherthe poorer groups of

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coNcLUSION- 13

societyenjoyed he benefitsof developmentmorethan the rich. Available data for 1970-85ndicatesthat income inequalities widened, as the share ofthe lowest income households declined con-siderably rom 20.5per cent n L970-7i.o 1"7.9 ercent in 1984-85, while the highest income

households benefitted more from economicdevelopment; heir sharerose from 4L.4 per centto 46.7per cent (Chapter5, Table5.2).

92.The inequalities in incomesbetween he ruraland urban areaspersisted,but to someextent, hedifferences narrowed. In t979 the average ruralincome was 38 per cent less than the

-average

urban incomebut in 19821-85,t was reduced o 36per cent. This was,however,accompaniedby awideningof income nequalities n the rural areaswhich indicates that in the rural areas the richgainedmore than the poor. Also, while absolute

poverty, in ter'msof nutritional intake has beenchecked,aLnost half of rural population as com-pared to one-fourth of urban population cannotmeet heir basic equirements.

93. Data for L985-86o 1987-88 re not yet avail-able to enable an analysisof whether there hasbeen any major departure from the position indi-cated above.Acceleration in financial provisionsfor rural developmentduring the last two yearsofthe Sixth Five Year Plan should,however,makean mpacton narrowing ural-urbandifferences.

CONCLUSION

94. In evaluating he Sixth Plan it is important tokeep in mind the historical context in which theplan was formulated and implemented.At the

conclusion of the Fifth Plan the nation hadregained a semblanceof financial viabilitv after aperiod of forbearance and restraint. In theprocess,creditworthinesshad been regainedandthe climate was favourable for mobilization offoreign assistance or development. At this junc-

ture, the Sixh Plan aimed at regenerating en-thusiasm for development and above all to mobi-lize foreign assistance.

95. In both, the plan succeededbeyond allmeasure. Aided by political developments, om-mitmentsand disbursements f foreign loans andgrants rose sharply during the Sixh Plan period.The fact that there wasa nationaloutcrvat the un-realism of the plan or the widespreadcriticismthat it had been a tailure, is itself testimony o thefact that it had succeededn

raising hopesafter aperiod of national despondency. In fatt, despites61pssignificant areas of failure, a great deal wasaccomplished,n addition to its main achievementof mobilizingnational nterestand commitment odevelopment.

96. Now that the SixthPlanhassucceededn rais-ing nationalexpectations,he SeventhPlanaddres-ses domestic ssues of self-reliance,ncome dis-tribution and poverty alleviation, together withgrowth - and outlines he sacrificeswhich seem o

be called for. Ultimately, it is for the natiou todecidewhether the goalsheld out in the SeventhPlan are worth striving for, and whether the costsinvolvedshouldbe incurred. The testof all plans,personaland national, ies n implementation-

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