The process of economic planning in Pakistan started towards the beginning of the sixth decade of the twentieth century. First Five Year plan was published in May 1956. Seven other Plans were launched successively. We have studied all these Plans separately, though briefly, in the preceding pages.
Pakistan's development strategy has undergone a continuous process of transformation. In the six decade, industrial development was the top priority. This policy was successful in boosting the pace of industrial development and achieving the target of 7% annual growth, but gap between the incomes reached an alarming level. Another result of this policy was the neglect of the agriculture sector which forms the backbone of our economy.
During the seventh decade (after 1960) the strategy was changed, agriculture sector was given due importance and foreign monetary support in the shape of aid and loans was considered to be essential for the development of national economy. Apparently this policy proved successful and the country was able to achieve 7 percent annual growth rate, but it brought certain problems in its wake. Gap between the rich and the poor was further widened. Dependence on foreign aid increased. Industries set up during this period were only suitable for the production of consumer's goods, amounts to be paid in the shape of foreign exchange for the purchase of raw material and industrial spare parts increased. Balance of payments was disturbed due to the increased imports bill and lower exports level. Disparity between East and West Pakistan reached to an alarming level which. ultimately resulted in the separation of East Pakistan.
During the eights decade the policy was again redefined with a view to make the process of development more equitable. To achieve this objective, 32 big industrial units were nationalized; other smaller industrial unit were also nationalized gradually. The policy of nationalization caused an alarm to the investors and investment came to a standstill, industrial machinery was devastated, production decreased and the laborers took to protests, due to low industrial output dependence on foreign aid increased. In the following years the feeble economy of the country kept crumbling under the colossal burden of amounts to be spent on debt servicing and the payment of heavy amounts as interest. The nation was badly taken into the vicious circle of poverty. During the last years of the eighth decade the policy of nationalization was again given up and process of denationalization started, new incentives were provided to private investors. The policy makers tried to hit a balance between the industrial and agriculture growth. The new fiscal policy aimed at enhancing dependence on internal savings instead of foreign aid. Social services were expanded and HRD (Human Resource Development) for the first time emerged as a guiding principle of the fiscal policies. In other words, the policy makers started realizing that the objectives of increasing a prosperous society cannot be achieved unless human resources are developed on top priority basis. Education, no doubt, is the paramount factor in the development of human resources.
