Q-16 = Industrial development is basis of economic development. Discuss with reference to Pakistan
INDUSTRIAL DEVELOPMENT IS BASIS OF ECONOMIC DEVELOPMENTIndustries play a dominant role in economic development of a country. The standard of living of the people of western countries is very high. They enjoy all comforts and luxuries of life due, to higher productivity of goods and services in their countries. This is due to industrialization. Unfortunately there were no industries when Pakistan came into being but now with the efforts of government and the people there is an improvement in this regard however more is required to be done.
ROLE OF INDUSTRIES IN ECONOMIC DEVELOPMENT
1 Increase in national income
2 Increase in employment opportunities
3 Increase in productive capacity
4 Development in agriculture
5 Increase in government revenues
6 Improvement in balance of payments
7 Economic stability and political domination
1. INCREASE IN NATIONAL INCOMEProgress of industrial sector of the country results greater production of goods and services. Output of goods and services is known as GDP. Increase in national income increases per capita income of the people. Higher per capita income increases general welfare of people and standard of living of masses improves.
2. INCREASE IN EMPLOYMENT OPPORTUNITIESIndustries create many types of employment opportunities. Disguised unemployment prevailing in agricultural sector is removed as the labor moves for search of jobs to the cities where industries are located. Increase in employments results increased savings, which is utilized for further investment in industries.
3. INCREASE IN PRODUCTIVE CAPACITYIndustrialization increases productive potential. Specialization results in mass production of superior quality goods at a cheaper cost. Greater employment opportunities increase income; income increases demand for goods and services and increase in demand increases investment in industries and other sectors of economy. Effective demand through acceleration principle increases investment and a small investment through multiplier effect increases national income many times, and in order to meet demand of people productive capacity develops.
4. DEVELOPMENT IN AGRICULTUREAgriculture is backbone of the economy of Pakistan where as agriculture itself depends upon the progress and development of industries. Industries produce all inputs that are needed by agriculture such as fertilizers, insecticides, and machinery etc. Agricultural output such as cotton, sugarcane, edible oils, fruits, tobacco etc becomes input for industries. All these factors increase income of farmers. Thus agriculture and industries are inter-dependent sectors of economy.
5. INCREASE IN GOVERNMENT REVENUEIndustries provide revenue to the Govt. through different sources such as tax on the profit of the company, income tax, sales tax, excise duty, import duty , export duty. Thus industries provide a greater proportion of taxes to the Govt.
6. IMPROVEMENT IN BALANCE OF PAYMENTSExport of industrial goods increases foreign exchange earnings. Likewise processing of raw material reduces expenditure on imports, and foreign exchange earnings improve balance of payments of Pakistan.
7. ECONOMIC STABILITY & POLITICAL DOMINATIONArms, ammunition, communication appliances, vehicles and other defense requirements are produced by domestic industries, which make defense of Pakistan strong. Industrialization provides economic and political stability. It provides name and fame in international community. Hence a political domination is achieved.
INDUSTRIAL DEVELOPMENT IS BASIS OF ECONOMIC DEVELOPMENTIndustries play a dominant role in economic development of a country. The standard of living of the people of western countries is very high. They enjoy all comforts and luxuries of life due, to higher productivity of goods and services in their countries. This is due to industrialization. Unfortunately there were no industries when Pakistan came into being but now with the efforts of government and the people there is an improvement in this regard however more is required to be done.
ROLE OF INDUSTRIES IN ECONOMIC DEVELOPMENT
1 Increase in national income
2 Increase in employment opportunities
3 Increase in productive capacity
4 Development in agriculture
5 Increase in government revenues
6 Improvement in balance of payments
7 Economic stability and political domination
1. INCREASE IN NATIONAL INCOMEProgress of industrial sector of the country results greater production of goods and services. Output of goods and services is known as GDP. Increase in national income increases per capita income of the people. Higher per capita income increases general welfare of people and standard of living of masses improves.
2. INCREASE IN EMPLOYMENT OPPORTUNITIESIndustries create many types of employment opportunities. Disguised unemployment prevailing in agricultural sector is removed as the labor moves for search of jobs to the cities where industries are located. Increase in employments results increased savings, which is utilized for further investment in industries.
3. INCREASE IN PRODUCTIVE CAPACITYIndustrialization increases productive potential. Specialization results in mass production of superior quality goods at a cheaper cost. Greater employment opportunities increase income; income increases demand for goods and services and increase in demand increases investment in industries and other sectors of economy. Effective demand through acceleration principle increases investment and a small investment through multiplier effect increases national income many times, and in order to meet demand of people productive capacity develops.
4. DEVELOPMENT IN AGRICULTUREAgriculture is backbone of the economy of Pakistan where as agriculture itself depends upon the progress and development of industries. Industries produce all inputs that are needed by agriculture such as fertilizers, insecticides, and machinery etc. Agricultural output such as cotton, sugarcane, edible oils, fruits, tobacco etc becomes input for industries. All these factors increase income of farmers. Thus agriculture and industries are inter-dependent sectors of economy.
5. INCREASE IN GOVERNMENT REVENUEIndustries provide revenue to the Govt. through different sources such as tax on the profit of the company, income tax, sales tax, excise duty, import duty , export duty. Thus industries provide a greater proportion of taxes to the Govt.
6. IMPROVEMENT IN BALANCE OF PAYMENTSExport of industrial goods increases foreign exchange earnings. Likewise processing of raw material reduces expenditure on imports, and foreign exchange earnings improve balance of payments of Pakistan.
7. ECONOMIC STABILITY & POLITICAL DOMINATIONArms, ammunition, communication appliances, vehicles and other defense requirements are produced by domestic industries, which make defense of Pakistan strong. Industrialization provides economic and political stability. It provides name and fame in international community. Hence a political domination is achieved.