Count Dracula
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Cool story brah
How India left Pakistan behind
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niaz
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The economic state of a country is not only a critical factor for the well being of her people, it is also an indicator of her ability to fight a successful long war. In other words, a weak economy implies a militarily weak country. In the words of Iqbal:
Taqdeer ke qazi ka ye fatwa hai azal se
hai jurm-e zaeefi ki saza marge-e mafajat
( It is the eternal decree of the judge of destiny that punishment for the crime of being weak is death.
I have often tried to analyse the reasons as to why India overtook Pakistan and moved far ahead in economic development. In my view, Pakistan may have been ahead of India based upon GDP per capita criterion, but in terms the pool of skilled and educated human resource, India has never been behind Pakistan.
The main reason being that it was mostly the rural/ agricultural areas that became Pakistan. Since the majority of the industrial/manufacturing units were located in the cities of Calcutta Jamshedpur, Madras & Bombay; these went to India. Additionally, majority of the institutions of higher education were also in the cities that became part of India. Pakistan's share comprised of only two universities; University of Punjab and Dacca University. Thus Pakistan started with a great disadvantage in the manufacturing as well as in the field of higher education.
India pursued the policy of self-reliance very early; however, the progress was impeded by the red tape and lack of FDI. Reforms initiated by Narismah Rao in 1991 removed most of the hurdles; I personally heard Narismah Rao bosting on the TV that his liberalisation policies brought in $10-bilion in FDI in the very first year. There was a time lag and the economic growth accelerated during the 10-year period starting in the year 2000. According to the World Bank report, Indian GDP at current prices rose from $462-billion in 2000 to $1,657-billion in 2010, that by 357%!.
Pakistan also did quite well during, especially during the first 7 years of Musharraf regime. Pakistan GDP rose from $74-billion in 2000 to $177-billion in 2010 (240%). It can, however, be argued that the growth was primarily due to the input of funds resulting from joining the WOT.
In my humble opinion, reasons for India doing much better than Pakistan can be attributed to 4 factors.
First and foremost being that India never went through the period of the suicidal nationalization of the ZA Bhutto regime. On January 1, 1972, the then PPP government took over 31industrial units under 10 categories of industries which included shipping, iron and steel, basic metal, heavy engineering, assembly and manufacturing of motor vehicles, tractor plants, chemicals, petrochemical, cement, and public utilities, including power generation, gas and oil enterprises.
In 1972-73, nationalized units employed 40,817 staff; the number went up 64,643 people in 1976 - 77 with salaries, wages and other benefits for the taken over units increasing over 300 percent. On the other hand, capacity utilisation declined in the case of 21 units and between 1972 and 1977.
In October 1977, a commission appointed by Zia’s military government to review the financial position of state-owned enterprises reported that only 15 out of 54 nationalised units were in a position to maintain profitability during 1972-77.
As a result, enterprising industrial families started moving out of Pakistan with whatever assets they were left with. The Dawoods moved to Texas, the Saigols started investing in the Middle East and the Habibs focused on Europe for growth opportunities.
The following chart illustrates how disastrous Bhutto’s economic policies were for Pakistan.
The second reason is the "Islamic extremism". Despite occasional setbacks such as the tsunami, Gujarat earthquake of 2004 & drought, India largely enjoyed a period of stable economic policies and good law & order situation. On the other hand, Pakistan has been a war torn country since 2002.
The roots go back to the mushrooming of the madrasahs during the Zia era. Originally meant to supply the recruits for the fight against the Soviets in Afghanistan; post 9/11, after Pakistan joined WOT, the same freedom fighters metamorphosed into terrorists. State Bank of Pakistan Report of 2016 estimates that war on terrorism had cost $118 billion to the national economy.
Pakistan has suffered from the lack of good governance and corruption for a long time and this is another factor impeding Pakistan’s economic development. According to corruption perception index (CPI 2016) out of 175 countries, Pakistan stands at 116. Nepotism is also widespread where incompetent party loyalists are given rapid promotions and plum jobs. Worse offenders have been the successive PPP governments which resulted in state-run organizations just as PIA, Railways and the Steel Mill being turned into white elephants.
Pakistanis don’t like to pay taxes. According to a recent estimate, only 1.2- million out a country of 215- million are registered tax payers. There is no tax on agricultural income at all. Even though an ordinary street hawker knows exactly how much he had made at the end of the day, when Shaukat Aziz attempted to tax small shop keepers, there was a nationwide strike. The excuse was that being illiterate; shop keepers don’t keep any records!
The direct result of this is that big corporations, landlords, businessmen, politicians earning a lot pay less tax. On the other hand, the poor earn less but are taxed more through a tax system which collects about 90 percent of the tax revenue in the form of indirect taxes. After the hefty Defence expenditure, there is simply not enough money to go round to spend on education, health & development.
IMO in the terms of economic growth Musharraf era was best after Ayub Khan regime. However, some gross errors of judgement were made. For example, no new power plants were planned resulted in the major power crisis. Introduction of CNG as automotive fuel without adequate supply back-up resulted in gas shortages as well.
Since the year 2000, the energy shortfall has wreaked havoc on the overall economy. I have not come across power outages and the gas shortages in India on the scale that Pakistan has suffered since 2007. Therefore, IMO lack of good governance and the resulting shortage of electricity and gas is the third major reason for Pakistan lagging behind India.
Fourth and the most significant factor is the IT industry of India.
The new administration under Atal Bihari Vajpayee (Prime Minister from 1998–2004) placed the development of Information Technology among its top five priorities. The first step was the creation of ‘Software Technology Parks of India’ (STPI). This corporation provided satellite links to major IT developers enabling them to transmit the work done in India all over the world. The New Telecommunications Policy of 1999 (NTP 1999) helped availability of the infrastructure for the telecommunication such as the satellites, towers etc. to the private IT enterprises.
Another boosting event was the millennium." bug. Fear of a complete breakdown of computer services, the task of rectifying the Y2K/ millennium bug was outsourced to the Indian IT industries by the US corporations.
While total IT exports were only about $10-billion in 1999, bu 2010 these had risen to $45-billion and to $61-billion by 2016. Expected IT& Business Proces Management (BPM) revenues amount to USD 154-billion in FY 2017. There are about 15,000 IT firms providing nearly 3.7-million jobs; making IT-sector the largest private sector employer accounting for 40% of India’s export earnings.
Pakistan’s IT industry is still in the embryonic stage. Total size is about $3.5-bilion with exports of $700-million. Compared to India Pakistan IT industry is not even worth the mention.
Conclusion.
It is my honest opinion there is not a lot of difference between an average Pakistani and an average Indian in either intelligence or in the cultural habits. Both the nations are prisoners of the archaic customs and backwards-looking socio-religious culture.
Despite all of the above, the fact that Pakistan managed to do well and had higher GDP per capita especially during the 1960’s speaks well of the drive & initiative of the first generation Pakistanis. However, a well-read friend of mine pointed out this was probably due to a large number of educated Muslim migrants from East Punjab & UP trained in the British tradition of hard work, most of whom had died out by the turn of the century.
It is quite likely that even without the IT, India would have overtaken Pakistan because she possessed a larger pool of highly educated people as indicated by the fact that India carried out the Atomic test at Pokhran in 1974 and launched her first Satellite in 1975. Nevertheless, I am of the firm belief that it is on account of her unparalleled progress in the Information Technology that India has left Pakistan behind in the economic well-being.
P.S. Kindly note that different reports give different data, hence figure quoted may not be exact, but these are sufficiently accurate to illustrate my point.
Taqdeer ke qazi ka ye fatwa hai azal se
hai jurm-e zaeefi ki saza marge-e mafajat
( It is the eternal decree of the judge of destiny that punishment for the crime of being weak is death.
I have often tried to analyse the reasons as to why India overtook Pakistan and moved far ahead in economic development. In my view, Pakistan may have been ahead of India based upon GDP per capita criterion, but in terms the pool of skilled and educated human resource, India has never been behind Pakistan.
The main reason being that it was mostly the rural/ agricultural areas that became Pakistan. Since the majority of the industrial/manufacturing units were located in the cities of Calcutta Jamshedpur, Madras & Bombay; these went to India. Additionally, majority of the institutions of higher education were also in the cities that became part of India. Pakistan's share comprised of only two universities; University of Punjab and Dacca University. Thus Pakistan started with a great disadvantage in the manufacturing as well as in the field of higher education.
India pursued the policy of self-reliance very early; however, the progress was impeded by the red tape and lack of FDI. Reforms initiated by Narismah Rao in 1991 removed most of the hurdles; I personally heard Narismah Rao bosting on the TV that his liberalisation policies brought in $10-bilion in FDI in the very first year. There was a time lag and the economic growth accelerated during the 10-year period starting in the year 2000. According to the World Bank report, Indian GDP at current prices rose from $462-billion in 2000 to $1,657-billion in 2010, that by 357%!.
Pakistan also did quite well during, especially during the first 7 years of Musharraf regime. Pakistan GDP rose from $74-billion in 2000 to $177-billion in 2010 (240%). It can, however, be argued that the growth was primarily due to the input of funds resulting from joining the WOT.
In my humble opinion, reasons for India doing much better than Pakistan can be attributed to 4 factors.
First and foremost being that India never went through the period of the suicidal nationalization of the ZA Bhutto regime. On January 1, 1972, the then PPP government took over 31industrial units under 10 categories of industries which included shipping, iron and steel, basic metal, heavy engineering, assembly and manufacturing of motor vehicles, tractor plants, chemicals, petrochemical, cement, and public utilities, including power generation, gas and oil enterprises.
In 1972-73, nationalized units employed 40,817 staff; the number went up 64,643 people in 1976 - 77 with salaries, wages and other benefits for the taken over units increasing over 300 percent. On the other hand, capacity utilisation declined in the case of 21 units and between 1972 and 1977.
In October 1977, a commission appointed by Zia’s military government to review the financial position of state-owned enterprises reported that only 15 out of 54 nationalised units were in a position to maintain profitability during 1972-77.
As a result, enterprising industrial families started moving out of Pakistan with whatever assets they were left with. The Dawoods moved to Texas, the Saigols started investing in the Middle East and the Habibs focused on Europe for growth opportunities.
The following chart illustrates how disastrous Bhutto’s economic policies were for Pakistan.
The second reason is the "Islamic extremism". Despite occasional setbacks such as the tsunami, Gujarat earthquake of 2004 & drought, India largely enjoyed a period of stable economic policies and good law & order situation. On the other hand, Pakistan has been a war torn country since 2002.
The roots go back to the mushrooming of the madrasahs during the Zia era. Originally meant to supply the recruits for the fight against the Soviets in Afghanistan; post 9/11, after Pakistan joined WOT, the same freedom fighters metamorphosed into terrorists. State Bank of Pakistan Report of 2016 estimates that war on terrorism had cost $118 billion to the national economy.
Pakistan has suffered from the lack of good governance and corruption for a long time and this is another factor impeding Pakistan’s economic development. According to corruption perception index (CPI 2016) out of 175 countries, Pakistan stands at 116. Nepotism is also widespread where incompetent party loyalists are given rapid promotions and plum jobs. Worse offenders have been the successive PPP governments which resulted in state-run organizations just as PIA, Railways and the Steel Mill being turned into white elephants.
Pakistanis don’t like to pay taxes. According to a recent estimate, only 1.2- million out a country of 215- million are registered tax payers. There is no tax on agricultural income at all. Even though an ordinary street hawker knows exactly how much he had made at the end of the day, when Shaukat Aziz attempted to tax small shop keepers, there was a nationwide strike. The excuse was that being illiterate; shop keepers don’t keep any records!
The direct result of this is that big corporations, landlords, businessmen, politicians earning a lot pay less tax. On the other hand, the poor earn less but are taxed more through a tax system which collects about 90 percent of the tax revenue in the form of indirect taxes. After the hefty Defence expenditure, there is simply not enough money to go round to spend on education, health & development.
IMO in the terms of economic growth Musharraf era was best after Ayub Khan regime. However, some gross errors of judgement were made. For example, no new power plants were planned resulted in the major power crisis. Introduction of CNG as automotive fuel without adequate supply back-up resulted in gas shortages as well.
Since the year 2000, the energy shortfall has wreaked havoc on the overall economy. I have not come across power outages and the gas shortages in India on the scale that Pakistan has suffered since 2007. Therefore, IMO lack of good governance and the resulting shortage of electricity and gas is the third major reason for Pakistan lagging behind India.
Fourth and the most significant factor is the IT industry of India.
The new administration under Atal Bihari Vajpayee (Prime Minister from 1998–2004) placed the development of Information Technology among its top five priorities. The first step was the creation of ‘Software Technology Parks of India’ (STPI). This corporation provided satellite links to major IT developers enabling them to transmit the work done in India all over the world. The New Telecommunications Policy of 1999 (NTP 1999) helped availability of the infrastructure for the telecommunication such as the satellites, towers etc. to the private IT enterprises.
Another boosting event was the millennium." bug. Fear of a complete breakdown of computer services, the task of rectifying the Y2K/ millennium bug was outsourced to the Indian IT industries by the US corporations.
While total IT exports were only about $10-billion in 1999, bu 2010 these had risen to $45-billion and to $61-billion by 2016. Expected IT& Business Proces Management (BPM) revenues amount to USD 154-billion in FY 2017. There are about 15,000 IT firms providing nearly 3.7-million jobs; making IT-sector the largest private sector employer accounting for 40% of India’s export earnings.
Pakistan’s IT industry is still in the embryonic stage. Total size is about $3.5-bilion with exports of $700-million. Compared to India Pakistan IT industry is not even worth the mention.
Conclusion.
It is my honest opinion there is not a lot of difference between an average Pakistani and an average Indian in either intelligence or in the cultural habits. Both the nations are prisoners of the archaic customs and backwards-looking socio-religious culture.
Despite all of the above, the fact that Pakistan managed to do well and had higher GDP per capita especially during the 1960’s speaks well of the drive & initiative of the first generation Pakistanis. However, a well-read friend of mine pointed out this was probably due to a large number of educated Muslim migrants from East Punjab & UP trained in the British tradition of hard work, most of whom had died out by the turn of the century.
It is quite likely that even without the IT, India would have overtaken Pakistan because she possessed a larger pool of highly educated people as indicated by the fact that India carried out the Atomic test at Pokhran in 1974 and launched her first Satellite in 1975. Nevertheless, I am of the firm belief that it is on account of her unparalleled progress in the Information Technology that India has left Pakistan behind in the economic well-being.
P.S. Kindly note that different reports give different data, hence figure quoted may not be exact, but these are sufficiently accurate to illustrate my point.
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HariPrasad
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Pre stage of full radicalization.
dreamer4eva
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Happy to be proved wrong mate. I base my opinions using my grey matter not on media reports. Have a good one..Cool story brah
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