Government to rely on industrial growth for GDP target

The government's reliance on industrial growth has increased to achieve its economic targets for the year 2004-05, especially in the wake of expected poor agriculture performance due to severe water shortage. The new government would exert more pressure for industrial growth, including the construction industry, in the wake of possible poor performance in the agriculture sector, said the industry sources.
"The report about severe water shortage, which is 60 percent, has upset the government seeing poor agriculture performance in the current year," said an economic analyst who insists that government would rely on industrial growth to achieve its 6.6 percent GDP target.
The production data of the year 2004-05 showed significant growth in major sectors including tremendous growth in the consumer goods production.
The highest growth was reported in the auto sector where car production increased by 57.83 percent, Jeeps 115.78 percent, tractors 36.26 percent and motor cycles by 71.94 percent.
The year, which ended on June 2004, recorded a 2.6 percent growth in the agriculture sector against the target of 4 percent. It happened despite sufficient water and heavy rains all over the country.
"Last year the country achieved 6.4 percent growth with the help of 17 percent growth in the manufacturing sector, while the contribution of agriculture sector was disappointing," the analyst said.
The textile industry also registered significant growth as it made heavy investment to equip itself in meeting the changing requirement of the international market.
Despite the government's continues efforts for the last four years; the construction industry could not reach the required pace. The industry sources said that government might offer more incentives for the growth of this industry, which in turn could accelerate the growth of over 36 allied industries.
Cement was another indicator, which posted healthy and important growth for the year ending June 2004. The sector registered a growth of 19.47 percent, indicating significant activity in the housing and construction industry
Sources in the construction industry said there was move in the government circle to provide land at cheaper prices to boost the construction industry.
"The idea to provide cheap land has been floating for many years in the government circle but the maturity of idea could spark some controversy and it also carries risk of being exploited by influential," commented an analyst.
However, government believes that once the construction industry took-off, it would be easy to achieve the economic targets.
The International Monetary Fund has recently expressed its confidence that Pakistan could achieve 6.5 percent GDP growth for the year 2004-05. However, the analysts believe that the country would heavily depend on industrial growth to achieve the GDP target.