Whenever we talk about the economic growth of a nation what counts at first hand is the contribution of industry that country has. The most of economically stable countries today are USA, The Britain, France, Germany, Canada, Japan, China etc. have most of the industry. These countries started their way to stability just after the industrial revolution of 1760-1830. After the revolution and advancement in technology these countries gave more importance to the industries then every other nation does.
Most of the established and well-known companies started their businesses from these countries. These companies were not such established from the beginning. All of them started from the scratch and with the time proved to be the world’s best.
Examples are likely Honda, Toyota, Nordstrom, Apple, Microsoft, and Mattel. The topic insight here is the small scale industry’s contribution in Pakistan’s economy. These are the industries which can also be called the support industries for the firms which have larger magnitudes.
These are the industries which are mainly dependent on new innovations. These are the futures large scale industries. On the similar hand they are the provider of the materials that established firms needs to make different other products. To define the SSI we have two aspects. According to the general definition applied across the globe, any industry which is related to manufacturing, trading or services, having the investment not more than Rs. 100lacs i.e.
1karors, is called a small scale industry. But, According to Pakistan the terms and situations set by the Pakistani authorities who regulate the small scale industries are that industry employing not more than 50 people, if using power, and if not the employment ceiling rises to 100 people. Whereas the investment ceiling is Rs. 5lacs, for both cases. A sub branch of SSI is cottage industry which may be defined as an industry that have an investment of not more than 15lacs. Following is the list of industries that are officially included under the roof of small scale industries in Pakistan.
These are the industries that are more prominent but there are some more industries that are not that much on the front then these are: carpets, textile, embroidery, jewellery, ceramics, cutlery, woodworks, sports goods. Small scale industries are scoped into following three aspects in Pakistan, Manufacturing, Trading, Services. In the aspect of manufacturing, industries related are Carpets, Textiles, Embroidery, Jewelry, Ceramics, Woodwork, Metal works and Sports goods. All these industries are related to the production of their genre items.In Pakistan carpet industry is mainly situated in the northern areas. It also prevails in the tribal areas. Some areas of Baluchistan also have the rich development in this field. Whereas there is also a hypocritical theory that suggests that the carpets that Pakistan is producing are made in Afghanistan and are smuggled into Pakistan because of law and enforcement situation there.
Which then are exported with the name of Pakistan. Also that the carpet industry also compromises the laws of child labour. But whatever the reality may, carpet industry had been contributing in the economic growth of Pakistan since the beginning.The textile industry is mainly situated in the areas of Faisalabad and Sialkot of Punjab. in these district many of the workshops are established with looms that weave the cotton. Then these clothes are sent all over the Pakistan and also are exported.
Lahore is the situation where the embroidery workshops have their feet rooted. The market of “anar kali” in Lahore is the biggest market of embroidery works in Pakistan.Jewellery is mainly produced in Pakistan have its works done in Karachi.
The Saddar market of Gold Jewellery is main provider for the whole Pakistan. Some of what is also exported. Whereas the artificial jewellery is also produced in this market. Jewellery market also produces the wearing of silver.Ceramics industry in Pakistan mainly produces tiles, crockery, show pieces, bathroom accessories.
The area supporting this SSI is Multan and Rahim Yar Khan.Woodworks are done almost all over the country. But Karachi is mainly the hub of this industry. Crafted doors, almeries, show pieces, chairs, furniture and many other things are made.Karachi being the port city and also the home to many steel industries, is the hub of metal works. The mini city Hubb of Baluchistan near Karachi is the hub of these type of workshops that consists of lathe and CNC machines.Sialkot is the well-known city worldwide for the manufacturing of the sports goods. It is said that the footballs all over the world are from Sialkot in 80% cases.
The footballs “brazuca” was also made in Sialkot. On the other hand all the sports gears are produced in Sialkot including jerseys. In the aspect of trading the Entrepreneurs and settled small scale businesses are included. These are wholesalers, retailers and distributors.
They are intermediaries between the producers and the consumers. Wholesalers are those who are directly linked with manufacturers and are the sellers to the retailers. They provide the product on cheaper rates. Then comes the distributors. They are the companies or people who are under contracts of the manufacturers. They basically provide services of moving the product towards the buyer. And at the end of this chain comes the retailers. They are those shopkeepers with whom the individual buyer deals.
Services include companies such as Network providers, IT industries, Education, Call center, Transportation and Hotel/Fast Food. These are the companies that provide assistance in different relations to their larger firms.Network providers in Pakistan that are supporting the SSI’s are the larger firms like ufone and Telenor etc. but also there are network providers like Fariya internet, connect internet, QUBEE, WATEEN etc who provide network assistance on cheaper rates.
IT industry today in Pakistan is developing on the pace that it never had achieved. The Arfa Kareem tower in Lahore is the biggest it teaching and developing hub in Pakistan. Whereas there are many other institutions that are developing the teaching and developing centres.
The private school systems are the main contributor in the education system. Private universities also are participating in it largely. Some of the prominent names include Beacon House, City school, LGS, KPS, IU, BU, FAST, NUST, IBA, LUMS, CBM etc.Call centre industry is mainly situated in Karachi where many of the Canadian, American, Japanese, Chinese and European campaigns have established their customer and marketing services.The transportation industry that situates is SSI is the by the means of roads. The bus travelling in Pakistan is highly appreciated by the lower class because of the high rates of air and rail travel. The hotel industry is spread all over Pakistan where anybody can have quality food on much cheaper rates. Boat basin, burns road, do darya, bahdarabad and sindhi muslim of Karachi are famous all over the country.
Advantages of these small scale industries are in different manner: Employment Generation, Balances regional growth, Mobilization of local resources, Export promotion, Consumer surplus Small scale industries are healthy employment providers. The uneducated and untrained employees are also hired in such industries which at least help them to run their basic needs. They are also trained and made the better art of the society. Such types of industries does not need a very high level set up built for their purposes that’s why they could operate in any remote areas as well. So the rural areas also could grow as well as the urban areas where the larger industries are in effect. The best example of this could be taken as the carpet industry because where the carpets are being made are very remote areas and resources there can’t be provided from the outer areas therefore they have to make their of resources there.
As these industries operate in both urban and rural areas the resources locally produced are also mobilized. For example the vegetables produced in the rural areas of Sindh are transported to the urban areas likely Karachi and Hyderabad. And from these urban areas the seeds and insecticides are moved there.
Same is the case of other goods too. These industries also produce such items that are recognized in the world. Like carpets, cotton, jewelry, fruits and wood items are demanded all over the world. Because of the low cost of production these industries sale their product at lower costs that provides a surplus to the consumers.Because of these industries total of 19.86% of GDP is produced by the SSI’s. According to the bifurcation of scope following is the contribution to the GDP Manufacturing 17.
73%, Trading 26.67%, Services 55.60% If we compare the contribution of these industries with different countries Bangladesh has more contribution as compared to Pakistan, India and SriLanka. This because of the small loans provided on the very low rate of intrust, by the Bangladesh government.