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FIVE YEAR PLAN SECOND (1960-1965)

FIVE YEAR PLAN, SECOND (1960-1965) One of the first moves made by the military government of President Muhammad Ayub Khan was to strengthen the Planning Commission Said Hassan, a senior civil servant, was appointed the commission’s deputy chairman and was given the responsibility for formulating the Second Five-Year Plan Muhammad Ayub Khan himself became the commission’s chairman The Plan did not put as much emphasis on poverty alleviation and increased social services as did the First Plan; the principal objective of the Second Plan was to accelerate the rate of economic growth It provided the theoretical underpinning for Muhammad Ayub Khan’s preoccupation with achieving rapid economic growth in the country without much concern for income distributionThe Plan envisaged a total outlay of Rs 29 billion (US$61 billion, at the rate of exchange then prevailing), of which 48 percent was to go to the public sector, 39 percent to the private sector, 10 percent for the Indus-basin replacement works, and 3 percent for rural works programs to be implemented by the local councils established under the system of Basic Democracies The largest amount of planned expenditure in the public sector was to be for the development of water and power (31 percent of the total), with transport and communications (22 percent) assigned the second highest priority Agriculture was to receive 14 percent of the outlay in the public sector; housing and settlements 13 percent; industries, fuels, and minerals another 12 percent The remaining 8 percent was to be spent on education, health, social welfare, and manpower development



These priorities reflected the martial-law government’s economic philosophy: to leave industrial development in the hands of private entrepreneurs and to get the state to improve physical infrastructure so that the private sector could function more efficiently The Plan succeeded in increasing the rate of economic growth well beyond the modest level achieved by the First Plan; Pakistan’s gross domestic product (GDP) increased at a rate of 52 percent per year during 1960-1965 With the rate of population increase greater than anticipated by the framers of the Plan, however, gross national product (GNP) per person increased by only 26 percent a year The Plan also narrowed the economic gap between East and West PakistanThe greatest success of the Second Five Year Plan was to discipline the use of public resources An institutional structure was put in place for the approval of public expenditure This structure allowed the representatives of different tiers of government and different “nation building” departments to participate in the process of public resource allocation

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