The province of Punjab is the largest in the country both in terms of population and size of the
economy. It accounts for almost 60 percent of Pakistan’s annual production of goods and services and
55 percent of its population. 1 Since partition, Punjab has arguably been the most economically
dynamic and vibrant province contributing significantly to the national economy. However, in the past
five years GDP growth in the province decreased alarmingly and now has stagnated to an anaemic 2.5
percent. During the last decade the Gross Provincial Product (GPP) of Punjab grew at an average of
5.5 percent, slightly higher than the 4% growth rate of the Gross Domestic Product (GDP) of the
country. 2
The growth performance of Pakistan has been in tandem with that of Punjab indicative of
the fact that the country’s economic health is inextricably linked to its largest province.
3
As
industrialization is imperative for income and employment generation and is a necessary condition for
sustained economic growth and development, the performance and issues facing Punjab’s industry
need to be analyzed in order to address the problem of low growth in the province in particular and
the country in general.