The Age of Reforms

Mr. Zulfikar Ali Bhutto in his very first speech on the night of 20 December, 1971, declared that he would introduce various reforms and would come down with a heavy hand on corruption: his declared objective being to put the social and economic system right. The reforms introduced by the People’s Government reflect a radical change in respect of the organization of the social and economic systems.

Reforms Reflect Radical Change

The process of economic reforms speedily carried out has prepared the economy to channel the gains in production towards meeting the essential requirements of the people. Main elements of the new economic system as it had emerged include organization of agriculture on the basis of large number of small and medium size holdings within a prescribed ceiling; legal protection to the rights of the tenants where tenancy system may persist; public management of basic industries; the acceptance of the principle that by and large basic industries would be developed under public management; public sector direction of credit facilities; improvement in the bargaining strength of the labour with assured rights and universal access to basic facilities like health and education to remove handicaps which prevent individuals from participating in the economic activity to the best of their ability. These institutional changes together with the remolding of economic policies to satisfy basic needs of the common man rather than greed of the privileged few were designed to blaze a new trail of economic progress.

1. Land Reforms

   The Land Reforms of 1972 have restricted the individual holdings to 150 acres of irrigated and 300 acres of un-irrigated land. The excessive land holdings were taken over by the without paying compensation. Due to these measures agricultural land resumed thus far is over 800,000 acres.

   
    

2. Labor Reforms

   Comprehensive labor reforms were introduced by the Government in July 1972 and further elaborated and enlarged in August 1972 after threadbare discussions and analysis at a Tripartite Labour Conference at Islamabad.They guarantee to the workers their long over due fundamental rights of freedom of association and collective bargaining, and assurance of greater security of service; representation in management, group-insurance, old age pension, free education for children and housing and medical facilities. These laws are now also operative in the centrally Administered Tribal Areas. These reforms have paved the way for a new workable relationship between the employers and employees for the future.

    

3. Industrial and Corporate Reforms

   Ten basic industries were immediately taken over by the Government. These include iron and steel, basic metal industries, heavy engineering, heavy electrical industries, petro-chemical industries, cement industries, public utilities and power generation, transmission and distribution, gas and oil refineries.

    

4. Economic Reforms Order

   An Economic Reforms Order promulgated in January 1972 removed the Boards of Directors and managing Agencies of 20 big industries. A little later 11 industrial units were added to the list. Again, very recently, to avoid hardship and sufferings to the common man, the Government has taken over the vegetable oil industry. Managing Agency system has been done away with. To manage and control the taken over units, Board of Industrial Management was constituted, which implements the policy directives of the Government and has successfully put these industries on an even keel. At present only about 18 per cent of industries are under the public sector. There is thus still greater scope for the private sector to participate and expand the national economy.

    

5. Banking Reforms

   The primary aim of the Banking Reforms is to subject the commercial banks to an elaborate system of social control. Specifically they aim at bringing about equitable distribution of bank credit and also ensure greater social accountability. To achieve this goal, a National Credit Consultative Committee was formed which formulated a Rs. 1,560 million bank credit plan for the private sector in respect of small loans for low cost housing and advances for agricultural production.

    

6. Exchange Reforms

   Since 1959 multiple rates of exchange in the shape of Bonus Vouchers Scheme had been followed in the country on account of which the industrial sector thrived, whilst the common man suffered. The Exchange Reforms announced in May 1972 brought realism to the external value of our currency and also made it impossible for big business to obtain unearned income from foreign exchange. Pakistani travelers and pilgrims have also benefited from this and in 1972, 80,000 pilgrims performed Hajj. Above all, Pakistan earned 33 million dollars in foreign exchange with the result that her balance of payments has shown remarkable signs of improvement.

    

7. Education Reforms

   On 15 March 1972, the New Education Reforms were announced. They envisage universal and free education up to class (x) throughout the country in three phases. Under this scheme all educational institutions are to be nationalized. These institutions are now open to gifted students from all over the country without regard to their financial status and social background. So far about 400 colleges and several schools have been nationalized in the provinces of Sind and the Punjab. The college teachers have also been given a respectable position in society.

    

8. Health Reforms

   This was the most neglected sector independence. No health scheme could succeed because the common man did not have the means to meet the cost of drugs. To obviate this, it was necessary as a first step to make medicines available within the reach of the common man by bringing down the prices and rationalizing their means. To achieve this goal, an act called the Drug act, 1972, was enacted which prohibited the manufacture and import of any drugs under brand names after 23 December, 1972 and their sale after 31 March, 1973.

    

9. Law Reforms

   In a historic declaration bringing to an end the notorious and outdated British system conferring on District officers the power of both judiciary and executive, Mr. Zulfikar Ali Bhutto announced the separation of the judiciary from the executive. Under these reforms the legal procedures have been simplified, rights and duties have been clearly defined and criminal litigation made more liberal which meet the long felt needs and cherished desires of the people.

   

Credit Guarantee Scheme

A Credit Guarantee Scheme under which the State Bank of Pakistan will share with the commercial banks on 50: 50 bases any bona fide losses is also under operation.

Life Insurance Nationalized

By a Presidential Order of 19 March 1972, 32 life Insurance companies were nationalized. This sweeping move was aimed at removing the interlocking of life insurance with private ownership of major industrial groups. The life Insurance Corporation established in November 1972 has a paid up capital of Rs. 10 million. Since then, life insurance has gained momentum.

Policy Holders Benefited

Major benefits extended to policyholders include reduction of premium for all old and new policies and maximization of yield on life fund investment portfolio consistent with security.

Publication of Pharmacopoeia

To streamline the Health Reforms as also to ensure their implementation, the Pakistan Pharmacopoeia is being published and the Drugs Control Administration is being improved. Emphasis is also being placed on medical education. Medical colleges in Karachi, Larkana, Quetta, Lyallpur and Rawalpindi are being established.

Integrated Rural Development Programme

This programme was launched in July 1972. It encompasses the entire spectrum of village life with the ultimate aim of improving socio-economic conditions of the people. Its major objectives are to stop polarization of rural society, establishment of effective rural institutions and maximization of agricultural production through the increased employment of the rural masses.

Allocation

So far 68 development centers have been established. In 1972-73 Rs. 3 million were allocated to the Punjab, Rs. 5.5 million to Sind, Rs. 2.5 million to Balochistan and Rs. 1.5 million to N.W.F.P. As the programme has shown encouraging results the allocations have been increased during the year 1972-73. Rs. 6 million have been allocated to the Punjab and Rs. 5.5 million to Sind. Allocations to N.W.F.P and Balochistan will be made on receipt of their revised demands. By 1975 the programme is expected to cover the entire country.

Agrovilles

It is a well-known fact that rural areas suffer from an inadequacy of essential services and facilities. To meet this challenge, the answer was identified in the establishment of agrovilles. In more specific terms it means the development of relatively self-contained new urban settlements with a balanced range of essential public service, socio-economic and cultural facilities. The Government attaches great significance to the establishment of a chain of agro-based industries, which would give a fillip to the rural economy of the country. In 1972-73, an amount of Rs. 3 million was allocated for the programme. Since the programme has gained rapid momentum a sum of Rs. 7 million has been allocated during the year 1973-74.

People’s Works Program

To improve the life of a common people in both urban and rural areas, the Government has launched a massive people’s works programme which seeks to harness the country’s vast manpower resources in their spare time, of course with due compensation, mostly in kind, on projects. During 1972-73 allocation for the programme amounted to Rs. 220.3 million (Rs. 140 million for the Punjab, Rs. 11 million for N. W. F.P., Rs. 47.5 million for Sind and Rs. 8.8 million for Balochistan). The Federal Government spent Rs. 13 million on schemes in Azad Kashmir and the Northern Areas. This programme also envisages to provide 450,000 residential plot units in the Punjab and Sind. Asphalted and unasphalted roads will also be constructed which would provide facilities to the farmers to market their good and reduce the margin of profit of the middleman. The allocation for 1973-74 is Rs. 18 million.

National Volunteer Development Programme

Launched in May 1973, its object is to provide interim employment to the jobless scientists, engineers and technicians and also to arrest the brain drain. It is expected that this programme will channelise the energies of 20,000 young technocrats who, in turn, would also help to impart basic training to individuals who are needed to run the people’s Works Programme, the IRDP and Agrovilles.

New Look For Policemen

On 12 April 1972 the Police Reforms were announced. These provided better training facilities, better conditions of service and more professional integrity as a result of better standards of appreciation of good work done.

Revolution in Services

The Administrative reforms announced on 20 August 1973, are truly revolutionary in nature. The Prime Minister at one stroke struck down the prevalent East India Company’s administrative structure by abolishing all service cadres and classes and replaced them with a unified structure. By integrating all the services, the reforms eliminate the divisive and recriminatory categorization within the bureaucracy. They not only discarded the unquestioned pre-eminence of seniority and standing over merit, but also rejected the superiority of the generalists over the professionals. Scientists and technologists now have the opportunity to come up to their rightful places in public administration and policy making. There will be a complete new breed of administrators, trained at the highest levels of professions and fully aware of all the constraints of public service.

Administrative Tribunal

An Administrative tribunal has also been set up as a forum for the redressal of individual officials, which would assure them that no arbitrary action would be taken against them. The Administrative Reforms Committee is fully seized of the problems –such as delimitation of power and responsibilities between different officials and is giving final touches to a new and healthy code of civil service rules. Socio-Economic reforms have served in general to define the contours of a mixed economy. The administrative reforms have on the other hand cleared the decks for a clean and stable administrative system, which in the past was responsible fro thwarting the progressive outlook of the professionally qualified technocrats. The restoration of democracy in the country and the enforcement of the new constitution signify a new era in Pakistan’s history. It can now rightly be assumed that a good beginning has been made which would undoubtedly lead the country towards stability, progress and prosperity.