2013

Comparison between the

economies of Pakistan
and India

SUBMITTED BY:
WYZE SIDDIQI (13388)
EJAZ KHAN MARWAT (13657)
ANAS AYAZ (13615)
|

Table of Contents:
1.
2.
3.
4.
5.
6.
7.
8.
9.

Letter of Acknowledgement2
Abstract.3
Overview of Pakistans Economy4
Overview of Indias Economy.5
Statistical Comparison between the Two Countries.6
Cotton Industry.12
Agriculture...13
Some Major Statistics..15
Conclusion17

Letter of Acknowledgement
Dear Reader,

The following paper has been prepared as part of the course requirement for the course,
Pakistan Economic Policy taught at the Institute of Business Management, Karachi. The paper
has been submitted to Mr. Ashraf Janjua who himself is an expert in this field, served almost 10
years in the State Bank of Pakistan and other major Financial Institutions of the country.
Through whatever knowledge he has shared with us we have produced this paper and hope
that our efforts are appreciated and rewarded.
We hope that you enjoy going through this report and it serves as a useful analysis to your
understanding.
With Best Regards,
Sincerely,
Wyze Siddiqi
Ejaz Khan Marwat
Anas Ayaz

Abstract
The following report is critical analysis of the economies of Pakistan and India. The two nations
had taken existence in history at the same time. Since August 1947, both nations have made
sure to stay head to head with each other in every sector, fighting three wars in the first 24
years of independence. Today both countries possess nuclear warheads and play a major role in
the Indian Sub-Continent.
However, if we stick to the economical comparison, we see that Pakistan has lagged behind
India throughout the past 66 years, though both countries started with the same level of
economy. Till the 21st Century Pakistan wasnt very far away from India but after 2001
Pakistans economy had taken a U-turn and started lagging behind in many sectors of the
economy due to political instability and poor law and order situation that started to arise. The
situation, nonetheless was very much in hand until the last 6-7 years when Pakistans economy
had further worsened and now it has gone behind other developing countries such as
Bangladesh, Sri Lanka and Kenya.
The report will further put light upon major issues in the country and as to what actually
happened and the reasons behind it.

Overview of Pakistans economy

Decades of internal political disputes and low levels of foreign investment have led to slow growth and
underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of output and two-fifths of
employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a
viable export base for other manufactures has left the country vulnerable to shifts in world demand.
Official unemployment is under 6%, but this fails to capture the true picture, because much of the
economy is informal and underemployment remains high. Over the past few years, low growth and high
inflation, led by a spurt in food prices, have increased the amount of poverty - the UN Human
Development Report estimated poverty in 2011 at almost 50% of the population. Inflation has worsened
the situation, climbing from 7.7% in 2007 to almost 12% for 2011, before declining to 10% in 2012. As a
result of political and economic instability, the Pakistani rupee has depreciated more than 40% since
2007. The government agreed to an International Monetary Fund Standby Arrangement in November
2008 in response to a balance of payments crisis. Although the economy has stabilized since the crisis, it
has failed to recover. Foreign investment has not returned, due to investor concerns related to
governance, energy, security, and a slow-down in the global economy. Remittances from overseas
workers, averaging about $1 billion a month since March 2011, remain a bright spot for Pakistan.
However, after a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's
current account turned to deficit in fiscal year 2012, spurred by higher prices for imported oil and lower
prices for exported cotton. Pakistan remains stuck in a low-income, low-growth trap, with growth
averaging about 3% per year from 2008 to 2012. Pakistan must address long standing issues related to
government revenues and energy production in order to spur the amount of economic growth that will
be necessary to employ its growing and rapidly urbanizing population, more than half of which is under
22. Other long term challenges include expanding investment in education and healthcare, adapting to
the effects of climate change and natural disasters, and reducing dependence on foreign donors.

Overview of Indias economy

India is developing into an open-market economy, yet traces of its past autarkic policies remain.
Economic liberalization measures, including industrial deregulation, privatization of state-owned
enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and have
served to accelerate the country's growth, which averaged under 7% per year since 1997. India's diverse
economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of
modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture,
but services are the major source of economic growth, accounting for nearly two-thirds of India's
output, with less than one-third of its labor force. India has capitalized on its large educated Englishspeaking population to become a major exporter of information technology services, business
outsourcing services, and software workers. In 2010, the Indian economy rebounded robustly from the
global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% yearon-year in real terms. However, India's economic growth began slowing in 2011 because of a slowdown
in government spending and a decline in investment, caused by investor pessimism about the
government's commitment to further economic reforms and about the global situation. High
international crude prices have exacerbated the government's fuel subsidy expenditures, contributing to
a higher fiscal deficit and a worsening current account deficit. In late 2012, the Indian Government
announced additional reforms and deficit reduction measures to reverse India's slowdown, including
allowing higher levels of foreign participation in direct investment in the economy. The outlook for
India's medium-term growth is positive due to a young population and corresponding low dependency
ratio, healthy savings and investment rates, and increasing integration into the global economy. India
has many long-term challenges that it has yet to fully address, including poverty, corruption, violence
and discrimination against women and girls, an inefficient power generation and distribution system,
ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate
transport and agricultural infrastructure, limited non-agricultural employment opportunities,
inadequate availability of quality basic and higher education, and accommodating rural-to-urban
migration.

Statistical Comparison between the Two Countries

GDP (purchasing
power parity)

$4.761 trillion (2012 est.)

$4.579 trillion (2011 est.)
$4.25 trillion (2010 est.)
note: data are in 2012 US dollars

$523.9 billion (2012 est.)

$505.3 billion (2011 est.)
$490.4 billion (2010 est.)
note: data are in 2012 US
dollars

GDP - real growth

rate

6.5% (2012 est.)

7.7% (2011 est.)
11.2% (2010 est.)

3.7% (2012 est.)

3% (2011 est.)
3.1% (2010 est.)

GDP - per capita

(PPP)

$3,900 (2012 est.)

$3,800 (2011 est.)
$3,600 (2010 est.)
note: data are in 2012 US dollars

$2,900 (2012 est.)

$2,900 (2011 est.)
$2,900 (2010 est.)
note: data are in 2012 US
dollars

GDP - composition
by sector

agriculture: 17.4%
industry: 26.1%
services: 56.5% (2012 est.)

agriculture: 20.1%
industry: 25.5%
services: 54.4% (2012 est.)

Population below
poverty line

29.8% (2010 est.)

22.3% (FY05/06 est.)

Household income
or consumption by
percentage share

lowest 10%: 3.6%

highest 10%: 31.1% (2005)

lowest 10%: 3.9%

highest 10%: 39.3%
(FY05/06)

Inflation rate
(consumer prices)

9.3% (2012 est.)

8.9% (2011 est.)

9.7% (2012 est.)

11.9% (2011 est.)

Labor force

486.6 million (2012 est.)

59.21 million
note: extensive export of
labor, mostly to the Middle
East, and use of child labor
(2012 est.)

Labor force - by
occupation

agriculture: 53%
industry: 19%
services: 28% (2011 est.)

agriculture: 45.1%
industry: 20.7%
services: 34.2% (2010 est.)

Unemployment
rate

8.5% (2012 est.)

9.8% (2011 est.)

6.2% (2012 est.)

5.6% (2011 est.)
note: substantial
underemployment exists

Distribution of
family income Gini index

36.8 (2004)
37.8 (1997)

30.6 (FY07/08)
41 (FY98/99)

Budget

revenues: $169.4 billion

expenditures: $267.7 billion (2012 est.)

revenues: $27.48 billion

expenditures: $42.15 billion
(2012 est.)

Industries

textiles, chemicals, food processing,

steel, transportation equipment,
cement, mining, petroleum, machinery,
software, pharmaceuticals

textiles and apparel, food

processing, pharmaceuticals,
construction materials,
paper products, fertilizer,
shrimp

Industrial
production growth
rate

3.1% (2012 est.)

3.4% (2012 est.)

Agriculture products

rice, wheat, oilseed, cotton, jute, tea,

sugarcane, lentils, onions, potatoes;
dairy products, sheep, goats, poultry;
fish

cotton, wheat, rice,

sugarcane, fruits,
vegetables; milk, beef,
mutton, eggs

Exports

$298.4 billion (2012 est.)

$307.2 billion (2011 est.)

$24.63 billion (2012 est.)

$26.31 billion (2011 est.)

Exports commodities

petroleum products, precious stones,

machinery, iron and steel, chemicals,
vehicles, apparel

textiles (garments, bed

linen, cotton cloth, yarn),
rice, leather goods, sports
goods, chemicals,
manufactures, carpets and
rugs

Exports - partners

US 12.7%, UAE 12.3%, China 5%,

Singapore 5%, Hong Kong 4.1% (2012)

US 13.3%, China 10.9%, UAE

8.6%, Afghanistan 8.5%
(2012)

Imports

$500.4 billion (2012 est.)

$475.3 billion (2011 est.)

$39.81 billion (2012 est.)

$38.85 billion (2011 est.)

Imports commodities

crude oil, precious stones, machinery,

fertilizer, iron and steel, chemicals

petroleum, petroleum
products, machinery,
plastics, transportation
equipment, edible oils,
paper and paperboard, iron
and steel, tea

Imports - partners

China 11%, UAE 7.7%, Saudi Arabia 6.7%,

Switzerland 5.9%, US 4.9% (2012)

China 19.8%, Saudi Arabia

12%, UAE 11.9%, Kuwait 6.2%
(2012)

Debt - external

$376.3 billion (31 December 2012 est.)

$334.3 billion (31 December 2011 est.)

$56.19 billion (31 December

2012 est.)
$60.18 billion (31 December
2011 est.)

Exchange rates

Indian rupees (INR) per US dollar 53.437 (2012 est.)

46.671 (2011 est.)
45.726 (2010 est.)
48.405 (2009)
43.319 (2008)

Pakistani rupees (PKR) per

US dollar 93.3952 (2012 est.)
86.3434 (2011 est.)
85.194 (2010 est.)
81.71 (2009)
70.64 (2008)

Fiscal year

1 April - 31 March

1 July - 30 June

Investment (gross
fixed)

29.9% of GDP (2012 est.)

10.9% of GDP (2012 est.)

Public debt

49.6% of GDP (2012 est.)

49.8% of GDP (2011 est.)
note: data cover central government
debt, and exclude debt instruments
issued (or owned) by government entities
other than the treasury; the data include
treasury debt held by foreign entities;
the data exclude debt issued by
subnational entities, as well as intragovernmental debt; intra-governmental
debt consists of treasury borrowings from

50.7% of GDP (2012 est.)

49.4% of GDP (2011 est.)

surpluses in the social funds, such as for

retirement, medical care, and
unemployment; debt instruments for the
social funds are not sold at public
auctions
Reserves of
foreign exchange
and gold

$297.8 billion (31 December 2012 est.)

$297.9 billion (31 December 2011 est.)

$13.8 billion (31 December

2012 est.)
$18.09 billion (31 December
2011 est.)

Current Account
Balance

-$80.15 billion (2012 est.)

-$46.91 billion (2011 est.)

-$4.632 billion (2012 est.)

$268 million (2011 est.)

GDP (official
exchange rate)

$1.825 trillion (2012 est.)

$231.9 billion (2012 est.)

Stock of direct
foreign
investment - at
home

$229.2 billion (31 December 2012 est.)

$203.9 billion (31 December 2011 est.)

$22.72 billion (31 December

2012 est.)
$21.88 billion (31 December
2011 est.)

Stock of direct
foreign
investment abroad

$117.5 billion (31 December 2012 est.)

$108.8 billion (31 December 2011 est.)

$1.495 billion (31 December

2012 est.)
$1.432 billion (31 December
2011 est.)

Market value of
publicly traded
shares

$1.015 trillion (31 December 2011)

$1.616 trillion (31 December 2010)
$1.179 trillion (31 December 2009)

$32.76 billion (31 December

2011)
$38.17 billion (31 December
2010)
$33.24 billion (31 December
2009)

Central bank
discount rate

5.5% (31 December 2010 est.)

6% (31 December 2009 est.)
note: the Indian central bank's policy
rate - the repurchase rate - was 8%
during December 2012

12% (31 January 2012 est.)

14% (31 December 2010 est.)

Commercial bank
prime lending

10.63% (31 December 2012 est.)

10.19% (31 December 2011 est.)

12.41% (31 December 2012

est.)

10

rate

14.12% (31 December 2011

est.)

Stock of domestic
credit

$1.412 trillion (31 December 2012 est.)

$1.249 trillion (31 December 2011 est.)

$94.65 billion (31 December

2012 est.)
$86.76 billion (31 December
2011 est.)

Stock of narrow
money

$323 billion (31 December 2012 est.)

$305.7 billion (31 December 2011 est.)

$62.29 billion (31 December

2012 est.)
$56.34 billion (31 December
2011 est.)

Stock of broad
money

$1.451 trillion (31 December 2012 est.)

$1.293 trillion (31 December 2011 est.)

$76.16 billion (31 December

2011 est.)
$71.36 billion (31 December
2010 est.)

Taxes and other

revenues

9.3% of GDP (2012 est.)

11.9% of GDP (2012 est.)

Budget surplus (+)

or deficit (-)

-5.4% of GDP (2012 est.)

-6.3% of GDP (2012 est.)

Unemployment,
youth ages 15-24

total: 10.2%
male: 9.8%
female: 11.5% (2010)

total: 7.7%
male: 7%
female: 10.5% (2008)

GDP composition, by
end use

household consumption: 56.9%

government consumption: 11.8%
investment in fixed capital: 29.9%
investment in inventories: 8.4%
exports of goods and services: 24.3%
imports of goods and services: -31.3%
(2012 est.)

household
consumption: 87.3%
government
consumption: 8.3%
investment in fixed
capital: 10.9%
investment in
inventories: 1.6%
exports of goods and
services: 12.5%
imports of goods and
services: -20.6%
(2012 est.)

11

Gross national
saving

27.9% of GDP (2012 est.)

30.1% of GDP (2011 est.)
31.9% of GDP (2010 est.)

11.1% of GDP (2012 est.)

11.9% of GDP (2011 est.)
14.6% of GDP (2010 est.)

12

Cotton Industry
Among Pakistan, China, Mexico (America), Peru and Egypt countries which have been reported as the
ancient homes of domesticated cotton, Pakistan is now considered perhaps the oldest home of cotton
and textile.
In early 1960s, some French Archeologist excavated the areas in Pakistans province of Baluchistan and
found a city in Kuchhi district near district city Dhadher which was named as Mehergarh.There, they
found traces of cotton and pieces of cotton cloth.
In other words, Pakistan was born as a cotton exporting country (surplus cotton country) and India was
born as cotton importing country (cotton deficient country).Initially, Pakistan started working on the
goal of increasing its spinning capacity and then on increasing its cotton production and consumption
simultaneously while Indias initial goal was to increase its cotton production to attain self-sufficiency in
cotton consumption and later increase cotton production and consumption simultaneously.After
working hard for 25 years from independence, India achieved success in 1971-72 when it attained selfsufficiency in cotton consumption by producing 7.41 million 170-Kg bales against its domestic cotton
consumption of 6.851 million bales; surpassing cotton consumption by more than half a million bales
with lint yield at Kgs 162 per hectare and harvested area at 7.8 million hectares.In 1971-72 season,
Pakistans production stood at 4.159 million 170-Kg bales against domestic consumption of 2.542 million
170-Kg bales with lint yield at Kgs 360 per hectare.
India enjoyed the state of self-sufficiency for 32 years from 1971-72 to 2002-03 when it maintained its
production level a trifle over consumption level but from 2003-04 season, India increased its cotton
production by adopting new seed technology of Genetically Modified Organism (GMO) and got very
encouraging results.As such, India increased its production from 14.0 million 170-Kg bales in 2003-2004
to 33.28 million 170-Kg bales in 2010-11 season an increase of 136.0 % in 8 years period by increasing
lint yield from 399 in 2003-04 to Kgs 514 per hectare in 2010-11 and increasing cotton area by only
about 44%.
After maintaining its self-sufficiency after, 1971-72, India tried hard to become a real cotton exporting
country but it coulf not be possible before 2002-03 when it used GMO technology for boosting its cotton
production.Thus from 2003-04 season it changed its status from being a long time cotton importing
country to a prominent cotton exporting country securing second largest position in the world after US.
In 2007-08, India exported ever highest 9.6 million 170-Kg bales and its average cotton exports of last 8
years is 3.89 million 170-Kg bales which is very impressive.Pakistan has enjoyed its status as a prominent
cotton exporting country for about 45 years from 1947-48 to 1992-93 achieving the highest export
performance of 4.838 million 170-Kg bales (=3.780 million 480-lb bales) in 1988-89.
While comparing the performances of two neighbour countries viz: Pakistan and India, one finds that
India performed better than Pakistan when its cotton increased by 488 % in 41 years and 1,231 % in 64
cotton seasons whereas Pakistan improved its cotton production by 252 % in 41 years and by 870 % in
64 years.Detail of above tables reveal that Indian cotton production geared up remarkably after 2003
when India adopted GMO technology , it has increased its yield more than 70 % and production by 100
% in 8 years up to 2010-11.

13

Agriculture
Agriculture is the backbone of Pakistan's economy, but inspite of the favourable conditions of soils and
climate, the yield per unit area is low and is nearly half of the yields achieved in India having the similar
climatic conditions. Low yields are mainly attributed to salinity/sodicity, improper use of fertilizer,
inadequate water supplies, insects and pests diseases, poor farm land and water management practices.
Most of our agriculturally productive land falls in the arid and semi-arid climatic regions therefore, the
success of agriculture mainly depends upon the surface irrigation. The pressure brought upon to each
nation to feed more people have increased the significance of food production in arid and semi-arid
regions, which constitute one third of the area of the globe. In India about 75% of the food grains
annually, produced in that country. In Pakistan, 80% of its total land area of 79.61 mha or about 25% of
its cultivated of 20.43 mha is rainfed. Both Pakistan (7,960,96 sq. kilometers) and India (3,287,782 sq.
kilometers) are agricultural countries. Pakistan is comprised of 4 provinces, whereas in India, these are
22 provinces. In Pakistan, the provinces of Punjab, NWFP and Sindh are used to produce the maximum
quantities of food grains. Similarly, in India, the provinces of Punjab, U.P., C.P., Behar etc. are mostly
fertile and produce huge quantities of food grains for their population. The provinces of the Punjab of
the two countries are very fertile and have significant contributions in the agricultural productivity of
the both countries. They are situated adjacent to each other and there is only a demarcation line
dividing the two provinces from each other countries.
The total geographical areas of Pakistani Punjab are 79284 sq miles and that of Indian Punjab are 19,450
square miles, respectively. Thus, our area is about 4 times greater than that of Indian Punjab. Yet, the
Indian side produces more and feeds almost the entire nation of 950 million. Similarly, 69.5 percent and
85.2 percent of the total areas of Pakistan and Indian Punjab are under cultivation. Cropping potentiality
is also substantially higher in Indian Punjab as compared to Pakistan Punjab. Irrigation systems in Indian
Punjab is far better than the Pakistani Punjab. However, the Pakistani Punjab has an extensive system of
canals covering distance of 59000 kilometers, which have converted large areas that were formerly
desert wastes into prosperous agricultural settlements. Wheat and cotton are the principal crops, where
rainfall or irrigation are sufficient throughout the year for the crops. Millet and gram are the chief crops
in the drier western part of the province. It has been reported that in 1995, there were 860,000 tubewells in the Indian Punjab, while in Pakistani Punjab in 1994, there were 342000 tubewells. In addition,
more than 80 percent tube-wells in Indian Punjab are electrically operated in comparison to only 24
percent in Pakistani Punjab. These differences in the operational patterns of the agricultural implements
have great impact on the agricultural development of the two provinces. In 1994, there were 1,30,000
tractors in Pakistan Punjab compared to 3, 20,000 in the Indian one. The cultivated land tractor ratio is
13.40 hectares as compared to that of 93 hectares in Pakistani Punjab.
The per hectare uses of all the fertilizers were 96 kgs in Pakistani Punjab compared to 157 kgs in Indian
Punjab in 1994. Application of more fertilizer is required more operational tube-wells, because the
commitment of adequate and timely irrigation water through the tube-wells allows more effective use
of fertilizers in Indian Punjab. While, the insufficient availability of water and major dependency on
canal water restricted to a great extent the quantity of use of the required fertilizers in our side. The
agricultural extension services have significant role to play in the use of weedicides which shows the

14
uniform crop stands free from the menace of weeds. The infestation of weeds in almost all the
economical crops has now become a real menace at the common farm level, especially due to multiple
cropping in the present day farming. Different weeds, which are very similar to the main crop plants are
difficult to control by using manual hand hoeing/hand removal. The use of weedicide is very effective in
the control of weeds. Indian Punjab farmers, use about 60 percent of the total herbicides consumed in
India, of which main parts goes to wheat and rice crops. In Pakistani Punjab, the use of weedicide is very
little both on wheat and rice crops. The use of manual weeding is also negligible. Time of sowing is an
important factor which influences the yield obtained by the farmers. Work done in Indian Punjab has
shown that delay in sowing of wheat by about a week causes yield reduction of 3/4 quintals/hectare.
Similarly, work done in Pakistani Punjab has sowing of wheat substantially reduced crop yield i.e. each
day of delay in wheat sowing after third week of November, produces less wheat yield of 35-40 kgs per
hectare.
In Pakistani Punjab a major proportion of wheat is sown late. Wheat sowing continues till early January.
In Indian Punjab, wheat follows coarse rice, where over 90 percent area is under early maturing coarse
rice varieties. In this way, the whole area of wheat is utilized in cultivation.
Table 1. Area, Production and yield of different crops in 1981-82

Crops

Pakistani
Punjab

Indian
Punjab

Area Prod.

Yield Area Prod.

Yield

(000 (000
ha) tons)

(kg/
ha)

(kg
ha)

Wheat

5167 7962

1541 2917 8553

2932

Rice

1088 1450

1333 1270 3755

2957

(000 (000
ha) tons)

Sugarcane 670 23,733 35422 109

5910

Cotton

193.46 347

1506 474

315

557

54220

From the above table, the differences in the areas and the crop yields of
two provinces are clear and lucid.

15

Some Major Statistics

Indian Agriculture
stats
Agricultural growth
Arable and permanent cropland

Arable land > hectares

Arable land > % of land area
Area > Rice
Banana production
Cereal production
Cotton exports
Cotton production
Fertilizer use
Food production index
Grains > Rice production
Grains > Wheat consumption
Grains > Wheat production
Labor share
Meat production

Pakistani Agric
stats

121

129

Ranked 46th.

Ranked 25th. 7% more than India

169,700 thousand hectares

21,960 thousand hectares

Ranked 3rd. 7 times more than Pakistan

Ranked 15th.

159,650,000 hectares

21,275,000 hectares

Ranked 2nd in 2005. 7 times more than Pakistan

Ranked 9th in 2005.

53.7 % of land area

27.6 % of land area

Ranked 4th in 2005. 95% more than Pakistan

Ranked 20th in 2005.

42,400,000

2,460,000

Ranked 1st. 16 times more than Pakistan

Ranked 11th.

11,000,000 metric tonnes

95,000 metric tonnes

Ranked 1st. 115 times more than Pakistan

Ranked 42nd.

121 thousand metric tons

129 thousand metric tons

Ranked 46th.

Ranked 25th. 7% more than India

50 thousand bales

100 thousand bales

Ranked 35th.

Ranked 23rd. 100% more than India

12,500

8,350

Ranked 3rd. 50% more than Pakistan

Ranked 4th.

98.6 kg

135.1 kg

Ranked 43rd.

Ranked 29th. 37% more than India

104.7 %

110.6 %

Ranked 103rd in 2004.

Ranked 55th in 2004. 6% more than India

89,000 thousand metric tons

4,500 thousand metric tons

Ranked 3rd. 19 times more than Pakistan

Ranked 13th.

69,000 thousand metric tons

18,750 thousand metric tons

Ranked 4th. 3 times more than Pakistan

Ranked 7th.

67,000 thousand metric tons

18,200 thousand metric tons

Ranked 4th. 3 times more than Pakistan

Ranked 9th.

59.2%

46.6%

Ranked 38th. 27% more than Pakistan

Ranked 51st.

4,604 thousand metric tons

2,083 thousand metric tons

Ranked 7th. 121% more than Pakistan

Ranked 18th.

Tractors

1,525,000

320,500

value added > current US$ (per

capita)

122.8 $ per capita

16

Conclusion

17
After critically analyzing the two economies we have reached a conclusion where we see the Pakistan
economy nowhere near to Indias. India is excelling towards becoming one of the superpowers of the
world while Pakistan is lagging behind in many sectors of the economy mainly due to corruption,
political instability and law and order situation in the country.
Interestingly, many economists have tried to compare the economies of the two over the years without
realizing that there is no comparison or match at all, if we look at the relevant statistics.
To quote just one example of this very sharp contrast, according to a March 21, 2013 report of the
Indias widely-watched NDTV, the total Indian Software, Technology Enabled Services (ITES) and
Business Process Outsourcing (BPO) exports during 2011-12 were estimated at $68.02 billion.
Now, this $68.02 billion figure of Indian software exports alone is over 2.5 times higher than Pakistans
net export figure of around $25 billion! In 2013-14, this figure for Indian ITES and BPO exports is likely to
cross the $75 billion mark.
Indias 138-year old Bombay Stock exchange is the 11th largest bourse in the world by market
capitalisation as of 31 December 2012. Its market capitalisation stands at $1,263 billion, behind New
York Stock Exchange ($14,085 billion), the New York City-based National Association of Securities
Dealers Automated Quotations or NASDAQ ($4,582 billion), the Tokyo Stock Exchange ($3,478 billion),
the London Stock Exchange ($3,396 billion), the Amsterdam-based European Electronic Stock Exchange
or the Euronext ($2,930 billion), the Hong Kong Stock Exchange ($2,831 billion), the Shanghai Stock
Exchange ($2,547 billion), the Toronto Stock Exchange ($2,058 billion), the Frankfurt Stock Exchange
($1,486 billion) and the Australian Stock Exchange ($1,386 billion) followed by $1,263 billion of Bombay
Stock Exchange.
On the other hand, Pakistans Karachi Stock Exchange, having over 650 listed companies otherwise, is
nowhere in sight in the list of 25 largest global bourses. The Market Capitalisation of Karachi Stock
Exchange had stood at a dismal $53.3 billion approximately on May 28, 2013.
Remember, by 2030, India will become the worlds third largest economy with projected Purchasing
Power Parity GDP at $13,716 billion.
According to the latest CIA World Fact Book, the economy of India is the fourth largest in the world with
a Purchasing Power Parity GDP of $4,735 billion. The IMF says it is the 3rd largest.The same source says
Pakistan has the 28th largest economy in the world with a Purchasing Power Parity GDP of just $514.6
billion!
India happens to be the worlds 18th largest exporter with total exports resting at $309.1 billion, as
compared to Pakistans figure of $24.66 billion. Pakistan is worlds 71st largest exporter.
So, one can see that the Indian export sector is miles ahead of the Pakistani industries that sell their
goods abroad.On the import front, India currently happens to be 9th biggest global importer as it buys
goods worth $500.3 billion from other countries.
Pakistan stands at number 61 with imports valued at $40.82 billion.As far as the GDP real growth rate,
or the measure of the rate of change that a nations Gross Domestic Product experiences from one year
to another, is concerned, India ranks 50th in the world with 5.4 per cent acceleration. Pakistans GDP
real growth rate is just 3.7 per cent, making it stand at number 93 among the comity of nations.

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The Indian external debt rests at $ 299.2 billion, making it the 30th most indebted nation.Pakistan is the
57th most indebted nation with external debt of $ 55.98 billion (according to the under review CIA
World Fact Book report), though the countrys foreign debt obligations have touched the $60 billion
figure due to rupees recent worsening parity vis--vis the American dollar.
India has a $256.6 billion stock of Foreign Direct Investment (FDI) at home, which helps it stand as the
21st most sought after nation by international businessmen having off-shore investments.
In Pakistans case, this figure of FDI at home rests at just $22.38 billion, meaning thereby that the
terrorism-rocked country is the 69th most preferred destination by global investors.As far as the stock of
FDI abroad is concerned, India stands at 28th position with off-shore investments worth $121.3 billion.
In this regard, Pakistan stands at 72nd rank with international investments valued at $1.482 billion only.
The current value of Indian Forex and Gold reserves is $287.2 billion (10th global rank).
Pakistan has Forex and Gold reserves to the tune of $13.5 billion only or the 68th highest in the world.
Having a mammoth labour force made up of 498.4 million humans, Indias GDP per capita stands at
$3,900 only or 164th highest in the world. GDP per capita of a country is calculated by dividing its Gross
Domestic Product by its midyear population.
Pakistan has even worse figures as its GDP per capita is a paltry $2,900, placing it at 175th position.
Pakistan, by the way, has the 10th largest labour force comprising of 60.36 million people.
Having an unemployment rate of 9.9 per cent (rank 108th), Indias budgetary revenues are estimated at
$171.5 billion and its taxes and other revenues constitute 8.8 per cent of its GDP (rank 209).
In Pakistans case, the unemployment rate is relatively better at 5.6 per cent (rank 55th), its budgetary
revenues are estimated at $29.51 billion and its taxes and other revenues constitute 12.8 per cent of its
GDP (rank 201).
However, India had stood at 132nd position out of 187 countries on the gender inequality index of the
United Nations Development Programmes Human Development Report 2013, hence performing worse
than Pakistan (123rd position).
The gender inequality index measures the loss in a countrys progress and human development because
of gender inequality in three sectors: reproductive health, women empowerment and labour market
participation.
According to CIA World Fact Book 2013, India is one of the fastest growing retail markets in the world
by economic value.
The Indian retail industry is estimated to be $450 billion. It ranks second worldwide in farm output and
is the largest world producer of milk, jute and pulses.
India has the worlds third largest road network, covering more than 4.3 million kilometers and carries
60 per cent freight and 87 per cent passenger traffic.
Indian Railways is the fourth largest rail network in the world, with a track length of 114,500 kilometers.

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The country has a national Tele-density rate of 74.15 per cent with 926.53 million telephone subscribers.
Over half of Indias population is below 25 years and by 2020, the average age of an Indian is expected
to be 29 years.
According to the German global banking and financial services company, the Deutsche Bank, Indias
working-age population will increase by 240 million over the next two decades.
The production of passenger vehicles in India was recorded at 3.23 million in 2012-13 and is expected to
grow at a Compound Annual Growth Rate (CAGR) of 13 per cent during 2012-2021, as per data
published by Automotive Component Manufacturers Association of India.
Then, with 155,618 post offices and paying over 566,000 employees, India has the largest postal
network in the world.
The countrys domestic airlines carried 20.289 million passengers during January and April 2013. Its
aviation sector has attracted Foreign Direct Investment worth $449.26 million from April 2000 to March
2013.
In sharp contrast, we all know that the Pakistan international Airlines (PIA) is currently a white
elephant, being fed by the exchequer for years now.
Indias Rs77 trillion banking industry has 87 scheduled commercial banks, 26 public sector banks, 20
private banks and 41 foreign banks.
Although it doesnt compare in any way to the flourishing Indian economy, Pakistan too has a few good
things to be cited as references.
For example, according to the United Nations Food and Agriculture Organization, Pakistan is the largest
producer of Ghee, the 2nd largest producer of Chickpeas, the 4th largest producer of Apricot, Cotton
and Sugarcane, the 5th largest producer of Milk and Onion, the 6th largest producer of Date Palm, the
7th largest producer of Mango, the 8th largest producer of Tangerines, Mandarin orange and Rice, the
9th largest producer of Wheat and the 10th largest producer of Oranges.