Sectoral Growth Rates and Efficiency of Factor Use in Large-Scale Manufacturing Sector in West Pakistan

Abstract

The large-scale manufacturing sector of Pakistan has grown at an annual compound rate of 14.3 percent1 over the period 1949-50 to 1969-70. However, one does not know the rates at which different sub-sectors of this sector have grown in the past. Similarly, earlier studies done for an analysis of this sector's efficiency were limited to calculations of effective protection rates [3,7,10] or of comparative cost ratios [2]. What has not been studied before is the magnitude of the change in the efficiency of factor use in Pakistan. The absence of such literature in Pakistan stems essentially from the non-avail¬ability of consistent and reliable time series data at a disaggregated level. Pakistan's censuses of manufacturing industries hereinafter referred to as CMI, carried out almost every year, do contain data at a disaggregated level, but those data suffer from a serious undercoverage. Since the magnitude of the undercoverage shows wide fluctuations, the data cannot be used for computing growth rates. In an earlier study [4]2 an attempt was made to construct a consistent time series of data relating to the large-scale manufacturing sector. The data reported were at current prices, which need to be deflated for compu¬tation of growth rates at constant prices