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Government Sponsored Corporations 1987-88.

The publication under review evaluates the performance of 69 Government Sponsored Corporations for the year 1987-88. In this publication, only those Corporations have been included in which the Federal Government has an interest. The Corporations controlled by the Provincial Governments or local bodies have not been included. All Corporations are defined as having been incorporated under the Companies Act, 1913 or under an Act or Ordinance of the Government of Pakistan.

In this publication an attempt has been made to cover large orgnaisations such as WAPDA and Port Qasim Authority. These are covered in a separate section but not in the aggregate results of all Corporations of WAPDA only Water Wing has been covered. It isn ot necessary for inclusion of a Corporation in this publication that the Federal Government has majority sharholding interest. Even with limited or no equity interest the Federal Government may effectively control management of Corporations through appointment of executive officers and directors. Such Corporations have also been included in this publication as the responsibility for efficient utilization of the resources employed rests with the Government through supervision.

The publication is prepared jointly by the Economic Adviser's Wing of the Ministry and the National Development Finance Corporation. The analysis is more about the prfoit and loss account of the Corporations rather than their contribution to the socio-economic system of the country. As such the National Development Finance Corporation is deeply involved in its preparations. The analysis covers the historical background of a Corporation, management, authorised, subscribed and paid up capital, profit and loss accounts, contribution to national exchequer, savings and investment and employment.

An effort was made by the Economic Adviser's Wing of the Ministry of Finance to cover maximum number of Corporations under the Federal Government. However, despite their efforts, 21 more Corporations, with whom correspondence was initiated could not be included due to the reasons as given below:

A) Proforma Submitted but not included as queries were not sorted out until Printing:

1) Morafco Industries Ltd.

2) Maqbool Company Ltd.

3) Pakistan Railway Advisory and Consultancy Ltd.

4) Northern Areas Transport Corporation.

B) Proforma Not Received:

5) Federal Chemicals and Ceramics Corporations Ltd.

6) Ghee Corporation of Pakistan Ltd.

7) Pakistan Automobile Corporation

8) Mechanized Construction of Pakistan Ltd.

9) National Construction Company (Pakistan) Ltd.

10) Gemstone Corporation of Pakistan Ltd.

11) Printing Corporation of Pakistan.

12) Pakistan Environmental Planning and Architectural Consultant.

13) Pakistan Tourism Development Corporation

14) Sargodha Vegetable Ghee and General Mills Ltd.

15) Crescent Factories Ltd.

16) Dargai Vegetable Oil Processing Industries.

17) Haripur Vegetable Oil Processing Industries.

18) Bara Vegetable Ghee Mills.

19) A&B Oil Industries Ltd.

20) Asaf Industries Ltd.

21) Makerwal Colleries Ltd.

In this way the situation becomes uncertain. The publication does not cover some very important Corporations and industrial units of public sector. MOst of the units not covered in this publication are of very important sectors such as manufacturing, mining and construction. One can say that an important portion of public sector Corporations is not covered in this publication.

An Overview

Overall performance of 69 Corporations/Units has been assessed in this publication for the year 1987-88. The assessment has been made in three ways, namely (i) Overall performance of all the 69 Corporations, (99) Sectoral Performance as 69 Corporations have been classified into 14 sectors, and (iii) A brief account of the performance of each Corporation. In addition, detailed statements of profit and loss accounts have been given in the publication.

According to the analysis of the publication, there was an improvement during 1987-88 over 1986-87 when the performance of 71 Corporations was analysed. Total pretax profit increased by about 175 per cent from less than Rs. 4 billion in 1986-87 to almost Rs. 11 billion in 1987-88. Post-tax profit increased by over 605 per cent from less than Rs. 1 billion in 1986-87 to Rs. 6.85 billion in 1987-88. Pretax return aggregate equity invested in 69 Government Sponsored Corporations was 13.4 per cent and post-tax return 8.4 per cent. In 1986-87, these were 5.66% and 1.38% respectively. Dividend rate, however, remained unchanged at 7.72 per cent. The contribution to Government exhequer as taxes and duties increased by about 36 per cent from over Rs. 3 billion to Rs. 4.10 billion during the same period.

Savings and Dissavings

By Sectors 1987-88
 (Rs. in billion)
Sectors Savings Dissavings
Commerce 1.35 --
DFI's & Specia-
lized Banks 1.22 --
Manufacturing 0.98 --
Commercial Banks 0.67 --
Power (KESC only) -- 1.61
Oil & Gas -- 0.95

The profit and loss accounts vary from one Corporation to another. As mentioned earlier, the Corporations have been classified into 14 sectors, of whcih 12 sectors were profitable earning pretax profit of Rs. 11.32 billion, while the remaining two sectors suffered total loss of Rs. 37 crore. This is an agreat improvement over 1986-87 when 9 out of 14 sectors earned pretax profit of Rs. 7.90 billion and remaining 5 sectors suffered losses of Rs. 3.91 billion. Following table shows a summary of profit and loss account of 69 Corporations by sectors in 1987-88.

Savings and investment has been a source of great anxiety in Pakistan and investments financed from indigenous sources must be increased. Overall position is not known but some facts are available by sectors. Some of the sectors generated net savings whiles some others met their investment requirements through borrowings. Following table shows some facts.

In 1987-88, value added generated by the Government Sponsored Corporations was Rs. 38.21 billion, 5.33% of GNP at market prices. In 1986-87, value added of GSC's was 4.47 of GNP. In 1987-88, wages and salaries were 40% of value added, pretax profit 29%, depreciation allowance 17% and interest 15%. Total employment in these Corporations was 271,770 agaisnt 270,137 in 1986-87. Wages and salaries increased from Rs. 12.91 billion to Rs. 15.38 billion.

To conclude it, the publication is quite interesting for businessmen, students of economics and accountancy, administrators and planners and all those conneceted with the socio-economic affairs of Pakistan.

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Article Details
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Author:Khan, Abdul Majid
Publication:Economic Review
Article Type:Book Review
Date:Feb 1, 1990
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