KARACHI, July 3: The government believes that the large scale manufacturing (LSM) sector would grow by 4 per cent in fiscal July/June 2001/02.

“On the basis of the large scale manufacturing in ten months to April 2002 we expect that LSM growth in fiscal 2001/02 would be around 4 per cent,” says a senior official of Federal Bureau of Statistics.

The government had initially targeted 5 per cent growth in LSM. But during the first three quarters (up to March 2002) large scale manufacturing grew by only 3.2 per cent eclipsing hopes of meeting the annual growth target.

The third quarterly report of the State Bank commenting on the LSM growth behaviour in nine months to March 2002 has attributed the declining trend mainly to after-effects of 9/11 and the US-led war against Afghanistan. But the report says that the prospect for the next fiscal year and beyond appears to be less discouraging.

The textile sector grew by 4.26 per cent in the ten months to April 2002 up from 2.74 per cent in a year-ago period.

Within the textile sector cotton cloth recorded the highest growth of 14.15 per cent up from 12.14 per cent a year ago, the latest estimates of the Federal Bureau of Statistics reveal.

FBS sources say the country produced about 460 million square metres of cotton cloth in July/April 2001/2002 up 14.15 per cent as compared to July/ April 2001. They say that May-June figures, that are still not out, would show the continuation of the trend.

Cotton cloth alone has a weightage of five per cent in overall large scale manufacturing sector. So a 14 per cent plus growth in this sub-sector of the economy has a significance in LSM growth that has been projected at 4 per cent for fiscal year 2001/2002.

Whereas cotton cloth grew impressively in ten months to April 2002, jute products; woollen and carpet yarn and knitting wool (all clubbed together) recorded a heavy 11.4 per cent decline in production. In the same period of last fiscal year this sub-group of textile sector had recorded a growth of about nine percent.

But since the above-listed items have a combined weightage of only about 1.5 per cent in LSM the big decline in their production would have a relatively low impact on large scale manufacturing.

The FBS sources say Pakistan produced about 65,000 tons of jute products; about 1680 tons woollen and carpet yarn and around 2770 tons of knitting wool in ten months to April 2002.

They say that cotton yarn that alone accounts for about 9 per cent of LSM showed a 4.5 per cent growth in ten months to April 2002 up from 2.7 per cent a year ago. The country produced about 1.5 million tons of cotton yarn in July/April 2001/2002.

In a sharp contrast to the impressive growth of cotton yarn the production of ginned cotton fell by a little more than one per cent in ten months to April 2002. In a year-go period this sub-group of the textile sector that has a weightage of 4 per cent in overall LSM had recorded an even bigger decline—4.5 per cent.

Food, beverages and tobacco sector having a weightage of more than 17 per cent in LSM recorded a growth of 9.80 per cent in ten months to April 2002 down from 11 per cent in a year-ago period.

Within this sector sugar production shot up by 13.4 per cent to some three million tons but vegetable ghee production fell by 5 per cent to a little less than 658,000 tons.

Another important sector that has a 7.8 per cent weightage in LSM is petroleum refining. This sector recorded an impressive growth of 17.7 per cent in ten months to April 2002 up from 16.9 per cent a year earlier. Industry sources say that the production of refined petroleum totalled around 8900 tons between July/ April 2001/02.

The pharmaceutical sector that accounts for 7.8 per cent of LSM also grew by 2.56 per cent during ten months to April 2002 up from 1.1 per cent a year ago. But fertilizer sector with a 5.8

per cent weightage rather recorded a decline of 0.2 per cent. A year earlier it had witnessed an impressive 13 per cent growth.