Economy of Punjab is based on Agriculture, Industry, and Manpower.

The economy of Punjab, Pakistan is one that is largely based on agriculture and industry. Punjab is the largest province of Pakistan in terms of population, and also has the largest and fastest-growing economy in the country compared to other provinces and administrative units.

Punjab's economy has quadrupled since 1972. Its share of Pakistan's GDP was 54.7% in 2000 and 59% as of 2010.

It is especially dominant in the Service & Agriculture sectors of Pakistan Economy. With its contribution ranging from 52.1% to 64.5% in the Service Sector and 56.1% to 61.5% in the Agriculture Sector.

It is also a major manpower contributor because it has the largest pool of professionals and highly skilled (Technically trained) manpower in Pakistan.

It is also dominant in the Manufacturing sector, though the dominance is not as huge, with historical contributions ranging from a low of 44% to a high of 52.6%.

In 2007, Punjab achieved a growth rate of 7.8% and during the period 2002-03 to 2007-08, its economy grew at a rate of between 7% to 8% per year and during 2008-09 grew at 6% against the total GDP growth of Pakistan at 4%.

Despite lack of a coastline, Punjab is the most industrialized province of Pakistan; its manufacturing industries produce textiles, sports goods, Heavy machinery, electrical appliances, surgical instruments, Cement, Vehicles, Auto Parts, I.T, metals, Sugar mill plants, Cement Plants, Agriculture Machinery, bicycles and rickshaws, floor coverings, and processed foods.

In 2003, the province manufactured 90% of the paper and paper boards, 71% of the fertilizers, 69% of the sugar, and 40% of the cement of Pakistan.

Despite its a tropical wet and dry climate, extensive irrigation makes it a rich agricultural region. Its canal-irrigation system established by the British is the largest in the world. Wheat and cotton are the largest crops. Other crops include rice, sugarcane, millet, corn, oilseeds, pulses, vegetables, and fruits such as Kinoo. Livestock and poultry production are also important. Despite past animosities, the rural masses in Punjab's farms continue to use the Hindu calendar for planting and harvesting.

Punjab contributes about 76% to annual food grain production in the country. Cotton and rice are important crops. They are the cash crops that contribute substantially to the national exchequer. Attaining self-sufficiency in agriculture has shifted the focus of the strategies towards small and medium farming, stress on barani areas, farm-to-market roads, electrification for tube-wells, and control of waterlogging and salinity.

Punjab has also more than 68 thousand industrial units. The small and cottage industries are in abundance. There are 39,033 small and cottage industrial units. The number of textile units is 14,820. The ginning industries are 6,778. There are 7,355 units for the processing of agricultural raw materials including food and feed industries.

Lahore and Gujranwala Divisions have the largest concentration of small light engineering units.

District of Faisalabad is famous for Textile products.

District of Jhang has the largest Wheat & Sugar cane production share with the maximum number of floor and sugar-producing industries.

The district of Sialkot excels in sports goods, surgical instruments, and cutlery goods.

The district of Chiniot is famous for its more specialized furniture industry.

Punjab is also a mineral-rich province with extensive mineral deposits of Coal, Gas, Petrol, Rock salt (with the second largest salt mine in the world), Dolomite, gypsum, and silica sand. The Punjab Mineral Development Corporation is running over a hundred's economically viable projects. Manufacturing includes machine products, cement, plastics, and various other goods.

Economic growth Sources

Economic growth is the process of increasing the economic ability to produce goods and services. It can be achieved by increasing the quantity or quality of resources. The quality option primarily includes improvements in technology and human capital. The quantity option can include increases in the quantities of labor, capital, land, or entrepreneurship.

The two primary methods of achieving economic growth are increasing the quantity and quality of resources, which might be termed the Q and Q of economic growth. Each method expands the economy's production capabilities, which can result in a greater quantity of products that can then lessen the fundamental problem of scarcity. Economic growth is commonly illustrated as either an outward shift of the production possibilities curve or a rightward shift of the long-run aggregate supply curve.

Resource Quantity

The first, and perhaps most obvious method of achieving economic growth is to increase the quantities of available resources. A direct implication of scarcity is that limited resources mean limited production of goods and services. If those resources are less limited, then production can be greater.

Labor: Human Labor effort is involved in virtually every act of production, from mining manganese to baking bread. As such, if the economy has more workers, then it can produce more goods. The quantity of labor is typically expanded in three ways:

The first is natural population growth. Because labor is people, more births today, mean more workers in 20 years. So long as the birth rate exceeds the death rate, the size of the population increases. Once these people reach working age, then the labor force also expands.

Immigration from other nations is a second way. Workers who move from one country to another immediately add to the labor force of the destination nation. Industrialized countries, such as the United States, have always relied on the immigration of workers from other nations to expand the quantity of labor.

The third way is an increase in the labor force participation rate. That is, to have a larger fraction of the population engaged in working. Every society has hunters and gathers who work, and couch potatoes who do not. The pool of labor increases when a larger fraction of the population is willing and able to work.

Capital: The factories, machinery, equipment, and other capital goods that workers use to assist their production efforts are critical to economic growth. Capital must be produced using resources that could have been used to make something else, such as a want-or-need satisfying hot fudge sundae. This act of producing capital, which enables greater future production but which means giving up goods that would have provided current satisfaction, is commonly termed investment.

Natural Resources: Natural resources provide the economy with materials that are transformed into goods. If the economy has more materials, then it can produce goods. Because natural resources are natural, that is, they come with the planet; the key to increasing their quantity is not creating more so much as just finding them. This is the basic act of exploration, which has historically included "discovering" new lands like European explorers did in the 1600s or like U.S. settlers did when they expanded westward in the 1800s. However, in modern times, exploration usually takes the form of digging or drilling into the Earth's crust in search of mineral or fossil fuel deposits.

Resource Quality

The second method of achieving economic growth is to increase the qualities of available resources, that is, to improve the productivity of a given quantity of resources.

Education: The Quality of Labor: Education is the primary method of increasing the quality of labor resources. This also goes by the term human capital. Better educated workers are more productive workers. Education can be of the formal, sitting-in-a-classroom the variety that awards diplomas and forces students to expand their conceptual understanding. Or it can be of the informal, on-the-job-training variety that comes from experience and learning-by-doing. Both methods--formal education and experience--are valuable methods of increasing human capital and the quality of labor. Some knowledge is best acquired through formal education and some are best obtained by just doing it.

Technology: The Quality of Production: Technology is the knowledge and information that society as a whole possesses the production of goods and services. Improving technology makes it possible to produce more output with the same resources or to use fewer resources to produce the same output, that is, to improve technical efficiency. While technology concerns all aspects of production, it most often surfaces in the quality of capital. That is, the economy uses technological improvements to build better, technically more efficient, machinery, and tools.