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Bhutto’s Economic Reforms
Bhutto and his party came to rule by clamouring socialist reforms for the poor and deprived classes of the state. ‘Rotti, Kapra aur Makkan’ was there frequently enchanted slogan. Bhutto’s economic policies were influenced by socialist ideas and promises to the removal of feudalism. Rapid industrialization created a gulf between different societies and exacerbated the grievances of people.
The main step to reform the economic system of Pakistan was the adoption of the process of Nationalisation. Which was launched in the early 1970s when Bhutto came to power. Land Reforms, Labour Reforms, Banking system and finance corporations were the main reforms in his era. Arab-Israel war 1n 1973 caused rapid inflation to curtail that rupee was devalued which proved to be favourable for time being and foreign also liquidated economy but after 2 years in 1974 inflation rose 20% to the previous growth.
Bhutto made efforts to curb inequality and feudalism and his policies reflected those ideas. His reforms were slightly stringent than the previous one. By introducing MLR-115 land reforms were made. That the maximum limit of land allowed to be owned was 150 acres of irrigated land and 300 acres of un-irrigated land. However intra-family land transfer was allowed which did not prove to be helpful. In 1977 he made more strict criteria the ceilings were lowered to 100 acres of irrigated land and 200 acres of un-irrigated land. On the 10th of Feb 1972, Bhutto announced radical labour reforms that union power of labour was increased with the formation of Work Councils and Labour courts for industrial disputes. Profit-sharing was increased in big industries from 2-4%. Employers were given cheap housing and education for their children.
In Jan 1972, nationalisation was introduced to over thirty large firms in ten industries. Then after a few months, this process exacerbated towards small and medium industries. In 1974 Bhutto nationalised all private banks and in 1972 private colleges were nationalised in a time of two years and no compensation was given to those people who owned them in the first place. After this process, the Bhutto government owned about 2 billion assets which were used properly as they should have been. In 1976 the public sector which was flouring rapidly had been descended to fall on the ground. More than 3000 small manufacturing units were nationalised. Banks and Finance corporations were nationalised to help other deprived classes. The deformation and inefficiency seen in the coming years regarding previously nationalised institutions were the outcomes of Bhutto’s so-called economic reforms.