Page 63 - CMA Journal (May-Jun 2026)

SECTOR INSIGHTS

S ECT O R I NSIG HT S

By: ICMA Research and Publications Department

SECTOR BRIEF OF PUBLIC SECTOR

ORGANIZATIONS (PSOS) IN PAKISTAN

Pakistan’s public sector, including 190 SOEs,
contributes about 10% to GDP with revenues of Rs.
12.4 trillion in FY2025. Yet losses of Rs. 832.6 billion
outweighed pro ts of Rs. 709.9 billion, adding to
accumulated losses above Rs. 6.5 trillion. Despite
privatization e orts and governance reforms under
the PFM Act 2019 and SOE Act 2023, challenges of
accountability, sustainability, and e ciency persist.
Strengthening governance, accounting, and
performance management remains essential for
transparency and sustainable development.

Historical Transition of Public Sector Organizations in Pakistan:
Nationalization, Privatization and Governance Reforms

• At independence, Pakistan inherited limited public-sector infrastructure, with railways, post,
irrigation, and public works forming the backbone, alongside municipal bodies delivering
1947-49 basic services.
• The State Bank of Pakistan (SBP) was established as the rst major regulatory institution,
overseeing monetary policy, banking supervision, foreign exchange, and currency issuance.
• The National Bank of Pakistan (NBP) followed as the rst state-owned commercial bank,
supporting government operations, trade nance, and economic development.
• PIDC launched Pakistan’s SOE sector, establishing 60+ industrial projects in fertilizer, cement,
1952-57 textiles, paper, chemicals, and engineering to o set weak private investment.
• PICIC became the rst major DFI, providing long-term industrial nancing unavailable through
commercial banks.
• WAPDA established as the rst federal authority for dams, hydropower, irrigation, and water
management.
1958-61 • CDA created to plan and develop Islamabad, introducing modern municipal development
authorities.
• Expansion of strategic SOEs with OGDC, IDBP, and PIA, strengthening Pakistan’s state-owned
and development nance sectors.
• Public investment drove nearly half of national development spending, with major projects
like Mangla and Tarbela Dams, irrigation systems, and highways.
1964-67 • Expansion of autonomous bodies such as Pakistan Council of Scienti c and Industrial Research
(PCSIR) and Pakistan Agricultural Research Council (PARC) established specialized research
institutions beyond traditional ministries.
• The government nationalized 31 major industrial groups, dramatically expanding state
ownership and the SOE sector.
1972-74 • Government assumed greater control over educational institutions, public utilities, and
industrial corporations under a state-led development model.
• Around 14 commercial banks and the insurance sector were nationalized.

ICMA’s Chartered Management Accountant, May-June 2026 61