Business Finance Articles

Your First Financial Choice....

Ayesha Saeed

How to Get NTN Number in Pakistan

Last Updated on By Leave a Comment

All of us think the same when we plan to start our business. We must register our business to be safe but how can we have NTN (National Tax Number) ?

When I was a university student and planning to start my business after completion, I had the same confusion with very little information regarding Business Registration in Pakistan (expect basics studied in university). 

Somehow, people manage to run an unregistered business but in the broader sense, non registered businesses and people running those businesses are cheating their homeland. After being registered, you pay monthly and annual taxes on sales and profits depending upon your form of business. These collected amounts are reinvested for country’s betterment.

how to get ntn in pakistan

Which Business to register?

There are multiple types of businesses including individual, partnership, public and private limited companies. Each of them have different features and benefits and entirely different from each other in various manners

How to Register a Business & Get NTN

There is some basic information you need to provide to the registrar at FBR or registration authority for giving you a legal authority of running a business in a proper way.

Your preferred Company Name i.e, Al Haq Traders, XYZ Enterprises

Location of the business, principal office, and branch office with their complete address and contact details.

Business Nature or Principal Activity (Manufacturing, Trading, Retail, Wholesale, Services, etc)

Contact details of Partners (if partnership company)

An Active Bank Account

As we are in Pakistan, I shall force you to get Get NTN & GST. There are two stages of registration of a Business under FBR.

The 1st one is the National Tax Number (in short NTN)

and

The 2nd is the Indirect Tax type, called Sales Tax Registration (in short STRn or STR)

It is simple to get NTN but a little harder to register for STRn. By registering for NTN, you need to pay annual taxes on the income; as it is Income Tax Registration but after registering you are bound to pay Sales Tax every month on the sales amount. Which is 17% of the product value.

Let’s say, Product price is 100 PKRs, you will make a bill of 100 Rupees and add 17 Rupee Sales Tax. The customer will pay you 117 and the above 117 will be deposited to FBR account at the end of the month during submitting the sales tax return. The remaining 100 is yours but at the end of the fiscal year, you are bound to pay Income tax from amounts collected from these 100 rupee sales.

This is known as Income Tax Returns

You need to get your NTN first and if you are interested in acquiring your Sales Tax Registration but NTN you just need to have the above details and your National Identity Card (in Pakistan issued by Nadra).

While you are applying, keep it in mind to choose the right business category from Sole-Proprietorship, Partnership, Joint Stock, Public Limited or you are a salaried person. You are also able to register NGOs, Trusts, and others

Required Information

Business Category: Individual / Proprietorship; the Individual must

A. personally go to any Facilitation Counter of any Tax House

B. Bring the following

Original CNIC

Cell phone with SIM registered against own CNIC

Personal Email address belonging to him

Original certificate of maintenance of personal bank account in his own name

Original ownership evidence of business premises

Original paid utility bill of business premises not older than 3 months

To Register An AOP, any one of the Members / Partners Must

A. personally go to any Facilitation Counter of any Tax House

B. Bring the following

Original partnership deed, in case of Firm

Original registration certificate from Registrar of Firms, in case of Firm

CNICs of all Members / Partners

Original letter on letterhead of the AOP signed by all Members / Partners, authorizing anyone of the Members / Partners for Income / Sales Tax Registration

Cell phone with SIM registered against his own CNIC but not already registered with the FBR

Email address belonging to the AOP

Original certificate of maintenance of bank account in AOP’s name

Original evidence of tenancy/ownership of business premises, if having a business

Original paid utility bill of business premises not older than 3 months, if having a business.

For Company Registration, the Principal Officer must

A. personally go to any Facilitation Counter of any Tax House

B. Bring the following

Incorporation Certificate of the Company

CNICs of all Director

Original letter on letterhead of the company signed by all Directors, verifying the Principal Officer and authorizing him for Income Tax / Sales Tax Registration;

Cell phone with SIM registered against his own CNIC but not already registered with the FBR

Email address belonging to the Company

Original certificate of maintenance of bank account in Company’s name;

Original evidence of tenancy/ownership of business premises, if having a business

Original paid utility bill of business premises not older than 3 months, if having a business.

After collection of above-mentioned documents

Sign the form: The statement of the prescribed form shall be signed by all the partners and duly verified by them.

Fee Submission (if any, like NTN and STR is has no fee but Chamber registration, trademark authority, logo, etc have their fee)

The necessary prescribed fee will be paid and the form will be submitted to the local registrar’s office or advised bank branch.

After the registrar satisfaction, that the requirements of registration have been duly complied with, he/she shall issue you a Certificate (NTN or GST)

Benefits of NTN Number in Pakistan

Having a registered business adds so much value to your business in the following domains

General Benefits of Business Registration

Businesses are commonly unaware of the Benefits of Business Registration and that has been a major cause in less number of registered businesses. The second main reason could be that very few of us know How to Register a Business in Pakistan?

Government Facilitation

The government in every country is always focusing on facilitating business for more productivity and economic growth. Many facilities and privileges to registered firms are provided like protection of business and production, which makes it more profitable

Public’s Confidence

Registered businesses are always prioritized to non-registered from the General public. They have confidence in registered firms because registered companies are working under Government supervision and authorities. Customers can take legal action against fraud or misrepresentation. Thus They make business contracts with them without any fear.

Business Repute

Have you ever bought a small pack of snacks or biscuits compared to other company’s same product because you know the first one? The same case is here. Registered businesses are reputed and their products or services are trustworthy. Their patents, trademarks can not be copied.

Bank Facilities

Nowadays, in Pakistan, it has been compulsory to have NTN if you are willing to open a bank account with your business name and you get NTN after you get register under fbr. Banks facilitate in the way to offer less interest rate on loans, offers free banking services like checkbooks, atm cards, statements, pay orders, and many more.

Claims

Often we hear that people had lost, their creditors are not paying dues. Ever thought why? because of no registration. A registered business can file a lawsuit to creditors for nonpayments, authorities protect their rights and help in settlements of claims.

Partnership Benefits

The rights and privileges of a new partner are also protected in the registered firm, therefore people can easily invest in your business. More Capital means more Growth.

Debtors and Creditors Protection

All of the registered businesses maintain their records, they have to book-keeping. Debtors & Creditors trust registered businesses for their rights, liabilities, and debts. Investors trust easily to registered companies & invest in shares. Whole sellers and retailers can pay in advance for their next orders.

International Market

If you are planning to offer your product to the international market, how will you offer it if you are not registered under related local authorities? International buyers can easily be targeted by showing them your registration or certificates like ISO, Food Safety etc.

Easy Guide to Open Bank Account for Freelancers in Pakistan

Last Updated on By 3 Comments

Opening a bank account was a baby’s task some years back. It’s still simple and easy but due to many different unethical and unauthorized activities in Pakistan, it needs some banking processes (ordered by State Bank of Pakistan) to follow for opening a Bank Account.

Basic Types of Banking Accounts

1. Current Account
2. Savings Account

In Current account, you deposit you money and get no reward or interests on deposited amount where as in saving account you get some percentage from bank that is variable bank to bank. Both accounts have the basic requirement.

  • The income Source: How you earn the money you want to deposit in bank?
  • Valid Computerized National Identity card with copies
  • Valid postal address of your home/office to receive letters from bank

How Free Lancers can open bank account in Pakistan?

Collect all the documents and visit nearest branch of any bank you like, there are many options and every bank is giving different services and have some different requirements as well as benefits of opening account at their bank like free cheque books, free atm cards, monthly, semi annually or annually statements as well as online banking and mobile banking.

The Problem for Bank Accounts for Freelancers

As free lancer, you cannot provide valid income source as you are neither an employee nor a business. You are just providing services online.

The fact, “Pakistan is one of those countries providing a large number of free lancers worldwide. Pakistan is ranked at no. 4 out of 10”

How to make a valid & authentic income source?

The first and sincere advice is to register yourself as a service provider with fbr and visit your rto for this purpose.

You can get a salary slip or employment letter from any of your friend or family running small or big scale business. Simply provide it to bank and get your problem solved.

It is easiest way

You can show yourself as a business entity; providing services and generating revenues. (Don’t use this in fake manners because authorities can track and disable your account in future)

For this piece of work, you will need to make a company letter head mentioning your business name with your address (both office & home are accepted).

You can simply google this queries and get hundreds of formats and visit some designer to do it for you.

Possibly bank may demand your visiting card, the reply would be, but not a big deal to answer it.

You can also open your bank account as student. For this you need to be a student of some College and university and would need to provide your student identification card along with CNIC. This account will be valid for the time of your education only.

Once your documentation is completed, you can simply go to any bank and provide them your details and request them account opening. You will provided an account opening form (usually staff will fill for you). Fill it up and submit it to bank with some initial deposit, maybe 1000 rupess or more.

If you are choosing to open account as business / service provider. You will need to write a request to bank on you letter pad for opening account. The format of application can be like this. Bank may require stamp but it’s not mandatory for personal account.

Branch Manager,

Branch Name (Town, Bazar etc)

Bank Name (the bank name)

Subject: Account opening request

Dear Sir,

We are providing online services to our clients from “one month” (time you are working) and providing services like “Website designing development, Domain, Hosting, SEO, Content writing etc” (or services you provide).

Most of our clients are from different cities and we need them to pay our services charges in our bank account. It is requested to kindly allow to open a bank account in your branch.

Regards

Your Name

CNIC No.

Your Service Providing Name

Note: In this way, your account will be opened with person’s name and not your service providing business name. If you want to open an account with your service providing name, like ABC Services, you will need to register yourself for NTN (National Tax Number) and enjoy,

Furthermore, If you are opening through this way. Bank may demand your client’s name, to whom you are providing or have provided your services in present and past respectively.

Disclaimer: This is general account opening process for freelancers and we shared it only to help them. We strongly discourage using the above way if you are not a freelancer.

Best Personal Loans in Pakistan

Last Updated on By Leave a Comment

Indeed, Personal loan helps. As Pakistan is the land of people who wants to grow both economically and socially through utilizing any opportunity at hand. It is a well-known fact that mostly the population in Pakistan belongs from the middle class. This middle class is striving to meet their ends and explore new ideas when it comes to stabilizing themselves. From establishing a small scale business to buying a car or financing for one’s studies, easy Personal Loans in Pakistan has enabled people to dream big.

Just a couple of years back, there were not enough number of people who trusted bank loans in Pakistan. They dreaded the interest deduction or any unpleasant incident, which can inflict them negatively. But surely the time has had to change so it did. People started understanding that low markup and interest-free loans can ease their financial burden in any specific situation without much hassle.

Certain Requirements for Personal Loan in Pakistan

Here, I want to clear one thing about getting an easy loan. Not only banks, there are some micro-financial institutions which are also offering an easy personal loan in Pakistan. For instance, Kashaf foundation is a micro-finance non-governmental organization which is offering their services in the form of providing small business loans and financial access to women to improve their economic status.

The bank loan in Pakistan have got you covered to buy your favorite car, renovate your long forgotten home, wed your daughter or spend on her education.  To avail these loans in Pakistan, there are certain eligibility criteria which you have to meet.

  1. Minimum age limit is 21 years and the maximum is 45
  2. Applicant should have a CNIC
  3. There is a certain earning limit set for the applicant
  4. Duration of business or employment is also required

To get an easy bank loan, you must check with their official websites as every bank has set the eligibility requirement. Generally, the tenure to return loan is set between 1 to 5 years in instalments. These instalments depend on the amount of loan which you have taken from the bank. This time period to return the loan is a relief for people and this is what it makes bank loans in Pakistan a reliable way to get money.

Telenor Micro-Finance Bank Personal Loan

Like I stated earlier, that apart from banks, there are some micro-finance institutions which are actively working to empower the nation economically. Telenor has initiated a mass transaction net for unbanked people with easypaisa back in 2009.

Eventually, a micro-financial setup was set off for the unprivileged segment of society with the purpose of providing easy loans in all over Pakistan.

Apart from providing micro-financial services for the sake of small businesses to fishers, merchants, manufacturers or people from other fraternities, a project “Apni Chhat” is providing people with personal loans in Pakistan.  With this project in working, the main agenda is to give access to people with low earnings to get ownership of their homes on easily monthly instalments.

Salient Features of Apni Chhat Loan

  1. Number of amounts available for a personal loan is up to 50,000
  2. Age limit is from 22 to 60 years old to avail an easy personal loan
  3. Timeline to return loan is 5 years with monthly instalments
  4. No lengthy documentation and complex process
  5. Documents to be required include original property papers, CNIC, application form and finance agreement for loan.

These micro-finance institutions have made it easy for people to fulfill their dreams in a reliable way. These easy loans bank services have set their credibility among customers and people of Pakistan in general.

Naya Pakistan Housing Scheme Loan

People in Pakistan are usually rented or living in joint family system for not having enough resources to construct or buy their own homes. With PM Imran Khan’s Naya Pakistan Housing Program, every one is eligible to apply for own home at easy installments.

Loan for Schooling

Education is an undeniable right of every children but with employment rate as high as in Pakistan, it has become a far flung dream of many parents for their children. Ihsan trust is an organization, which is providing qarz-e-hasna to students for higher education. One of the best features of this loan is that it is loan in Pakistan without interest to fulfill educational needs in Pakistan.

The return policy of personal loan is simple and the eligibility of the applicant depends on its need. The students have to pay back the amount after the completion of studies. The returning amount is amendable and depends on the earning of the student.

Based on the socio-economic condition in Pakistan, it is appropriate to say that access to easy loans in Pakistan is a new wave which is empowering people to improve small & medium scale business and reduce Unemployment in Pakistan

Pakistan’s Election System – Types of Election in Pakistan

Last Updated on By Leave a Comment

Election mean choosing or selection of candidates for an office by vote. Its play pivotal role in democracy. It is fair and legal way to gain power in country. It is not something novel, it has been in vogue for centuries. We have it is traces Ancient Greece. The Roman Empire and more defiantly in the caliphate period.

Types of Election in Pakistan

Election is mainly of two types – Direct and indirect Election. In a direct election all voters can vote to choose head of the state, while in an indirect election only the members of an electoral college can vote to select this head of the state. We have heard other names likes General Election, Local Election, By Election etc. among them the General Election is the most important and most popular. In it, country choose members of national assembly or provincial assembly. Election is an organized institution itself. There is an election commission that arranges for election when required. It has its declared rules and regulations. It enlist the voters. It issues the electoral lists, election symbols etc. it ensure the secrecy and sanctity of the ballet paper. It tries its best to free, fair and transparent election.

In Pakistan with the announcement of election date, election campaign commences and the game of democracy is now in full swing. All the parties and their workers seen more active and busy in propaganda. Election offices are set up. Contesting candidates start visiting the people, all pretend to be more patriot than the others. In Asian countries, election is a more interesting thing, there we see large banners, posters, hand bills and chalking on walls. There are interesting slogans. There are corner meetings, fiery speeches, long procession, catchy slogans, tall promises, clapping and so on. Zinda Abad or Murda Abad, Is there. One is called is patriot, while the other is declared traitor, workers clash, murders, family, disputes, vote-purchasing and temptation are common.

Although active election campaign ends 45 hours before polling, yet secret canvassing continues till the last vote in casted.

On the Election Day, voters flock towards the polling station. There are election camps outside the polling station to advise the voters. Even after casting votes, voters are not ready to leave the polling station. They wait for the result then in a group they go to congratulate there wining candidates.

Election system in Pakistan is not flawless. There are many loopholes in it. Voter-registration is faulty. Many illiterate person cannot got themselves registered in the voters list. There are mistakes in electoral roll. Fake votes are in abundance.  There is violation of election rules. Vote purchasing is common.

There are very poor arrangements to maintain the secrecy and sanctity of vote. Sometimes even there is doctoring of election results. Pakistan’s election system only in encourages the wealthy and powerful people to take post in election. It outs the honest and gentle people from the game of democracy. That is why, only corrupt, selfish and fraudulent leaders come in power and feather their own nests. It is not a happy tradition and future seems dark.

But still they should not be pessimistic, Pakistan should optimize democratic institution by over-healing the election system. There should be such a full proof election system that no selfish, greedy or looter can occupy the government. It should encourage honest, sincere, selfless and devoted people who could change the fate of their nation. Fair, free, impartial and transparent election is a guarantee for the progress and prosperity of the country.

Importance of Zakat

Last Updated on By Leave a Comment

The only reason for the importance of Zakat is that it is an important pillar of Islam. Different scholars may have different definitions of Zakat but in simple words, “Zakat is Purification of money”. Zakat is due after 1 year of keeping the asset. These assets include everything excess from your needs.

Zakat is totally different as the tax is imposed by National Govt but Zakat is part of belief in Islam. Every country imposes different types of taxes depending upon the economic condition where as Zakat is Universal law applicable to all Muslims

Zakat and Tax difference is also observed that Zakat is for deserving people and must be delivered by the one who is deducting it but Tax is paid to Govt and they utilize the amount as they want to.

“Zakat is a transfer payment which Sahib –e – Nisab Muslims make at given rates by themselves or through the Islamic state to the poor and the needy in or after the month of Rajab.

Difference between Zakat and Tax

Zakat is absolutely different from tax which is imposed by the Govt. the main differences are as under

Zakat
• Zakat Payment is Religsious duty of Muslims
• It is imposed on only Muslims who are meet requirements
• Zakat is complusory payment and not remitted
• Zakat rates are fixed. They are mentioned in Holy Quran & can not be changed
• It can be paid to individuals by individuals
• Beneficiaries of zakat are mentioned in Islam. They can spend it anywhere
• Zakat Nisab is fixed
• It is to be paid after completion of a year
• Zakat is imposed on all goods like silver, animal, gold, property, agricultural income and more
• Objective behind paying Zakat is to please Almighty Allah by spending financial resources and helping poors
• Zakat purifies the wealth
• It’s fixed and not variable
• Zakat creates feeling of being muslim society member irrespective to regional limits
• Zakat payments doesn’t facilitate payer
• Collected Zakat can be spend anywhere by anywhere without any boundries
• Zakat Imposition is based upon those who have ability. There is nothing like indirect or direct zakat
• NO curroption is observed in zakat collection
Tax
• Paying Tax is National Duty of all citizens
• Tax is payable by every citizen who has ability
• Tax is compulsory payment & remitted by Govt.
• It is changeable, Govt. may change it according to economic condition of country
• It is to be paid by individuals to the Govt.
• Tax collection by govt is subjected to spend on where Govt. wants too
• Tax amount depends upon income/sales and can be changed
• It can be paid anytime
• Imposition of tax is based upon incomes & sales
• Tax collection objective is to spend collected amounts on developments and welfairs of society
• Paying tax doesn’t purify wealth. It saves from legal actions
• Tax is progessive
• Tax creates native feelings
• Tax Payers are facicilitated by the Govt.
• Collected tax is subjected to be spent on collected region only
• Tax imposed on everyone using direct and indirect tax patterns
• A lot of curroption is observed in tax collection

CONCLUSION: Keeping in view the above whole difference in Zakat and Tax, We know that It is the main tool of fiscal policy of an Islamic state. It provides financial assistance to poor persons, raises the aggregate growth of the economy, plays a vital role to stabilize all the fiscal variables and make the country prosperous.

Zakat ASSESMENT- Who should Give Zakat

For the assessment of Zakat, the following must be kept in view.

Sahib-e-nisab Muslim

A Muslim who owns and keeps in his or her possession at least 7.5 tola gold or 52.5 tola silver or cash money to the equivalent value is considered a sahib e nisab Muslim. It is his compulsion to pay Zakat at its prescribed rates by Quran and Hadith.

Zakat on Exposed and Unexposed wealth

Exposed wealth is the wealth which is exposed to the society e.g. agricultural goods, camels, sheep, minerals, etc. On the other hand, unexposed wealth is the wealth which remains unexposed to the society e.g. gold, silver, cash, liquid assets etc.

The rates of Zakat

Zakat is paid at the following fixed rates.

Gold, silver cash:

For at least 7.5 tola gold, 52.5 tola silver or the equivalent value in terms of business inventories or commercial goods or cash money , the rate of Zakat is 2.5% of the total value of the goods or money.

Agriculture:

Zakat which is called usher, is paid at the rate of 10% from the agriculture output of the land which is irrigated by natural sources and is paid at the rate of 5% from the output of the land which is irrigated by artificial sources like canals, tube wells etc.

  1. Animals:
  2. Zakat is paid on the commercial animals at the following rates:
  3. One goat from 40-120 goats. Two goat from 121-200 goats and three goats from 201-300 goats.
  4. One cow from each 40 cows.
  5. One camel from each 5 camels
  6. Minerals

Zakat is paid on mineral e.g. coal, iron, salt, etc. at the rate of 20%.

BENEFICIARIES OF ZAKAT – Who can receive Zakat

The following can be beneficiaries of Zakat.

The poor

These are the people who cannot be treated as sahib-e-nisab.

The needy

These are the people who are unable to earn their living e.g. handicapped, disable, orphans etc.

Collectors of Zakat

These are the people who collect and distribute Zakat among the poor and the needy. Their salaries are paid from the Zakat fund.

The new Muslims

These are the people who have recently converted to Islam.

The Slaves

Zakat can be used to make free the slaves and prisoners of wars from their masters and enemies.

The debtors

People who are heavily indebted can get Zakat to repay their debts provided that the debt is not taken for the sinful purpose.

The travelers

The travelers can get Zakat to complete their journey in case they fall in need of money.

Mujahideen

Zakat can also be given to Mujahideen to prepare them for jihad. Also, the dependents of the martyrs and the religious educational institutions can seek assistance from the Zakat fund.

Thus, Zakat is a source of financial assistance for the poor and needy persons.

Importance of Zakat

ECONOMIC AND SOCIAL IMPORTANCE OF ZAKAT

The following facts reflect the Social and Economic Importance of Zakat.

Purification of the soul

Zakat purifies the soul of contributor from the evils of miser ness. It makes them humble and God-fearing. It also creates wealth discouraging love among people.

Healthy growth of the community

Zakat leads to the healthy growth of the economy and the community. It uplifts the less fortunate members of the society.

Narrow Down the Economic Inequalities

Zakat narrows down the economics inequalities in the community to the minimum possible limit. The rich may not grow richer ant he poor poorer.

Wider circulation of wealth

Zakat increases the speedy circulation of wealth. It discourages hoarding and provides an automatic mechanism for the flow of wealth from rich to the poor thus, it widens the circulation of wealth among the community.

Main Source of Income

Zakat occupies a central position in the financial structure of a Muslim state, because it contributes too much towards national treasury and it provides sufficient fund to Govt.

Fair Distribution of Wealth

Zakat meets an important purpose for spreading and distributing wealth that becomes just and equitable. It guarantees that income is not centralized rather it moves very rapidly among different groups of society.

Minimizes Unemployment

Zakat is a very vital instrument for removing unemployment .the money received by the people can be used and poor can start a business.

Economic Stability

The problem of instability does not take place in an Islamic economy due to the mechanism of Zakat. Zakat promotes the velocity of circulation of money due to which AD for goods and services rises. This determines the level of investment, income and unemployment on stable footing.

Self-reliance

Zakat eliminates poverty and diversity from the society. It brings amount prosperity .people can take care of each other and in such a way Zakat enables an economy to be self-reliant.

Capital accumulation

By Zakat, people can use their liquid assets to promote capital formation in the country. They invest their assets due to which growth rate of the economy goes up and the country gets prosperity.

Mobilization of resources

Such individuals who get income in the shape of Zakat are in a position to utilize the available resources . In this way, the maximum use of resources becomes possible.

Social security

Zakat fund not only covers the poor and the disabled, but it also provides social security to unemployed individuals.

Social welfare

Hospitals, schools and handicrafts centers for the poor can be constructed by making use of Zakat fund. This promotes social welfare in the country.

Anti-social activities

Zakat is paid obviously from rizq-e-halal. thus, the Muslims who pay Zakat refrain themselves from anti-social activities like hoarding, smuggling etc.

Control of crimes

The major cause of crimes particularly theft is due to the poverty of people. The problem of poverty can be easily over come by Zakat. In such a way, the crime rate can be controlled.

Importance of Zakat for Wealth Production

Higher Liquid Assets

Zakat discourages hoarding and people can make use of their liquid assets to promote saving, investment and capital formation in the country. They invest in various sectors of the economy as a  result of aggregate production in the economy goes up.

Higher Velocity of Circulation of Money

Zakat promotes the velocity of circulation of money due to which aggregate demand for goods and services increases. It increases the level of investment, income, and employment

Higher Capital Formation

Zakat is paid on saving which remains accumulated for at least one year. Therefore it brings down the absolute amount of saving with a person .to maintain his consumption standard, he gets stimulus to increase the level of saving. hence, marginal saving goes up which can be used to make additions to the existing capital stock of the country. This will certainly promote the production level in the economy.

Higher Efficiency

Since Zakat increases the aggregate demand for consumer goods, consumption function of the community in a macro sense may shift upward. the economy would become more efficient.

Importance of Zakat for Distribution of Wealth

Automatic and Fair Distribution

Since 2.5% of the wealth of the rich is transferred to the poor every year in the form of Zakat. It means the whole wealth of the rich is transferred to the poor section of the community in the forty years. This provides an automatic mechanism for the flow of wealth from the rich to the poor, due to which wealth is fairly distributed among different sections of the society.

Better Allocation of Resources

Transfer of money from the rich to the poor in the form of Zakat would mean that demand for basic necessities of life will increase. This will encourage their production. Scarce resources would be drifted away from the production of luxuries to that of necessities. This is a better allocation and distribution of scarce resources.

Social Welfare

The construction of social welfare institutes with the Zakat fund ensures distributive justice in the economy.

Better Living Standard

Zakat provides a better quality of life to the poor through the process of re-distribution of income.

Wider Circulation of Wealth

Zakat curtails the ratio of wealth concentration in a few hands.

Types of Soil in Pakistan – Soil Classification & Characteristics

Last Updated on By 2 Comments

The physiography of Pakistan is very unique and has a diverse landscape all over the country, with a very distinctly climate in the whole country. Due to these reasons, the physiography of Pakistan is divided according to soil classification.

The type of soil formed is a function of topography, climate, vegetation, and the parent rock from which the soil material is derived.

Soil texture varies with the size of the soil particles. Coarse-textured soils are sandy, fine-textured soils are clayey, and a mixture of sand and clay is called loam. Soils of high organic content are darker in color and have more nutrients for plant growth than those of low organic content. Since most of Pakistan is arid or semi-arid, the soils contain little organic matter.

soil in pakistan

Soil-forming processes are complex and continuous. As a result, soils vary in their chemical composition, color, texture, and organic content from place to place. The discussion describes only the major Ecological zones of Pakistan.

Pakistan’s Ecological Zones

Pakistan has divided into Major Nine Ecological Zones

1: Northern Mountains Regions

2: Western Mountains Regions

3: Potwar Plateau

4: Sandy Deserts

5: Piedmont Plains

6: Old River Terraces

7: Sub-Recent River Plains

8: Recent River Plains

9: Indus Delta

Sr.NoName of Zone Geographical CoverageSoil TypesMajor Crops
1.

 

 

Indus Delta

 

 

Thatta, Badin

 

 

Clayey and Silty

 

 

Rice, Pulses, Sugarcane, Berseem, Banana

 

 

2.

 

 

Southern Irrigated Plains

 

 

Hyderabad, Sanghar, Dadu, Khairpur, Larkana, Sukkur, R.Y. Khan, Shikarpur, Jacobabad

 

 

Calcareous, Loamy, Silty, Clayey and Sandy

 

 

Cotton, Wheat, Rice, Sugarcane, Mustard, Sorghum, Berseem

 

 

3.

 

 

Sandy Desert (a)

 

 

Tharparkar, Nawabshah, Bahawalpur, NoderoFeroz, Mirpur Khas, Cholistan

 

 

Sandy, Clayey and Loamy

 

 

Guar, Millet, Wheat, Castor

 

 

4.

 

 

Sandy Desert (b)

 

 

Muzaffaragarh, Layyah, Sargodha, Khushab

 

 

Calcareous, Sandy, Loamy

 

 

Gram, Wheat, Cotton, Guar, Sugarcane, Millet

 

 

5.

 

 

Northern Irrigated Plains (a)

 

 

Bahawalnagar, Multan, Khanewal,, Lodhran, Vehari, Sahiwal, Pakpattan, Okara, Lahore, Kasure, T.T.Singh, Faisalabad, Jhang, Sheikhpura, Gujranwala, Hafizabad

 

 

Sandy, Clayey, Calcareous, Silt-loam

 

 

Wheat, Cotton, Millet, Sugarcane, Maize, Berseem, Citrus, Mango, Melons, Oilseeds

 

 

6.

 

 

Northern Irrigated Plains(b)

 

 

Peshawar, Mardan, Charsadda, Nowshera, Swabi

 

 

Clayey, Moderately Calcareous

 

 

Sugarcane, Maize, Gram, Tobacco, Wheat, Millet, Berseem, Groundnut, Sugar beet, Pears, Plum

 

 

7.

 

 

Barani Lands

 

 

Bannu, Mianwali, Attock, Rawalpindi, Jehlum, Gujrat, Sialkot, Mandi Baha-ud-din, Lakki Marwat, Islamabad, Bhakkar, Chakwal, Narowal

 

 

Silt loam, Silty clay loam, Clay loam

 

 

Wheat, Millet, Maize, Rice, Oilseeds, Pulses, Fodder crops

 

 

8.

 

 

Wet Mountains

 

 

Abbottabad, Hazara, Mansehra, Kohistan, Haripur, Battagram

 

 

Silt loam, Silty clays

 

 

Maize, Rice, Wheat, Apples

 

 

9.

 

 

Northern Dry Mountains

 

 

Chitral, Dir (Lower and  Upper), Swat, Malakand, FATA, Bunair

 

 

Clayey, non-Calcareous and acidic (above 2100 altitude) Calcareous at a lower altitude

 

 

Maize, Wheat, Rice

 

 

10.

 

 

Western Dry Mountains

 

 

Kohat, Karak, Tank, Zhob, Loralai,Kalat, Sibbi, Quetta, Kachhi, Pishin, Killa Abdullah, Nasirabad, Kohlu, Bolan, Tambo, Jaffarabad, Jhal Magsi, Musa khail, Burkhan, Ziarat, Kila Saifullah, DeraBugti, Mastung

 

 

Calcareous loamy

 

 

Wheat, Maize, Apples, Peaches, Plums, Apricots, Grapes

 

 

11.

 

 

Dry Western Plateau

 

 

Kharan, Awaran, Chagai, Lasbella, Karachi, Mekran, Turbat, Khuzdar, Gwadar, Panjgor

 

 

Strongly Calcareous, Silt loams

 

 

Wheat, Sorghum, Millet, Melons

 

 

12.

 

 

Sulaiman Piedmont

 

 

D.I. Khan, D.G.Khan, Rajanpur

 

 

Loamy, Clayey, Strongly Calcareous

 

 

Wheat, Sorghum, Millet, Gram, Mustard, Rice

 

 

The Role of Soil Classification in Agriculture Development

The soil classifies for getting the better result from Pakistan’s agriculture and soil classification identifies the soil category of area features, climatic conditions and types of soil and after classification divided the areas according to soil categories.

Every kind of crop, vegetation, trees, and forests depend up the soil Material. These are cultivated according to the present soil Material for getting a better output of any kind of crops.

Benefits of Soil Classification as All these information can help in the progress of agriculture departments

  • In soil classification, we collect data on all soil properties and its help in soil Management and its use for specific purposes.
  • We can determine the nutrient requirements for crops with the help of soil properties.
  • Soil classifications provide information about soil resources and its use for Pakistani agricultural planning and development.
  • Through soil classification, we can get detail about a huge area, which is suitable for agriculture or for industries.
  • Soil classifications provide information about the sandy Mountainous areas of Pakistan, that these are not suitable for agriculture on a national level.
  • Changa Manga forest totally depends upon the soil because the soil of that area is favorable for the forest. Changa Manga and other forests collectively have the prominent share of agriculture in GDP of Pakistan.
  • The government can determine the ways of progress in agriculture through soil classification in agriculture if they use the right place for agriculture.
  • A place is not suitable for every kind of agriculture, because different places have different types of soil. By using the soil classification, we can determine the exit place for exit crop.
  • Planning for soil and water resources can be determined by the soil classification.

The former can maintain the required level of soil and can improve the yield of their crops if they use their land according to soil classification.

Sugarcane in Pakistan – Physical and Economic Factors

Last Updated on By Leave a Comment

Sugarcane is a Kharif. Sugarcane is an important cash crop of Pakistan. It is a type of long grass “perennial” in nature. The first crop is called “plant cane” and the succeeding crops are called “Ratoon Crops”. Although it is a plant of tropical regions. It can also be cultivated in sub-tropical areas.

In Pakistan, Sugarcane is cultivated in the spring season in the month of February or March. It is harvested in November or December. Sugarcane is included in both Rabi and Kharif Crops. It is a “perennial” crop. The first crop is called “plant cane” and the succeeding crops are called “Ratoon crops”. Generally, good yields from Ratoon crops are obtained only in one or two years.

History of Sugarcane

According to shreds of evidence, this was originated in indo-pak. It’s description found in Indian mythological literature of 1000 B.C.

The people of ancient times were not aware of sugar and were not aware of sugarcane and other means of producing sugar. However, sugar was being sold in the markets of China in the mid of eighteen century. In the European countries, sugar was only found at the tables of the nobles and rich people.

Physical and Economic Factors for Harvesting Sugarcane in Pakistan

Physical Factors


• Climate
• Water
• Soil
• Land

Economic Factors


• Soil Preparation
• Labor
• Stem Quality
• Plantation
• Stem Selection
• Fertilization
• Safety
• Harvesting

Physical Factors

The favorable physical factors for the Sugarcane crop are as under:

Climate

Sugarcane is a crop of hot and humid climate throughout its vegetative growth, with cool and dry ripening and harvesting season.

Temperature

Sugarcane is a crop of wet tropical lands. From 8 to 24 months elapse between 18°C to 29°C. Frost is very dangerous to young cane. The sugarcane needs a minimum of 250 frost free days. Sugarcane plant requires temperatures between 18°C to 30°C, throughout its vegetative growth, while during ripening and harvesting period cool and dry weather is most suitable.

Rainfall / Water

It grows well in areas having rainfall of more than 40 inches annually. It is very sensitive to drought conditions. Stagnant water is very damaging. In our country Sugarcane is cultivated in canal irrigated areas since the rainfall is below 20 inches which are not sufficient. In dry regions 16 to 18 irrigation with four inches of depth is sufficient. A long rainy season of 8 months, with 40 to 60 inches rainfall, with plenty of sunshine is most suitable for the high yielding crop.

Soils

Sugarcane can be grown on a variety of soils ranging from sandy loams the heavy clays but sill loams and clay loams are most suitable. It is grown primarily on both alluvial and red soils. The soil should contain some elements of lime, potash, and nitrogen.

Land

The best land for sugarcane is flat or undulating and fertile with topsoil that retains moisture and subsoils that permit drainage. Therefore the main Sugarcane area in Pakistan is located in the canal colonies of the fertile Indus valley.

Economic Factors

Along with suitable physical conditions, high yields can only be obtained with the help of proper inputs and adopting the best Economic methods.

Soil Preparation

Suitable soil selection is a prerequisite for high yields. For cane crop, Lava soils and Alluvial soils are most suitable. Suitable soil must be well prepared for proper root development, which increases the yield of the crop.

Skilled and Cheap Labour

The skilled and cheap labor is a Major part of crops cultivation and its play a vital role in the yield production and through this source, production can be increased. The saddest part is, Pakistan’s unemployment rate is high a time when skills are required for the job. It’s all because of unplanned policies.

Stem Quality & Planting Time

The long growing period for vegetative growth of the crop increases its yield, therefore optimum planting time must be strictly observed. In subtropical regions, spring is the best planting time. For plantation of one acre of sugarcane 80 to 100 Munds 3200 kg to the 4000kg amount of sugarcane is required. Therefore 35 to 40 thousand pieces of cane stem with two eyes are needed for one-acre cultivation.

Method of Plantation

The Sugarcane crop is propagated from buds (eyes) with the help of stem. Therefore, it is planted in furrows in well prepared and manure fields. The furrows must be 3 to 4 feet apart and stem must be buried at the depth of 12 inches. After plantation, fields are immediately irrigated. For plantation, both manual and mechanical methods are adapted.

Selection of Stem

The Cultivation of specific varieties for recommended regions is essential for the bulk of production. Indian and tropical varieties of sugarcane are specific to their regions. But cross-breed of these varieties are yielding huge production and is becoming the most popular.

Fertilizers Use

The Sugarcane crop requires heavy manuring of natural and chemical fertilizers for persistently high yields. Therefore balanced and in time fertilizer application result in yields.

Safety of Crop

For Controlling of diseases, insects and weeds are very necessary because they cause up to losses. Therefore, for better yields, remedial measures are necessary to control the pests and diseases.

Harvesting

The Sugarcane is cut at or near the surface of the ground and stripped of its leaves by knife hook and trimmed at the top near the mature joint. Then it is transported to the factory for sugar preparation or it is locally consumed for making Gur and Khandsari.

After crushing cane and preparation of sugar, Bagasse and molasses are two major products of the sugar industry. Bagasse is being used for fuel in mills, making chipboard and paper. While molasses is used for making alcohol, synthetic rubber and animal feed etc.

Production Areas for Sugarcane in Pakistan

In Pakistan, a sub-tropical continental climate militates against the growth of thick canals. All the areas of our country are not suited to the growth of Sugarcane. It is mostly cultivated in canal irrigated areas of Punjab, KPK and Sindh provinces.

Punjab

Faisalabad, Sargodha, Multan, Bahawalpur, Lahore, and Gujranwala division are famous for Sugarcane production.

Sindh

Hyderabad division ranks first and Sukkur division second in the production of Sugarcane.

Khyber Pakhtunkhwa – KPK

Mardan and Peshawar districts are at the top and some amount of Sugar cane is also produced in the districts of Bannu and Dera Ismail Khan.

Sugarcane Production in Pakistan

Punjab Sindh KPK Balochistan Pakistan
000 tones 37481.0 13766.4 4030.3 30.8 55308.5

Importance of Agriculture in Pakistan – Contribution to Economy

Last Updated on By Leave a Comment

The agricultural sector of Pakistan has made a significant contribution to its GDP. When the GDP of the country grows, economic development takes place. In the beginning, the agricultural sector had the highest share in the GDP but then the service sector became the chief provider with the passage of time.

Livestock accounts for 9% of the total GDP and 4% of the agricultural sector.

Importance of Agriculture in Pakistan

Pakistan's Ranking


• Silk Producing Countries
• Rice Producing Countries
• Cotton Producing Countries
• Wheat Producing Countires

Position in World Production


• Stands at Position of 8th
• Has its Position in Top 20
• Stands at Position of 4th
• Stands at Position of 6th

Foreign Exchange Earner

The agricultural area is the major source of foreign exchange incomes in Pakistan. The exports of rice, wool, Cotton textile and more. bring about 65% of our total earnings. The imports help in vital inputs for development i.e. import of equipment, capital machinery, technical know-how etc.

Sustaining the Population

According to the food and Agriculture Organization of the United States, Pakistan is the 2nd most populated country in the Muslim world while the 6th most populated country of the world. Agriculture is playing a crucial role in order to withstand such an enormous population. Wheat is the largest produced & eaten in Pakistan and it is the largest cultivated crop of Pakistan. Luckily, Pakistani is an agriculture country, in the case; if it was not – Pakistani govt may need to import all food items from different countries.

Thus agriculture performs a double role in development by giving food and assisting economic growth by decreasing imports

Source of Employment

Agriculture is the main cause of employment in Pakistan. More than half of the population of Pakistan lives in rural areas. According to the economic survey of Pakistan, 46.61% of the entire employment is delivered by agriculture. Higher per capita income of people and increased GDP of Pakistan is because of employment.

Increasing the Tax Revenue of the Government

Economic development is one of the major duties of any government. The greater the government gathers tax revenue, more the money it will have for spending on development related projects. Agriculture engages 20% contribution in GDP and 43.61% of Pakistan labour force, it also enhances per capita income and reduces unemployment in Pakistan.

Government collection of various taxes revenue increases as per capita income increases. In this way, agriculture has an important part in raising tax revenue.

Support for Industries

The enhanced growth in the agricultural area delivers raw materials to manufacturing productions. The manufacture of fruits, jute, cotton, sugarcane etc. assists other agro-based industries to get material from within the country and enlarge manufacture.

Raw Material for Industrial Sector

In the economic development of any country, industries are of great importance. As long as agriculture is providing a huge amount of raw materials to the industries, Pakistan’s soil is fertile & helping many industries in Pakistan. Cotton which is also a significant export of Pakistan and raw material of the textile industry is a major crop of Pakistan. As sugarcane is also amongst one of the vital crops of Pakistan and likewise sugar industry uses sugarcane as raw materials. Pakistan’s sports goods are well known worldwide and are also major exports of Pakistan.

Marketable Surplus

When on systematic lines the agriculture sector is extended, it produces an attractive marketable surplus. The surplus i.e. sugar, fish, cotton, silk, timber, jute, wheat etc. can help to pay the capital tools, import of raw materials and technology. This helps in bringing about fast economic development.

Infrastructure Development

The energy of economic development is infrastructure, for ensuring fast transportation of goods and services. Govt of Pakistan must announce policies for agriculture sector because it has increased the infrastructure in many ways. For examples, it developed the need for roads to bring crops from villages to cities.

Example

A government should familiarize modern ways of production through the introduction of technology in the area of agriculture. The government should also study land reforms as the large lands are more productive than the small ones and should also increase the ownership of land to remove feudalism. Effective and operative ways for agricultural sector will definitely enhance the development of the weak economy of Pakistan

Unemployment in Pakistan [ Causes and Solutions ]

Last Updated on By Leave a Comment

In the vast ocean of 195th countries, Pakistan lies under the band of developing countries that are still fighting in this global world for their survival. Being a developing country, it has been facing various huge crisis including unemployment in Pakistan since emergence.

Youth Unemployment is the main problem that Pakistan is facing Nowadays, due to this poverty is at its peak. An atrocious fact that Pakistan is currently plagued with sheer Unemployment. This post is all about the causes of unemployment in Pakistan and presents the best possible solutions.

Employed-Unemployed
• Unemployment Rate
• Unemployed People
• Population
• Employed People
Statistical Data
• 5.90%
• 3.62 Million
• 200 Million
• 62.23 Million

Top 8 Causes of Unemployment in Pakistan

Reasons of Unemployment in Pakistan
• Limited Resources
• No Investments
• Fewer Opportunities
• Poor Education System
• Limited Experiences
• Law Violence
• Energy Crisis
• Retirement Age
Solutions of Unemployment in Pakistan
• Monitor Referral Systems
• Support Industries
• Support Investors
• Implement Law
• Provide Experience Opportunities
• Start pension program
• Train Youth

Following are the determinants of unemployment in Pakistan. In Pakistan, there are about 2 million people are unemployed which is really perilous sign for Pakistanis.

Lack of Sources

One main reason is the lack of sources. The person who has been graduated from any institute has to wait for any vacancy for a long time because he or she has to show a reference of any high official or in simple words, he/she needs a “source” despite his brilliant academic record and abilities.

Pakistani Soil is fertile. Budgeting authorities and politicians need to understand the importance of agriculture in Pakistan. Pakistan ranks at number four in the largest cotton producing countries in the world, at 6th in wheat producing countries, at 8th in silk production, rice, fruits, and many other agriculture products. Yet agriculture contribution to Pakistan GDP is not satisfactory. It is all because of no resources for advanced farming.

Lack of Investment

Another reason is the lack of investment. Investors are investing in outside projects due to which there is a low savings average which leads to low capital, which is ultimately a reason for unemployment.

Lack of Opportunities

Pakistan is considered a talented nation but due to the poor employment system, many talented people do not find a platform to show their skills. Due to this many people remain jobless for a long time. Even Facebook marketing can enhance the business but lack of familiarity with the banking system does not let people start.

Poor Education System in Pakistan

In Pakistan education system is not improved with time needs. There are several technical colleges that are training the students but this training is not according to the needs of the market. They are also not trained. From the primary level to university graduates, they must be trained to different skills especially the main focus should be to build Entrepreneurial skills and characteristics in youth

Lack of Experience

The frequently asked question in most job interviews is “How experienced you are?”. Despite providing a chance of experience to skilled people everyone is asking for their high experience in the field.

Violence of Law

As the law is not considered an important or respectable aspect of our society. Due to a lack of following of law, everyone considers himself superior and does whatever he wants. This makes the system poor due to which people avoid investing or establishing industries in the country.

Energy Crisis in Pakistan

Pakistan has been gifted with huge natural resources but due to a lack of government concentration these resources have not been used in a proper way. As facing this energy crisis government is unable to provide basic needs like electricity, water, gas, and home. Shortage of electricity causes loss to industrialists and as a result, they are shifting their units to other countries.

High Age of Retirement

In Pakistan, the age of retirement is 60. In many government institutes, there are officers who are not even able to work continuously for 2 hours but they are on the seat. Due to them, there are many talented people who are still looking for the job despite their ability, talent, hard work, and working power only because of lack of any vacancy.

Is CPEC a hope for Pakistanis and Advantageous to Pakistan?

The CPEC appears to be a very crucial project for both countries. For Pakistan, it helps to provide a much-needed base to kick start its economic growth. CPEC will be a great source to generate employment opportunities for both, literate and illiterate workforce.

Best 11 Solutions for reducing Unemployment in Pakistan

Being a nation it’s our honorable duty to take away the darkness of our country. Our country will progress only when we all play our role in it.

Big and Successful companies simply want to hire the best employee. Not any organization is willing to hire individuals who are unsure of what to do in a professional way.

A great initiative by PM Imran Khan: Naya Pakistan Housing Program

Since our country is surviving for many years it will not be proper by just the Government but we also have to help each other to uproot all the problems. Here are few strategies to combat unemployment in Pakistan:

  • Unauthentic Sources should strictly be uprooted. So that the deserving people should get the job.
  • The government should create an environment which makes the industrialist set more and more industries.
  • The government should give much facilities and benefits to the investors so that they invest more in Pakistan.
  • The education system should be updated and systemize in a good manner.
  • Law implementation should strictly monitor.
  • Every citizen should follow the rules and regulations by heart and should maintain discipline.
  • The Government and also the high officials should try to provide a platform to youngsters where they could be able to gain experience and also a chance to enhance and polish their skills.
  • Hundreds of creative minds are facing high-interest rate personal loans in Pakistan. Govt. should start schemes to promote them.
  • A policy should be made in which the officers who have crossed the age of 50 should be given their deserving pensions and also few allowances.
  • The government should construct and plan policies in a proper way
  • Businessmen should be encouraged to start own business or continue the family business.
  • The youngsters should develop in themselves the qualities of working hard and also the passion for working productively.

There is not any problem in the world that can’t be removed with passion and determination. The only thing which has to be done is work with unity and responsibility. If every citizen starts performing his or her own duties then there is no one who will stop the nation to progress.

Being unemployed causes people to often feel woeful as well as dejected, so if you have some family member or friend who is unemployed ascertain that you are there for this person in their time of need and self-doubt as well.