Nationalization policy of Zulfiqar Ali Bhutto

 Q. Explain about the nationalization policy of Zulfiqar Ali Bhutto. (7)

Zulfikar Ali Bhutto’s nationalization policy (1972–1976) aimed to reduce economic inequality and curb the power of elite families by bringing major industries, banks, insurance companies, and educational institutions under government control. Under the "Nationalization and Economic Reforms Order" (NERO), key sectors like iron, steel, heavy engineering, petrochemicals, and cement were nationalized in stages, promoting a model of "Islamic Socialism" or 

Mussawat-e Muhammadi
. While aiming for equitable wealth distribution, this policy led to decreased private sector investment, increased industrial inefficiency, and ultimately contributed to economic stagnation
.
 
Key aspects of Bhutto's nationalization policy included:
  • Industrial Takeover (1972): On January 1, 1972, the government seized control of 31 major industrial units across 10 categories, including steel, heavy engineering, chemicals, and cement.
  • Banking and Finance (1974): Private banks were nationalized to control credit distribution, alongside the nationalization of insurance companies and shipping in 1974.
  • Small Businesses and Education (1976): The government expanded control to smaller, essential units like cotton ginning, flour milling, and rice husking to control commodity prices, alongside nationalizing private educational institutions.
  • Impact: While intended to empower the working class and reduce income disparity, the policy resulted in mismanagement of firms, lack of incentives, reduced private investment, and overall economic decline, leading to subsequent denationalization after 1977. 

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