a) GDP
A substantial chunk of Sindh’s GDP is attributed to Karachi (the GDP of Sindh as a percentage of Pakistan’s total GDP has traditionally hovered around 29%/30%). Karachi’s GDP is around 20% of the total GDP of Pakistan. A PricewaterhouseCoopers study released in 2007, that surveyed the GDP (2005) of the top cities in the world, calculated Karachi’s GDP(PPP) to be $55 billion (projected to be $127 billion in 2020 at a growth rate of 5.9%). It confirmed Karachi’s status as Pakistan’s largest economy, well ahead of the next two biggest cities Lahore and Faisalabad having a reported GDP(PPP) of $29 billion and $10 billion, respectively. Karachi's high GDP is based on its mega industrial base, with a high dependency also on Financial sector. Textile, Cement, Steel, Heavy machinery, chemicals, food, Banking, Insurance are the major segments contributing to Karachi's GDP.
b) Revenue Collection
In line with its status as a major port and the country's largest metropolis, it accounts for a lion's share of Pakistan's revenue generation. According to the Pakistan Federal Board of Revenue's 2006-2007 year book tax and customs units in Karachi was responsible for 46.75% of direct taxes, 33.65% of federal excise tax, and 23.38% of domestic sales tax. Karachi also accounts for 75.14% of customs duty and 79% of sales tax on imports. Therefore, Karachi generates collects a significant 53.38% of the total collections of the Federal Board of Revenue, out of which 53.33% are customs duty and sales tax on imports (Note: Revenue collected from Karachi includes revenue from some other areas since the Large Tax Unit (LTU) Karachi and Regional Tax Offices (RTOs) Karachi, Hyderabad, Sukkur & Quetta cover the entire province of Sindh and Baluchistan). Karachi's indigenous contribution to national revenue is 25%.
c) Business districts
I I Chundrigar Road (formerly McLeod Road) was once the main business district of Karachi, but in recent years many businesses have moved to other areas such as Sharah-e-Faisal, MT Khan road, Mai Kolachi, Clifton and Defence. The traffic congestion in I.I. Chundrigar Road has made it difficult to travel to the center of the city in a timely manner.
Sharah-e-Faisal has seen a spate of building with high rises, show rooms and institutions. Its proximity to Karachi Airport has been a significant factor.
c) IT trends
The recent trend of ICT (information and communications technology), electronic media and call centers has become a significant part of Karachi business hierarchy. Call centres for foreign companies have been targeted as a significant area of growth, with the government making efforts to reduce taxes by as much as 80 per cent in order to gain foreign investments in the IT sector.
d) Karachi Stock Exchange
Karachi Stock Exchange is Pakistan's largest and oldest stock exchange, with many Pakistani as well as overseas listings. It has been declared as the “Best Performing Stock Market of the World for the year 2002”.
KSE has been well into the 4th year of being one of the Best Performing Markets of the world as declared by the international magazine “Business Week”. Similarly the US newspaper, USA Today, termed Karachi Stock Exchange as one of the best performing bourses in the world.
e) Industrial revolution
Karachi also has a huge industrial base. There are large industrial estates on most of the fringes of the main city. The main industries are Textiles, Pharmaceuticals, Steel, and Automobiles. Apart from these, there are many cottage industries in the city as well. Karachi is also known as software outsourcing hub of Pakistan. It also has a rapidly flourishing 'Free Zone' with an annual growth rate of nearly 6.5 per cent. An expo center has also been set up in Karachi and is now available to host many regional and International exhibitions.
Dozens of new manufacturing units are also being built near the Pakistan Steel Mill. Farm businesses line the SuperHighway route. SITE Manghopir is the biggest industrial area of Pakistan with more than 4000 factories. New Industrial zones have come in the past like Landhi, Korangi, FB Area, North Karachi and Port Qasim.
Karachi is also home of major automobile manufacturing companies. Toyota is in the process of increasing production capacity to over 120,000 units per annum. Suzuki Motor Company is also located in Karachi. The manufacturing plant located in Bin Qasim has a production capacity of 150,000 vehicles per year. Among others, Millat Tractors, Adam Motor Company, Daihatsu, HinoPak Buses and Trucks manufacturing plants are also located in Karachi.
f) Banking sector
The banking and insurance sector in Karachi has reaped the benefits of industrialization. One may see new branches of local and international banks all over Karachi. From bank to credit cards, paper money is becoming the order of the day in this city. Car loans from numerous banks have allowed the younger generation to go for the hot cars.
g) Transportation
Despite the growth and development of transport infrastructure elsewhere in the country Karachi remains the country's transport hub. Currently the city's two ports, Port of Karachi which is Pakistan's largest and Port Qasim, are central to nearly all shipping in Pakistan. The airport of Karachi, Jinnah International Airport, also known as Quaid-e-Azam International Airport, is the largest & busiest airport in Pakistan and handles 6 million passengers a year. The airport also receives the largest number of foreign airlines, a total of 27 airlines fly to Jinnah International predominantly from the Middle East and South East Asia. All of Pakistan's airlines use Karachi as their Primary hub including Pakistan International Airlines, Aero Asia International, Airblue and Shaheen Air.
h) Fisheries
Karachi is the biggest fisheries hub in Pakistan. Fishery plays an important role in the Karachi's economy. It provides employment to about 300,000 fishermen directly. In addition, another 400,000 people are employed in ancillary industries. It is also a major source of export earning. The Karachi Fish Harbour and Korangi Fish Harbour are two major fish harbours in Karachi.
i) Resulting problems
- Environmental problems
Karachi is the center of all business activities. Thousands of vehicles roll on the roads of Karachi. The City Administration is trying to introduce CNG buses and rickshaws in the city in the coming years.
- Industrial pollution
- Social problems
- Traffic woes
- Immigration
- Emergence of slums
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