Is Karachi's Neglect Hindering Pakistan's Economic Growth?

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Is Karachi's Neglect Hindering Pakistan's Economic Growth?

Synopsis

Karachi, a pivotal city for Pakistan's trade, is suffering from neglect, leading to a significant economic slowdown. Learn how its acute water crisis and infrastructural issues are stifling growth in this insightful article.

Key Takeaways

Karachi is crucial for Pakistan’s economy, handling 76% of trade.
The city faces a water shortage of 650 MGD .
Inadequate infrastructure is a major hurdle for growth.
Karachi has lost out on Rs 3 trillion since 2010.
Government allocation for water remains insufficient.

New Delhi, Jan 1 (NationPress) The ongoing neglect of Karachi, a crucial city that handles 76 percent of Pakistan’s trade, is viewed as a significant reason for the stagnation in the country's economic growth, which has dwindled to below 3 percent.

As reported by Dawn, without resolving Karachi’s pressing water shortage and other infrastructural concerns, Pakistan is unlikely to meet its growth objectives.

The piece, authored by Mohammad Younus Dagha, a former Federal Secretary, highlights that Karachi has lost out on its fair share of over Rs 3 trillion since 2010. Had this amount been allocated effectively, the city would not be facing such dire circumstances.

“With the ongoing neglect towards Karachi, Pakistan has been trapped in a low growth cycle since 2010. The Prime Minister’s Economic Transformation Agenda aims for a growth target of 6 percent, yet only 2.7 percent was achieved in the first year. Pakistan will remain in this low-growth predicament unless it enhances the infrastructure of Karachi, which is vital, contributing 50 percent of national exports and managing 76 percent of the trade,” the article mentions.

Additionally, Karachi is grappling with a severe water crisis.

The city requires between 1,200-1,300 MGD (million gallons per day) of water but only receives around 550 MGD from Keenjhar Lake and 100 MGD from Hub Dam. Alarmingly, a significant portion of this water is distributed via tankers. The estimated shortfall is 650 MGD, or nearly 50 percent of the city's total needs.

“Agricultural landowners, using 95 percent of Sindh's water resources, pay merely 20 paisas for 1,000 gallons of water, whereas Karachi residents are charged Rs 1,000 for the same amount,” the article reveals.

Moreover, the provincial government has been reluctant to allocate additional water to Karachi from Sindh’s share as per the Indus Water Accord. The state government has sought a separate allocation from the Indus River System Authority (IRSA) for increased supply.

However, IRSA has reminded Sindh that the IWA specifies that its allocation includes water for both urban and industrial uses in Karachi, which should be prioritized.

The article notes that Karachi contributes 90 percent of Sindh's taxes and 60 percent of federal taxes, yet has not received its due share of over Rs 3 trillion from the Sindh government since 2010.

Despite the IWA allowing preferential treatment for Karachi’s water requirements, the Sindh government fails to comply, even if it impacts only a minor fraction of the province’s water resources.

Point of View

The ongoing neglect of Karachi is a critical issue that affects not only the city but the entire nation's economic landscape. It's essential that the government prioritizes infrastructure and resource allocation to harness the full potential of Karachi.
NationPress
20 Jun 2026

Frequently Asked Questions

What is the current water shortage in Karachi?
Karachi faces an estimated water shortage of 650 MGD, significantly affecting its residents and industries.
How much trade does Karachi handle for Pakistan?
Karachi handles approximately 76 percent of Pakistan's trade, making it vital for the country's economy.
What is the impact of Karachi's neglect on Pakistan's economy?
The neglect of Karachi has contributed to a slow economic growth rate of less than 3 percent, hindering national progress.
What has the government done to address Karachi's water crisis?
The Sindh government has been reluctant to allocate additional water resources to Karachi despite its dire needs and the provisions outlined in the Indus Water Accord.
How much tax does Karachi contribute to Sindh?
Karachi contributes 90 percent of Sindh's taxes and 60 percent of the federal taxes, yet has not received its rightful share in funding.
Nation Press
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