“Major General Iskander Mirza, lately President of Pakistan, has relinquished his office of President and has handed over all powers to me. Therefore, I have this night assumed the office of President and have taken upon myself the exercise of the said powers and all other powers appertaining thereto.”

–Ayub Khan, October 1958

In October, 1958, General Ayub Khan led a military coup to oust the civilian government in Pakistan and became successful in establishing his military rule. The military government had taken control of the country under deteriorating economic conditions with fall in consumer exchange rate, shortage of food, and large-scale deficit financing by the government. Immediately, it showed its commitment to work on the country’s economic development as well as industrialisation. It introduced land reforms and set up education commissions. Private investment was heavily encouraged which gave a sharp boost to the growth rate of GDP in the West Pakistan. It rose from 3.1% to 6.7%. By battling inflation with measures like price control, the dependence on banking system to curb fiscal deficits also greatly reduced. The Green Revolution in particular proved to be the most successful set of agricultural reforms in Pakistan’s history that greatly expanding its agricultural productivity. The system of direct taxation was broadened while indirect taxation was kept to its minimum. Along with additional taxation, the tax to GDP ratio of the country rose from 6.1% to 7.6% by the end of Ayub’s tenure. Picking up the crippling economy was the utmost priority of the new government which it did not fail to deliver upon. Hence, the 1960s became the only period in Pakistan’s fiscal history when the government revenue actually exceeded the government expenditure.