There is plenty of discourse on economic issues these days. One aspect that needs attention is the revival of industry in Pakistan. The common perception is that Pakistan has somehow missed the bus in this regard. However, there is no way to transform economic development unless there is industrialisation. We refer to some literature (Sayeed 2002, Hamid and Khan 2015, World Bank 2013) in this article to present various aspects of the industrialisation debate. There are mainly two points of view here: one is that holds the neoliberal policies of the Washington consensus responsible for arresting industrialisation in Pakistan; and the other that does not focus on the role of the state or ‘state-society’ relationship and presents the neoliberal prescription of connecting infrastructure, cities, labour, production processes, efficiency, and technological innovation as the way forward. While there is an element of truth in both the above arguments. We think that the argument holding the Washington Consensus responsible for taking the focus away from industrialisation is more relevant. It is established in the political economy literature that state policies need to have an interventionist role to steer industrialisation in developing countries. The entire South East Asia and China achieved remarkable economic growth through industrialisation by adopting state-led policies by directing the manufacturing processes. In Pakistan, unfortunately, state-led industrialisation was forsaken since the late 1980s and particularly in the 1990s under the international financial institutions (IFIs) pushed neoliberal policies. These neoliberal policies of Washington Consensus, promoted by the IFIs and Western countries, had a disastrous impact on the industrial development in Pakistan. It led to what is called in the literature as the “premature deindustrialisation” in the country. As political economy literature illustrates, the state needs to divert resources to the nascent capitalist class to generate private sector led industrialisation Political economist Asad Sayeed (2002) has called Pakistan’s industrialisation experiment from 1970 onward as the “disjuncture years”. According to him “… in a political settlement, where a disjuncture between state and society exists, the dominant groups in society may still be powerful enough to influence state policy. But relative power in society will be disbursed to the extent that in order to maintain their property rights, the dominant groups have to make pay-offs to other social groupings or engage them in patron-client relationships. To make pay-offs, the state requires resources. The long-run sustainability of a disjunctural settlement is unlikely, as resource dole-outs for pay-offs will lead to a precarious fiscal situation.” In other words, it is important to employ a lens of state-society balance of power to analyze the industrial policy. Before 1970, the ‘superstructure’ of the state reflected the unequal balance of power of the societal ‘base’. After 1970, the balance of power between the state and societal forces was not feasible as patronage and pay-offs needed to maintain political stability were not sustainable. As political economy literature illustrates, the state needs to divert resources to the nascent capitalist class to generate private sector led industrialization. Pakistan successfully underwent the process of consumer goods import substitution before 1970 through its policies of state led industrialization. However, post 1970 and particularly in 1980s onwards, the state resources were captured more by unproductive groups. It did not give the kind of results needed to complete the economic transformation. The state felt that it did not have enough resources to make further pay-offs and instead opted for neoliberal policies under the Washington Consensus pushed by the West. However, neoliberalism did not lead to efficiency in allocations, it instead catalyzed the processes through reduction in tariffs and trade liberalizations, amongst others, that led to “premature industrialization.” The neoliberal policies have been largely negative for economic development and for the large-scale manufacturing sector in particular. This process of globalization and liberalization has led to structure of incentives where finance capital gives better returns than the manufacturing. The industrial entrepreneurs have adjusted to this finance capital led incentive structure and there is more focus on the financial sector and real estate market than manufacturing. Neoliberalism had such a disastrous impact on Pakistan’s industrial sector that by 1998, more than 4000 industries were either shut down or were in serious financial difficulties. From 2007 onwards, there is onset of deindustrialization. The key takeaway is that Pakistan should develop its robust industrial policy. It should revive that state-planned process of promoting industrialization. It should not implement the policies pushed by the IFIs and the Western countries that are tantamount to its homegrown and indigenously developed industrial policy. It needs to get back to the bus of industrialization, as it is the only way to catch up with development for developing countries like Pakistan. The writer has a social science background and can be reached on Twitter @FoqiaKhan Published in Daily Times, March 16th 2019.