Born in Bikaner, Rajasthan, in a Banjara family, 66-year-old Reshma was under treatment after being diagnosed with the disease years ago.
Reshma, known as Nightingale of the Desert, is survived by son Umair and daughter Khadija. Her funeral was held in Lahore and was attended by her relatives and well wishers.
"She had been in coma for the last month and was diagnosed with throat cancer some years ago," said doctor Rahim of the hospital where she was undergoing treatment.
Remembering her origins to the sandy lands in India, she had said: "People in India showered me with a lot of admiration. In Pakistan, people have given me respect. But in India also, they listen to me with lot of love. It does not matter to them that I am a Pakistani singer."
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Having received no formal education in music, Reshma was only 12 when she was spotted singing at sufi saint Shahbaz Qalander's shrine by a television and radio producer, who arranged for her to record the iconic song 'Laal Meri' on state-run Pakistan Radio.
"Singers of that level and magnitude are an institution in themselves and her passing away means a complete era has passed away. It is a huge loss," Taimur Rahman, lead singer of Pakistani band Laal, told PTI.
Some of her famous numbers include 'Hai O Rabba nahion lagda dil mera' and 'Ankhiyan no rehen de ankhyan de kol kol'.
Reshma, who has a massive and loyal fan following, received several national awards including 'Sitara-i-Imtiaz' and 'Legends Of Pakistan'.
Filmmaker Subhash Ghai used her voice in the film 'Hero', which featured one of her most famous songs 'Lambi Judai'.