The year 2020 will long be remembered as the most devastating in terms of human lives lost due to the emergence of the coronavirus and its debilitating impact on world economies.
Pakistan was no exception, but the redeeming factor during this period has been that it was not without encouraging positives for the country. First, the government’s strategy to contain the pandemic through smart lockdowns and a relief package for the poor proved largely successful. The initiative also received unqualified praise from the world community and the WHO. Consequently, the adverse effect of the first phase of the pandemic attack was greatly mitigated.
The second positive move by the government was to make sure the economy stayed alive and kicking, because it was rightly felt that this eventuality could kill more people from hunger than from the virus. The biggest initiative in this regard was granting industry status to the construction and housing sector and the announcement of an incentive package for investors. The construction industry is linked to at least 40 other industries and it was rightly thought that investments in this sector would have a significant knock-on effect on those industries. Reportedly, as a result of this initiative, industries such as cement, steel, glass, and paint have been operating at full capacity.
The incentive package for the construction industry had a cut-off date of December 31, which also applied to individual home buyers who were exempt from declaring their sources of income. In view of the demand from the construction industry and understanding that the timeframe provided for investments under the incentive package was not sufficient to achieve the objectives of the initiative, the government has rightly granted an extension on the date of the fixed tax regime. for one year in addition to extending the revenue non-disclosure date to June 30, 2021. At the same time, projects that were due to be completed by September 30, 2023 have also been extended for one year. The approval of these measures was given in a meeting chaired by the prime minister to review the progress in the incentive package granted to the construction industry.
The meeting revealed that the FBR has so far approved projects worth Rs 186 billion under the concessions granted to the construction sector; there are also projects worth Rs 116,000 crore in the form of drafts and the approval process of other projects valued at Rs 136,000 crore is also underway in Punjab; The investments are likely to generate economic activity to the tune of Rs 1.5 trillion in addition to creating 2.5 lakh jobs in Punjab.
During the year 2020, the government also announced easy loans for people who want to build their own houses with the finances provided by the banks that have set aside an amount of Rs378 billion to advance loans until December 31, 2021. For a house that will be built on a plot of five marlas the profit margin will be five percent while for a house of ten marlas the interest will be seven percent. The government also announced a subsidy of Rs300,000 each on the first hundred thousand houses built after the announcement of this plan. For incumbent governments and parties that aspire to win the people’s right to vote to govern the country, housing is of great political importance.
Although successive governments have sporadically deployed initiatives in this regard, none of them showed the kind of commitment and dedication to confronting the country’s housing shortage, particularly for the poorest segments of society, as the government of the PTI. The magnitude and scope of the effort is also unparalleled.
The Federal Employees Housing Authority has also launched different schemes including joint ventures on private land and government programs on government land and joint ventures with provincial governments. Currently working on the Bara Kahu project where 3,282 plots are planned; Sky Garden in Islamabad in 5,198 plots and 3,240 apartments in G-13 Islamabad. It also recently launched new projects including the construction of 1,467 apartments in G-13 Islamabad, 3,432 apartments in Chaklala Heights; Skyline Apartments in Islamabad numbering 3,945 and Life Style Residency Lahore for 1,258 apartments.
The government has also signed MoUs with provincial governments for housing projects that include 46,000 apartments in Balochistan, including 16,000 for fishermen, and 798 apartments in AJK. Land acquisition in different cities is ongoing and in some cases planning and other legal requirements have also been completed. It is pertinent to point out that the number of people who applied for the houses amounts to millions.
All of this seems very encouraging and indicates the government’s commitment to reactivating the incipient economy, as well as to solving the housing problems of lower-income groups. Investors in the construction industry believe that the successful implementation of the planned schemes will trigger great economic activity in the country that will not only strengthen the construction industry but also help in the rise of downstream industries in addition to creating millions of jobs.
The multiplier effect of this huge investment will generate infinite momentum for the economy as a whole. People also appreciate the efforts of the government regarding the construction of low-cost housing. Hopefully, by the time the government completes its term, the combined effect of the above initiatives will have largely delivered on the government’s promise to build five million homes and create millions of jobs.
One thing to remember: these projects take time to mature and create the desired impact. Despite the difficult economic situation, the government has been successful in putting in place the necessary steps to set the direction.
The writer is a freelance contributor.
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