Housing Sector – A Step Forward for Economic Revival

ISLAMABAD, Jul 19 (APP): It is hoped that incentives for the housing sector will provide the economy with breathing space and help the country fight against challenges like slowing growth, balance of payments, current account deficit, price hike and above all, the pandemic COVID19. The government leaped forward with a bundle of incentives to fight these odds and Prime Minister Imran Khan himself unveiled the package for builders and other associated sectors during first week of April. “Our decision is aimed at reviving economic activity in the country. People investing in this sector during the year 2020 would not be asked about the source of income. They would also benefit from fixed tax regime”, the Prime Minister said. His package included tax incentives, waivers and subsidies in sales tax, capital gains tax and withholding tax. “Fixed tax at a rate of per sq yard or per sq meter would be charged from investors. Those investing in Naya Pakistan Housing Program would be given 90% rebate in fixed tax.”

The Prime Minister has announced a subsidy on five and 10 marla houses, allocation of 5 percent banks’ financing for house-building and a one-window operation to facilitate builders. He said that for the construction of affordable houses for middle and lower classes under the Naya Pakistan Housing Project, an amount of Rs 30 billion had been allocated as subsidy for its initial phase.

“The mark-up on bank loans for houses up to five and 10 marlas would be five and seven percent respectively that would help boost the economy”, the Prime minister said. “We are also simplifying the cumbersome process of loan processing, NOCs and taxation.”

The National Coordination Committee would play a role in removing hiccups in the process relating to the State Bank of Pakistan and commercial banks on house-building finance.

“We have also decided to cut down the number of no objection certificates (NOCs), launch a web portal for one window operation and actions would be time bound”, the PM informed.

Imran Khan said that the COVID19 pandemic had resulted in global economic recession of which Pakistan was also a victim. “We took the decision of incentivising the housing sector as it will generate economic activity and jobs and provide shelter to the homeless poor in the country.”

The government has also decided not to question the source of money spent in the housing sector till December 31, 2020 and the Prime Minister urged the investors, builders and people to avail the opportunity as it was an unprecedented step taken by any government in Pakistan.

The government has passed `the Naya Pakistan Housing and Development Authority (NPH&DA) Bill, 2019 to implement NPHP and the scheme recorded a mammoth response with millions of people registering with the program. The construction sector is one of the major contributors to the country’s economy, employing eight percent of the total labour force. As the country requires 400,000 units annually, the NPHP would mitigate this burden. Prime Minister Imran Khan and his team are on their toes to make the NPHP projects a success.

Commending the pro-poor policy of the government, Minister for Information and Broadcasting Senator Shibli Faraz said, welfare of the poor and vulnerable segments of the society was the prime focus of Prime Minister Imran Khan. “Announcement of the historic package for the construction industry was a timely step as the sector would benefit more than 40 allied industries resulting in economic revival.”

He reiterated the government’s seriousness in promoting the housing sector and said the National Coordination Committee on Housing headed by General Hyder has been created to remove bottlenecks.

The government is providing facilities to the construction sector by removing hurdles and giving incentives in the shape of tax reduction, one window operation and simplifying the NOC process, he remarked. “Our target is to construct 100,000 houses in the first phase.”

“It was the objective of the government to materialize the dreams of lower income people of having houses by easing the cumbersome process of getting no-objection certificates, approval of house designs, power and gas connections and above all bank financing”, he stated.

The commercial banks had been issued directives to allocate five per cent of their lending portfolio for the construction industry that would make over Rs 300 billion while the government would also provide Rs 130 billion subsidy to the poor.

“The government desires the builders and developers to take full advantage of this package and start their projects before December 31″, the minister said.

Image Credits: Associated Press of Pakistan

Chairman Naya Pakistan Housing Development Authority (NPHDA) Lt. Gen. (retd) Anwar Ali Hyder also mentioned the government’s vision of incentivizing the construction industry for the benefit of multiple industries, overall economic activity and job creation. He expressed the hope that a simplified documentation process and other measures to ensure ease of doing business would help attract more and more investors to invest in the construction industry.

“It was difficult for an investor to get approval in the past, but now the government has eased the ‘Approval Regime’ to facilitate the investors of the construction sector”, he said.

The chairman said the NCC established for the housing sector would also play its role in removing hiccups in the process relating to the State Bank of Pakistan and commercial banks on house-building finance. ”It would also ensure simplification of the process of loan disbursement and remove other hiccups.”

He urged the investors, builders and people to avail the opportunity by December 31, 2020 as it was an unprecedented package announced by any government in the country.

Image Credits: Associated Press of Pakistan

He said the investors investing in the construction industry till December 31 would not be asked for their source of income. They should avail this opportunity as it was an unprecedented step taken by any government in the country.

Mohsin Sheikhani, Chairman Associations of Builders and Developers of Pakistan (ABAD) welcomed the package with the remark that in 70 years, for the first time any government had declared the housing sector an industry. This has been under discussion at every forum. This measure would help achieve the target of constructing five million houses and create 15 million jobs, Sheikhani said. “If initially the government starts with one million houses, it would create 2.5 million jobs and revive 40 to 72 allied industries. The package would be very useful for construction industry”, he said. He noted that COVID19 has slowed down economic growth across the world but we believe that brisk advancement on this project would help bring an economic turnaround. “The Construction industry is the backbone of our economy and its flourishing would help overcome housing units shortage, growth of allied industries and job creation”,  Sheikhani said

Image Credits: Associated Press of Pakistan

Abid Qayyum Sulehri, an economist and Executive Director SDPI, saw the construction sector as a future driving force for the economy. As he welcomed the Prime Minister’s package, he also pleaded more incentives to benefit the common man. “People should be given the facility to pay a bearable monthly installment for their houses to make them ultimately the owner of these houses.” He suggested creating harmony between the public and private sector and extend taxation facilities across the board for all housing and allied sectors. Suleri proposed NPHA to encourage private builders and developers giving them the target to construct low cost housing units and banks should start providing mortgage on easy conditions. The government’s sincere steps would bear more fruits.

Image Credits: Associated Press of Pakistan

Builders and real estate agents have also seen this package as a major initiative for the revival of the sector as they hoped the government incentives would definitely restore confidence of the local and foreign investors. “The key factor is investors’ confidence and giving the construction sector the status of industry would help restore confidence of the investors. We are grateful to the PTI government”,  said Chief Executive Officer of Makeen Marketing Pvt. Limited Hassan Talal, a builder associate of Bahria Town and Blue World city project. “Rationalization of taxation would also have a positive impact. NPHP would also help boost the construction industry”, he noted. Talal suggested construction of high rise buildings to meet the demand of residential units and bridge the gap between small and mega construction projects.

Image Credits: Associated Press of Pakistan

Muhammad Ahsan, a builder and Interior Designer saw the incentive package as a ‘well in time endeavour’ of the government for putting the construction sector back on track and the revival of the economy. “The boom in the construction sector would provide business to 40 sectors and generate employment. If the pace continues the target of constructing five million houses would be achievable”, he noted. He sought incentives for contractors and small builders in getting bank loans, guarantees and securing their business. He also pleaded the plight of labour seeking health, insurance and other facilities for this segment for being always at risk of injuries at workplace. “They play a key role in the flourishing of this sector but lack incentives in case of injuries or disabilities.”

Image Credits: Associated Press of Pakistan

Private housing societies also see the package as a step forward for boosting real estate business and describe it a marvelous job of the government. “It is the best any government could offer for the sector in an era of turmoil due to COVID19. It would help steer through the crisis times”, said Muhammad Mansha Sahi, Secretary Civilian Cooperative Housing Society (Soan Garden). “But, we want the implementation of the package in letter and spirit. Our sector is also hit by mafias and we desire the government’s focus to curb this curse”, he demanded. He commended the decision of giving construction sector a status of industry and hoped it would help the sector flourish. “This sector has much potential if the confidence of investors is restored.”

Image Credits: Associated Press of Pakistan

Stay tuned to Baaghi TV for latest news and updates!

We will continue to fight for the rights of Kashmiris: PM Pakistan

Asset details of PM’s Special Assistants and Advisors, released by Federal Govt

PM’s steps for welfare of the poor will change nation’s destiny: Asad Qaiser

Facebook Notice for EU! You need to login to view and post FB Comments!