The year 2020 will be long remembered as the most devastating in terms of human lives lost due the onset 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 strategy to contain the pandemic through smart lockdown and a package of relief to the poor proved a tremendous success. The initiative also received unqualified acclaim from the global community and the WHO. Consequently, the adverse effect of the first phase of the pandemic attack was mitigated to a great extent.
The second positive move on the part of the government was to make sure that the economy was kept alive and kicking, because it was rightly felt that this eventuality could kill more people with hunger than by the virus. The biggest initiative in this regard was giving the status of an industry to the construction and housing sector and the announcement of a package of incentives for the investors. The construction industry is linked with at least 40 other industries and it was rightly thought that investments in this sector would have a considerable spill-over effect on those industries. Reportedly, as a result of this initiative industries like cement, steel, glass and paint have been operating at their full capacity.
The package of incentives for the construction industry had a cut-off date of December31, which also applied to individual buyers of houses who were exempted from declaring their sources of income. In view of the demand of the construction industry and realizing the fact that the period given for investments under the package of incentives was not long enough to achieve the objectives of the initiative, the government has rightly granted an extension in the date for the fixed tax regime for one year besides extending the date for non-disclosure of income till June 30, 2021. At the same time the projects that were to be completed by Sept 30, 2023 have also been given an extension of one year. The approval for these measures was given in a meeting presided by the prime minister to review progress on the package of incentives given to the construction industry.
It was revealed in the meeting that so far the FBR has approved projects worth Rs186 billion projects under the concessions given to the construction sector; there are also projects worth Rs116 billion in the form of drafts and the process of approval of other projects valued at Rs136 billion is also underway in Punjab; the investments are likely to generate economic activity to the tune of Rs.1500 billion besides creation of 2.5 lakh jobs in Punjab.
During the year 2020, the government also announced easy loans for individuals wanting to build their own houses with the finances provided by banks which have set aside an amount of Rs378 billion for advancing loans till December, 31 2021. For a house to be built on a five-marla plot the mark-up will be five percent while for a 10-marla house the interest will be seven percent. The government also announced a subsidy of Rs300000 each on the first one hundred thousand houses built after the announcement of this scheme. For incumbent governments and parties aspiring to win the franchise of the people to rule the country, housing has great political significance.
Though successive governments have sporadically unfurled initiatives in this regard, none of them actually showed the kind of commitment and dedication to meeting the shortage of housing units in the country, particularly for the poorer segments of society, as has been done by the PTI government. The magnitude and extent of the effort is also unparalleled.
The Federal Employees Housing Authority has also launched different schemes including joint ventures on private land and government programmes on government land and joint ventures with provincial governments. It is currently working on the Bara Kahu project where 3282 plots are planned; Sky Garden in Islamabad on 5198 plots and 3240 apartments in G-13 Islamabad. It has recently also launched new projects including construction of 1467 apartments in G-13 Islamabad, 3432 apartments at Chaklala Heights; Skyline apartments in Islamabad numbering 3945and Life Style Residency Lahore for 1258 apartments.
The government has also signed MOUs with provincial governments for housing projects including 46000 apartments in Balochistan including 16000 for fishermen, and 798 apartments in AJK. Acquisition of land in different cities is in progress 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 has run into millions.
This all seems very encouraging and indicates the commitment of the government to the revival of the fledgling economy as well as solving the housing problems of lower income groups. Investors in the construction industry believe that successful implementation of the schemes as envisioned will unleash huge economic activity in the country which will not only reinforce the construction industry but also help in the emergence of the down-stream industries besides creating millions of jobs.
The multiplier effect of this huge investment will accrue infinite impetus to the economy as a whole. The people are also appreciative of the government’s efforts with regard to building low-cost houses. Hopefully, by the time the government completes its tenure the combined effect of the foregoing initiatives will have to a great extent fulfilled the government pledge of building five million houses and creating millions of jobs.
One thing needs to be remembered: such projects have a time-lag to mature and to create the desired impact. Despite the difficult economic situation, the government has been successful in putting in place the much-needed direction-setting steps.
The writer is a freelance contributor.
Email: ashpak10@gmail.com
