Daily Times

Construction is a major industry throughout the world; accounting for a sizeable proportion of most countries’ Gross Domestic Product (GDP). The rise of Japanese/German/European economies to the present state from the ashes of World War-II, behind the magnificent industrial, agro-based and housing structures, is largely attributed to the construction industry. The construction industry has a snow-ball effect on the whole economy in a chain-like reaction. Some industries that benefit are cement, iron, steel, timber and wood, marble, tiles and stones, electrical and sanitary works, glass, paints and varnishes, electrical lightning, power and gas, horticulture, interior decoration, transport, light-heavy construction machinery, plastics, fibres, furniture and electrical appliances etc.

From the Pakistani context, construction and agriculture are industries that employ the most amount of people in the country. In them, construction is an industry that pulls the weight of other industries as it brings them into function and hence acts as an economic catalyst. According to a report by FBR, construction helps move about 40 other related industries in Pakistan. The construction industry also attracts foreign investment. With the right health and safety regulations, foreign investors feel content investing in construction in any economy. Dubai-based Emaar group of industries is a noteworthy example. Investing in property is also big business in Pakistan as it is sure to give back in most cases.

According to a report by FBR, construction helps move about 40 other related industries in Pakistan

From the reasons stated above, it is established that construction is not only essential for just about any nation, but it is more so especially for Pakistan. For reasons based around the sheer vitality of the booming construction industry for a developing economy, the present government decided to give a healthy push to it. Imran Khan introduced policies to develop this sector further. He started by introducing a project called “Naya Pakistan Housing Program” (NPHP) in 2018. In this, a fixed tax regime for builders and developers was introduced by Khan under which there was no withholding tax on transactions, thereby, encouraging financial movement within and with the respective sector. Low-cost housing of all sorts within the program is exempted from 90 per cent of fixed taxes. A subsidy of Rs 3 lakh was given to the first 100,000 houses constructed/to be constructed. Loans with mark up as low as five per cent for 5-marla houses and seven per cent mark up for 10 marla houses are offered to make it easier in terms of affordability for the desirous. Lastly, all parties’ income and finances to be used in the construction industry will be exempted from providing a source of funds. This will encourage more activity in the sector.

Banks were earlier told to keep aside five per cent of their entire portfolio for this industry also. This comes out to be Rs 330 billion.

Earlier this month, Khan further allocated a Rs 30 billion subsidy for the Naya Pakistan Housing Program, which is building accommodations in both metropolitans and smaller cities across Pakistan. This, he feels, will attract investment from all sectors of the country. It is also a visionary step by Khan in terms of job creation and overall economic activity generation. For starters, if on average, 15 to 20 people are employed in the construction of one house, then this program alleviates unemployment for millions of Pakistanis.

Lastly, from a humanistic perspective, this program will go a long way. In an impoverished country, many dream about owning a house or an apartment. Sadly, this dream doesn’t convert into reality for most. Men from a young age in our society are pressured into providing a home. Due to other economic circumstances being unfavourable, they fail in doing so. Millions will now live peacefully under the roofs of their own houses thanks to this initiative by the government. This program is not for the lobbyists or land mafias or the higher-ups in the bureaucracy who hoard land and exploit their powers and contacts to get what they want when they want it. It is for the common man who has longed to live in a house he can call his own.

The writer is a freelancer