A detailed analysis
From a humanistic perspective Imran Khan’s Naya Pakistan Housing Program will go a long way. In an impoverished country, many dream of 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 and due to other economic circumstances being unfavorable, they fail in doing so. Thanks to this initiative, millions will now live peacefully under the roofs of their own houses. This programme is not for the lobbyists or land mafias or the higher ups in 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.
Construction is a major industry throughout the world accounting for a sizeable proportion of most countries’ Gross Domestic Product (GDP). The rise of the economies of Japan, Germany and Europe 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 snowball effect on the whole economy in a chain like reaction. Some of the industries that benefit are cement, iron, steel, timber and wood, marbles, 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, fibers, furniture, electrical appliances and many others.
In 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, hence acting as an economic catalyst. According to a report by FBR, construction helps move about 40 other related industries in Pakistan. Construction industry also attracts foreign investment. With the right health and safety regulations, foreign investors feel content investing in construction in any economy. The Dubai-based Emaar group of industries is a noteworthy example. Investing in property is also a big business in Pakistan as it is sure to give back in most cases.
Once again this initiative will have a cyclical effect on the economy. It will pay off in dividends for decades to come financially as well emotionally for people who never thought they could have a house they could call their own. In Pakistan governments tend to learn with experience of others and it is quite possible that governments ahead emulate this successful programme. The advantages of growth on similar patterns again in the future would be great!
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 a 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 with 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 is no withholding tax on transactions thereby encouraging financial movement within and with the respective sector. Low-cost housing of all sorts within the programme is exempted from 90 ercent of fixed taxes. A subsidy of Rs 300,000 was given to the first 100,000 houses constructed/to be constructed. Loans with mark up as low as five percent for five-marla houses and 7 percent 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 source of funds. This will encourage more activity in the sector.
Banks were earlier told to keep aside five percent of their entire portfolio for this industry also. This comes out to be Rs 330 billion. Earlier this month, Khan further allocated a Rs30 billion subsidy for the Naya Pakistan Housing Program which is building accommodation 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 Imran 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 programme alleviates unemployment for millions of Pakistanis.
Once again this initiative will have a cyclical effect on the economy. It will pay off in dividends for decades to come financially as well emotionally for people who never thought they could have a house they could call their own. In Pakistan governments tend to learn with experience of others and it is quite possible that governments ahead emulate this successful programme. The advantages of growth on similar patterns again in the future would be great!
