PM Construction Package

Islamabad: Prime Minister Imran Khan unveiled a large incentive package for the construction sector on Friday, including an Rs30 billion subsidy for the Naya Pakistan Hou­sing Project (NPHP) so that individuals may build their ideal house at a low cost.

He stated that, owing to the negative impact of the coronavirus on the country’s economy, the government received a reprieve in international obligations until December 31 this year and that those investing in the construction business would not be questioned about their sources of income.

This opportunity will only be available until December 31, 2020, and everyone should make use of it, the prime minister stated after chairing the inaugural meeting of the National Coordination Committee on Housing, Construction, and Development.

Incentives include an Rs30 billion subsidy for the Naya Pakistan Housing Project and a need for banks to put aside 5% of their portfolios for housing finance.

“The government has also adviced to the State Bank of Pakistan (SBP) and all other banks, requesting that 5% of their portfolios be put aside for housing finance. This amounts to around Rs330 billion,” he added.

“We are giving these incentives because we have communicated to the international community that our economy is largely undocumented […] therefore we have till December 31,” he added.

As the government attempted to alleviate the economic impact of the Covid-19 outbreak, Prime Minister Khan urged the construction industry and investors to “take advantage of the opportunity.” He stated that the government would offer an Rs300,000 subsidy for the construction of each house. “This implies that the first 100,000 houses built would receive a Rs0.3 million subsidy,” he added.

“Furthermore, those who borrow from banks to build their homes will have their interest rates subsidized. “The 5% interest rate for a five-marla house will be, and the interest rate for a ten-marla house will be 7%,” he added.

According to Prime Minister Khan, the administration decided to minimize the number of NOCs [no objection certificates] and implement a one-window operation in all provinces after speaking with them. “There will also be a time restriction within which the competent authorities must provide approvals,” he said.

He stated that taxes in the provinces have also been lowered and that now is the time for investors to take advantage of this limited window of opportunity.

Earlier, the prime minister stated that the primary goal of the NPHP was to provide housing for the ordinary man. “Initially, we had numerous challenges on our journey,” he added, noting a lack of foreclosure rules.

He stated that whereas home financing by banks was 10% in India and over 90% in Europe, it was 0.2 percent in Pakistan and that the first step was to solve this issue.

According to the prime minister, the objective of the National Coordination Committee on Housing, Construction, and Development is to eliminate barriers to the construction sector, and the provinces have been brought on board to help with this.

Every week, the premier will preside over the committee meeting.

“The Covid-19 epidemic had triggered a global recession, leaving governments struggling to keep the economic wheel going. As a result, we have selected to keep the economy moving through the housing and construction sectors,” he added, adding that it will also create jobs.

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