ISLAMABAD: Prime Minister Imran Khan on Friday announced a big incentive package for the construction industry that includes a subsidy of Rs30 billion for the Naya Pakistan Housing Project (NPHP) so that people could build their dream house at an affordable cost.
He said that due to the adverse impact of the coronavirus on the country’s economy, the government had obtained a recess in international obligation till Dec 31 this year and people investing in the construction industry would not be asked about their sources of income.
This facility would last only till Dec 31, 2020 and everyone should avail it, the prime minister said while addressing the nation after chairing the first meeting of the National Coordination Committee on Housing, Construction and Development.
Incentive includes Rs30bn subsidy for Naya Pakistan Housing Project; banks asked to set aside 5pc of their portfolios for house financing
“The government has also spoken to the State Bank of Pakistan (SBP) and all other banks and asked them to set aside five per cent of their portfolios for house financing. This comes to about Rs330 billion,” he added.
“We are offering these incentives because we have spoken to the international community and have relayed that our economy is primarily undocumented […] so we have until December 31,” he said.
PM Khan asked the construction industry and investors to “take advantage of the opportunity”, as the government tried to mitigate the economic impact of the Covid-19 outbreak. He said that on the construction of each house the government would provide a subsidy of Rs300,000. “This means a subsidy of Rs0.3 million each will be given on the first 100,000 houses constructed,” he added.
“Further, those people who borrow from banks to construct their homes will be given a subsidised interest rate. The interest rate for a five-marla house will be five per cent and for a 10-marla house it will be seven per cent,” he said.
Prime Minister Khan said that after consulting the provinces, the government had decided to reduce the number of NOCs [no objection certificates] and made a one-window operation in all the provinces. “There will also be a time limit within which approvals would have to be granted by the relevant authority,” he added.
He said taxes had also been reduced in the provinces and now investors should take advantage of this short window of opportunity.
Earlier, the prime minister said the main objective of the NPHP was to provide housing to the common man. “Initially, we faced many obstacles in our journey,” he said, citing a lack of foreclosure laws.
He said that in India house financing by banks was 10pc and in Europe almost 90pc, but in Pakistan it was 0.2pc, adding that the first step was to address this issue.
The prime minister said the purpose of the National Coordination Committee on Housing, Construction and Development was to remove obstacles in the way of the construction industry and for this purpose the provinces were also taken on board.
The premier will himself preside over the committee’s meeting every week.
“Covid-19 pandemic had caused a recession across the world, leaving countries scrambling to keep the economic wheel turning. [Therefore] we have decided to keep the economy running through the housing and construction sector,” he said, adding that it would also create job opportunities.