Prime Minister Imran Khan on Friday announced a subsidy of Rs30 billion for the Naya Pakistan Housing Project (NPHP), urging the construction industry and investors to "take advantage of the opportunity", as the government tries to mitigate the economic impact of the coronavirus outbreak.
"This means a subsidy of Rs0.3 million will be given on the first 100,000 houses constructed," he said, while addressing the nation after chairing a meeting of the National Coordination Committee on Housing, Construction and Development in Islamabad.
"Further, those people who will borrow from the bank to construct their homes will be given a subsidised interest rate. The interest rate of 5 marla houses will be five per cent and for 10 marla houses it will be seven per cent."
The premier added that the government had also spoken to the State Bank of Pakistan (SBP) and all other banks, and had asked them to set aside five per cent of their portfolio for the construction industry. "This comes to about Rs330 billion."
In addition, "after consulting with all the provinces, we have also decided to reduce NOCs [no objection certificates] and have made a one-window operation in all provinces," Imran said, adding that there will also be a time limit within which approvals would have to be granted by the relevant authority.
He stated that taxes have also been reduced in the provinces. "Also, and this is only because of the pandemic, the source of investment [until December 31] will not be questioned. No one will ask where the funds came from.
"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.
He concluded his address by urging investors to take advantage of this short window of opportunity.
At the outset, the premier began his speech by saying that the main objective of NPHP was to provide housing to the common man. "But we faced many obstacles in our journey," he said, citing the lack of foreclosure laws.
"If you look at India, housing financing by banks is 10pc and almost 90pc in Europe. In Pakistan, it is 0.2pc," he said, adding that the first step was to address this problem.
"Then there were delays for the construction industry. They had various taxes, didn't get permission, had troubles with loans."
He maintained that the purpose of the NCC on Housing, Construction and Development was to remove obstacles in the way of the construction industry, adding that the provinces were also taken on board. The premier will himself preside over the committee's meeting every week.
He added that the 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 will also provide job opportunities.