ISLAMABAD, Feb 12: The government is likely to ask banks shortly to make available Rs50 billion to help undertake effective housing and construction activities in the country.

An official source told Dawn here on Thursday that banks would be asked to lend their huge excess liquidity to the investors in order to promote business activities that had generally been marred by the ongoing controversy surrounding nuclear proliferation.

"We have been informed that banks are in a position to lend roughly Rs40 to Rs50 billion to the investors during 2003-04," he said adding that beside housing and construction, new loaning could also be made available to around 35 allied sectors.

The official said that all the four provinces have also been directed to accelerate their hunt for identifying land for starting new housing projects. "This process is slow and needs to be seriously pushed up as nothing has so far happened even after the directive issued in this behalf by the prime minister in early January this year," he said.

He pointed out that the focus of the current budget was to provide all possible support to housing, construction and manufacturing sectors. But regretted that much activity could not be seen.

The idea, he said, was to also help establish shopping malls in major cities, but then hastened to add: "This can only be done when banks adopt investor friendly policies."

Generally, he said, the banks were hesitant to extend a big number of loans to avoid the piling of their infected portfolios as it could land them in trouble at the hand of the National Accountability Bureau (NAB).

The official said that private sector credit has enormously increased from Rs68 billion to Rs160 billion during the current fiscal year and was mainly used by the businessmen for importing machinery and plants.

Nevertheless, he said that there was a need to make availableð0-#Šsubstantial loaning for the housing and construction sectors so that additional jobs could be created. The creation of new jobs, he said, was one of the major problems of the government and was causing unrest in the people specially the educated youth.

Since the IMF's three years $1.5 billion Poverty Reduction Growth Facility (PRGF) was coming to an end in October this year, he said, the government could consider in the next budget tax holiday for some sectors.

Although the minimum 5 per cent duty slab has been enforced, the government would look into the possibility of offering zero rated slab for the import of plants and machinery in the budget for 2004-05, he added.