Introduction:
Prime Minister Imran Khan launched an incentive package for the building sector in April 2020, despite the upheaval caused by the Covid-19-induced epidemic. The premier designated the sector as a “industry,” with the goal of boosting economic growth and expanding job opportunities across the country.
At the same time, the government announced plans to build low-cost housing units for lower-income people around the country in order to address a 10-million-house shortfall.
Since then, there has been a surge in local investment in the construction sector, but international investors have remained wary of investing in this area.
The government backed the industry and launched amnesty programmes, putting it on the road to recovery. However, foreign direct investment is needed to speed up the process in order to fulfil the rising demand for housing and make a profit for investors.
However, in order to meet the aim, the government must make this business attractive to international investors while also securing investment. You may also like to learn about the Blue World City.
What is the opinion of a professional?
- Mian Anjum Nisar, the former president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), said Pakistan has to do its homework in order to attract significant foreign direct investment (FDI) in the long run. It is urgently needed since, despite giving tax benefits and guarantees of a one-window facility, Pakistan has been unable to attract major international investment.
- Mr. Nisar continued, “Pakistan will continue to receive FDI through the China-Pakistan Economic Corridor (CPEC), and it may further expedite inflows by securing broader domestic socio-political support for CPEC projects and addressing procedural impediments that hinder their timely execution.
- ” However, in order for this industry to thrive, the country would require significant foreign investment, as the massive increase in exports and remittances will only be a short-term boost.
The construction industry contributes a large amount of GDP:
According to estimates, Pakistan’s construction sector contributed between 2.3 percent and 2.85 percent of the country’s GDP over the previous five fiscal years, although analysts say that it is worth between 10 and 12 percent of the entire GDP.
Because it supports more than 42 auxiliary industries, such as aluminium, brick, cables, cement, fixtures, glass, kitchen and bathroom fixtures, marble, paint, steel, tiles, transportation, warehousing, and wood. As a result, it is clear that the construction industry has a significant influence on the whole economy.
What is the strategy?
The government of Pakistan has a comprehensive strategy to maximise the benefits of the construction sector, the first of which is to offer cheap housing through the Naya Pakistan Housing Programme (NPHP), which was started in 2019 and is now operational across the country. During the PTI government’s term, the plan is to build 5 million housing units.
The plan’s other component is to put the economy on a growth path by offering a variety of job possibilities. To guarantee that these objectives are realised, the government established the National Committee on Housing Construction and Development (NCHCD), which monitors the building industry to ensure that any obstacles are resolved and that construction operations continue.
Incentives are available:
- One of the most attractive features of this package is that investors are not required to identify their sources of income prior to participating in building projects. This is the main draw since all a buyer needs to do is make a payment if he wants to acquire a home.
- “Builders will be encouraged to invest their undocumented money in property and construction as a result of the ‘no questions asked’ approach.” Apart from providing legal protection for such persons, this effort would encourage people to engage in real estate.
- “It will also promote the expat community, since they would be spared the time-consuming paperwork that comes with buying or building a property,” one real estate agent argues.
Pakistan’s Construction Industry’s Future:
- Despite Pakistan’s remarkable achievement in the construction sector, there are a few dangers that must be addressed in order for this sector to thrive. Political unrest, pervasive corruption, and a bleak business climate are just a few examples.
- The government must implement changes to control the whole Pakistan real estate sector, allowing the construction industry to operate better and contribute more to the country’s GDP.
- Pakistan’s construction business is in its initial days, and the government must take bold actions to eliminate obstacles such as eliminating corruption, digitising the sector to promote transparency, and enacting building rules that would appeal to international investors.
Will Pakistan’s economy be revived by the construction industry?
- Prime Minister Imran Khan announced an incentive package for the building sector in April 2020, in the middle of the chaos caused by the Covid-19-caused pandemic.
- The head of the sector was given the task of “industry,” with the goal of assisting monetary development and increasing job possibilities across the country.
- Simultaneously, the government announced that it will create low-cost housing units around the country for lower-income people in order to address the country’s housing shortage of 10 million people.
- Since then, there has been a surge in local interest in the construction business, but international investors who are inexperienced with the industry have refrained from investing.
- The government supported the industry.
Foreign Direct Investment (FDI) is a long-term investment strategy:
Mian Anjum Nisar, the former president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), said Pakistan has to do its homework in order to attract large amounts of foreign direct investment (FDI) in the long run.
It is a critical necessity, since Pakistan has been unable to attract significant international investment despite giving tax benefits and assurances of one-window convenience.
Mr. Nisar continued, “Pakistan will continue to receive FDI through the China-Pakistan Economic Corridor (CPEC), and it may further expedite inflows by securing broader domestic socio-political support for CPEC projects and addressing procedural impediments that hinder their timely execution.”
Author Bio
Muhammad Junaid is a CEO of VM Sol, senior Analyst, and Search Engine Expert. Extensive experience being an IT Manager in Kingdom Valley Islamabad. Work for years with local and international enterprises. Also, represent well-known brands in the UAE.
