At a time when the market is uncertain and there are global developments hampering growth, Pakistan decided to look inwards to improve the economy. The incentive package provided to the construction sector is a huge boon in these uncertain times to keep capital flowing in this difficult period.
The current build-up of the sector allows and encourages many people to invest, creating job opportunities, particularly those for daily wagers at this crucial time. The government is also quite adamant about fulfilling its own plans via this initiative which involves the subsidy on the Naya Pakistan Housing Authority with a 90 percent tax break in the offing – which might turn a few heads towards this endeavour. With particular focus on projects such as the housing scheme and CPEC, the government is attempting to kill multiple birds with one stone; provide relief to daily wagers, keep the economy running and set us up for whenever this period of contraction passes us by, at least in theory.
With the International Monetary Fund (IMF) freezing the bailout plan and releasing immediate funds, along with the ease of restrictions, there is a great chance that the construction industry will survive the crisis. But this is only possible if this back to business call does not attempt to revert to the carefree attitude of the pre-corona times; keeping all open sites virus free is fundamental.
Where other sectors in the economy is looking towards loans to sustain their business cycle, the construction industry will create a balance between economic activity and social distancing at this time. The fixed tax regime introduced in the ordinance will bring the coherency in the sector that was needed for a long time due to concerns of taxation and subsidy provision. At the same time, if the Naya Pakistan Housing Authority reaches materialisation, it will be a huge asset for the state itself and will set a new precedent with parties in power shifting focus to human development from the grassroots, especially during such times. As a next step, with health concerns a major priority, perhaps offering incentives in this sector will also be to our advantage.
