It appears that the government’s various initiatives to uplift the construction sector are paying off. Minister of State for Information and Broadcasting Farrukh Habib has stated that there had been a massive increase in economic activity in the country, estimating that the government’s steps to boost the construction industry is bringing about an investment of around Rs1 trillion.
The steps that the Information Minister mentioned referred to the large incentive package for the construction industry announced by Prime Minister Imran Khan last year, a hundred billion rupees relief package for the construction industry in order to spur economic recovery. This included a subsidy of Rs30 billion for the Naya Pakistan Housing Project (NPHP).
The federal government is pinning its hopes on this sector, and for good reason. The construction sector has great potential to uplift the entire economy, simply due to the fact that it impacts activity in more than 40 other industries. A boost in the construction economy results in an upscale of all other industries. This package, for example, has led to an unprecedented increase in demand for the cement industry despite the pandemic. Roughly 30-35 percent of employment is directly or indirectly affiliated with construction. It is also important to note that the construction industry impacts the employment of mostly non-skilled workers, who are heavily impacted by the pandemic and rising inflation. Growth in this industry can mitigate the harsh blows of currency devaluation and inflation.
While commendable, going forward, the government must also consider a more holistic and diverse perspective. Issues of over-regulation, poor policy formulation and thoughtless planning still plague the construction industry and are worsened by more projects. Climate change and higher carbon imprints are also concerns the government needs to consider, as it allocates large amounts to revive the construction sector.