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ISLAMABAD: Prime Minister Imran Khan has made another move to revive the coronavirus-hit economy with an initiative to create a surge in the housing and construction sector with Rs 330 billion of mortgage financing by commercial banks in just 18 months.

The prime minister himself unveiled the plan for revival of the construction sector after the maiden meeting of the newly formed National Coordination Committee on Housing and Construction on Friday.

Commenting on the government's initiative, a leading property developer and businessman Ejaz Gohar said it was the first plan, which would make it affordable for low and middle income people to build houses with mortgage financing of as low as five to seven percent mark-up. The commercial banks would allocate five percent of their portfolio amounting to Rs 330 billion for the construction activities.

He noted that some Rs 20 trillion was circulating in the informal unregistered economy and now was the opportunity for the people to get the huge amount of money declared by investing in the real estate sector by December 31, 2020. Now a person with an income of Rs 30,000 to Rs 100,000 could build a house of 5-marla with the mortgage financing at 5 percent and that of 10-marla at 7 percent mark-up.

Ejaz said mortgage financing was started in the United States 82 years back to kick-start its economy.

The government will give a subsidy of Rs 30 billion for the construction of houses. The prime minister has planned to hold meetings of the Coordination Committee on Housing every week to remove hurdles that come in the way as Pakistan is far behind in terms of home mortgage financing as compared to the developed world.

As happened all across the world, the coronavirus pandemic had contracted Pakistan's economy as well and resulted in rise in unemployment and economic difficulties for the common man so the government's measures for the construction sector would be a much needed timely relief.

The coronavirus emerged as a deadly threat for the world at the start of 2020 and so far killed more than half a million people and ravaged the leading economies of the world, contracting world economic growth and completely closing down vital sectors like airline, travel and tourism industries.

Many economically strong countries like China, the United Kingdom, Italy and Spain were forced to impose strict lockdowns spread over months to stop the surging coronavirus.

However, economically fragile countries like Pakistan were caught in a dilemma as the option of complete lockdown was a recipe for disaster, especially for the vulnerable sections of society like daily wage earners and lower strata of society, who are a significant portion of population counting in tens of millions.

Prime Minister Imran Khan, known for his leadership qualities since his cricketing days, went for a policy of smart lockdown, balancing the need to halt the spread of coronavirus and keep the different sectors of the economy open at the same time.

The strategy largely worked and as of now the vital sectors of the economy are open and the economy is rolling along, with the number of coronavirus cases after hitting the peak are dipping on a daily basis. Now the number of recovered is more than that of the active COVID 19 patients in Pakistan. As many as 141,000 persons have defeated the virus.

In order to deal with the adverse effects of coronavirus, the government announced a relief package worth Rs 1.2 trillion on March 24, which was being implemented in the fiscal year 2020-21.

An important component of Pakistan's economic revival plan was the second phase of China Pakistan Economic Corridor (CPEC). Despite hurdles Pakistan and China went ahead with the second phase of mega project during the last two years.

After undertaking of the infrastructure, road and energy projects across Pakistan in the first phase, the focus was shifted to the building of eight special economic zones and socioeconomic and human development with the Chinese financial assistance of $1 billion. The Pakistan Tehreek-e-Insaf government established the CPEC Authority and appointed Lt General Asim Saleem Bajwa (Retd) which had a decisive impact as was evident from the progress on different projects undertaken under CPEC.

Copyright Business Recorder, 2020