Islamabad Low-cost Houses to Home Financing Growth; Infocus Weekly Briefs

by M. Wasim

January 9, 2021

Low-cost Houses in Islamabad

Prime Minister Imran Khan on Thursday said that with the provision of 12,400 low-cost and quality apartments to residents of Islamabad Katchi Abadis (slums) for the first time in country’s history, the government is fulfilling its promise of low-cost housing for the poor and middle classes. “Loans of Rs. 38 billion have been provided to people for the construction of their own houses,” Imran Khan said while presiding over the meeting of National Coordination Committee on Housing Construction and Development.

The meeting was told that the Capital Development Authority (CDA) and Naya Pakistan Housing Authority will provide subsidy for the flats in Islamabad to keep the monthly installments at minimum level. The flats will have all civic facilities. The PM also emphasized that boundaries of all the cities should be specified to check the unorganized expansion and protect green areas.

Growth in Housing Finance

Recording an unprecedented growth of 85%, the State Bank of Pakistan (SBP) on Thursday reported very high growth in financing to the housing and construction sector. As banks’ outstanding credit for the housing and construction sector increased by Rs163 to Rs355 billion during 2021.

In October 2020, the government introduced a Markup Subsidy Scheme, commonly known as Mera Pakistan Mera Ghar (MPMG), aiming to boost the housing sector by extending cheaper loans to low-income families to build their homes. The SBP also advised the banks to increase their housing and construction finance portfolios to at least 5pc of their domestic private sector advances till December 2021. The central bank has also introduced a set of incentives and penalties to ensure compliance.

Under MPMG picked up momentum in 2021 as approvals for financing by banks grew from near zero to Rs117 billion in 2021. “The banks have received requests of financing of Rs276bn from potential customers, which indicates that approvals and disbursements will keep growing in coming months,” says SBP.

Tax on Solar Energy

Significance of Solar Energy in Pakistan

When the world is setting targets for a zero-carbon economy, supporting the trade of green products and imposing penalties on the high carbon sector, Pakistan government has imposed 17 % Sales Tax on solar panels, inverters and renewable energy equipment. The decision will jeopardize the very essence of the National Renewable Energy Policy which aims to acquire a 30 per cent share of renewables in energy mix by 2030.

Solar panels and invertors are becoming vital in new urban and rural housing developments as a good alternate source of energy. Pakistan Solar Association chairman Rana Ghulam Abbas said the increase in prices of solar energy systems or equipment is taken as a threat to the progress of the renewable energy sector and all the stakeholders foresee a drastic negative impact on the future of renewable in the country.

Judiciary declares Navy’ Commercial ventures Illegal

In a judgment this week, Islamabad High Court declared that the occupation of the Pakistan Navy`s sailing club and farmhouses constructed on the national park land is `illegal, without lawful authority and jurisdiction.” The court also ordered the Capital Development Authority (CDA) to take over the naval farmhouses, saying that navy had `trespassed on the land situated on the embankment of Rawal Lake, and that too in a protected national park area`.

 In its verdict, the court noted that `the engagement of the armed forces in an activity which is a transgression from the constitutional mandate e.g. undertaking commercial or real estate ventures etc. is definitely not in the public interest. The verdict was issued on a petition Eled in the year 2020 by a citizen against the construction of the navy club and denial of citizens` access to the lake.

Cement sales down in the new fiscal year

The total cement off-take went down 4.12% to 27.45 million ton in the first six months of 2021-22. Although, Domestic demand grew 2% to 24.06m ton while exports declined 32.47% to 3.39m ton in July-December, according to data released by the All Pakistan Cement Manufacturers Association (APMCA) on Tuesday.

Besides, local sales also fell because of seasonal factors. Construction activities slow down at the onset of winter season every year. While fall in exports is attributed to higher freight costs, port congestion and a slowdown in world economies.

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