Construction sector builds the economy but needs attention

The construction industry continues to face severe obstacles shaking the confidence of builders, developers, and investors. The Government needs to direct more attention to this vital sector.



Finally, seven decades after Pakistan was born, the construction sector has received the status of being an ‘Industry’ and received a comprehensive package, which will help strengthen the national economy in the short and long term by providing job opportunities to thousands of skilled, semi-skilled, and unskilled workers and housing facilities to people.

Thanks to the current Imran Khan government, who understood the worth of the construction industry and implemented the election declaration of his party before the 2018 General Elections and announced an Rs. 100 billion relief package for the construction industry in April 2020.

The two major objectives included bridging the affordable housing gap through the Naya Pakistan Housing Programme, which was initiated in April 2019 to build five million houses and boost the national economy by creating employment opportunities.

The construction package included tax incentives, waivers, and subsidies for builders, developers, and property owners. Furthermore, to encourage investment in the economy, investors were assured that they would not be asked about their income sources.

Read More: Pakistan’s housing market is leading the economy: What has changed?

Affordable housing has been a vision of ABAD for many years, and the association has worked for its implementation with consecutive governments.

The organization never asked for financial support from the government and only requested basic amenities, including water, gas, electricity, and road access, to these Affordable Housing projects, but governments never worked on this.

The construction industry is the second biggest employer industry after agriculture globally. That is why the developed countries have focused on construction and housing and why special incentives were provided to the construction worldwide during Corona to avoid an economic recession.

The special package for the construction industry in Pakistan during the Covid-19 pandemic, when almost all economic activities came to a halt, saw the country gain economic momentum resulting in the start of several housing projects across the country.

Read More: PM Imran Khan announces ambitious construction package

However, due to a number of reasons, Karachi and Sindh are yet to get the fruits of this package. Overall, the construction industry contributes 2.53 percent to the country’s Gross Domestic Product (GDP) at present, and if certain hurdles are removed, this number can go beyond 10 percent within two years.

Furthermore, on the government’s instructions, the State Bank of Pakistan asked commercial banks to allocate five percent of their portfolios to house financing on low mark-up rates, and the government announced a subsidy of Rs 0.3 million for the first 0.1 million houses.


Although the incentives have increased activity in the construction sector, the Naya Pakistan Housing Scheme has not taken off in Sindh due to political differences between the Federal and Sindh governments. Both governments must realize that the national economy is suffering due to their political differences and bring forth positive solutions.

According to one estimate, almost 54 percent of people live in Katchi Abadis or slums in Karachi; it is high time they are provided with proper housing. ABAD has offered to reconstruct Katchi Abadis to phase out slums, but we are still waiting for approval and relevant policy from the government.

On the other hand, the construction industry continues to suffer from obstacles that have shaken the confidence of builders and developers and investors, and allottees.

In May 2017, the then Chief Justice of Pakistan, Justice Saqib Nisar, banned the construction of high-rise buildings in Karachi. At the time, more than 300 projects were in the pipeline and were affected by this order.

After two years, the ban was lifted. However, during this period, over Rs. 600 billion in investments was stuck, and thousands of daily wage earners were rendered jobless.

More recently, the present Chief Justice of Pakistan has banned the conversion of residential plots to commercial ones, although they were located on commercial roads in Karachi.

Read more: The Supreme Court’s verdict on Nasla tower is setting unsettling precedent

Once again, work came to a halt for many builders and developers on projects that were underway at the time, already having paid conversion fees (up to Rs 22. million for 1,000 square yard plots) to the Sindh Building Control Authority (SBCA), who then denied approvals of building plans.

It continues to affect builders and developers, and they are now considering moving their capital to construction-friendly countries.

Pakistan needs stable and long-term policies for growth. It is high time that people at the helm of affairs and the judiciary should take cognizance of the country’s current economic situation and take decisions delicately to help grow the economy and not damage our beloved motherland’s prime interest.

Mohsin Shaikani is a renowned builder and developer for more than three decades. He is current Chairman of the Association of Builders and Developers of Pakistan (ABAD). This is his fifth term as Chairman ABAD, and he is Patron-in-Chief of Allied Panel- a ruling panel of ABAD. He has also represented Pakistan in World Bank and Asian Development Bank.

The views expressed in the article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space. 

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