The government must be praised for presenting the first-ever policy on small and medium enterprises (SMEs), a much-neglected sector which has been playing its due role in strengthening and stabilizing the economy of the country. The policy offers special incentives and facilities for the businesses by the government to help them improve the economic wheel. Though the Small and Medium Enterprise Development Authority (SMEDA), established in October 1998, has been working to promote SMEs in Pakistan as well, it however, lacked directions and works under an outdated mechanism. Officially, there are more than five million economic units in the country, of which 99% are SMEs.
These businesses are not only the main source of employment but also account for 40% of the country’s gross domestic product (GDP) and 25% of exports. The present government, while approving the SME Policy of 2021-25, plans to provide incentives and facilities to SMEs. Announcing the policy on Wednesday, Federal Minister for Industries and Production Makhdoom Khusro Bakhtiar said that there were more than one million companies operating in the SME sector while there were about 4,000 manufacturing units in large scale manufacturing. Up to 78% of employment is related to the SME sector. He says that SMEs have been divided into three levels of low risk, medium risk and high risk. It will be easier for new business start-ups to obtain a no-objection certificate (NOC). Special incentives will be given to those doing business in SMEs; women doing business in the SME sector will be given 25% special tax rebate, Rs 23 billion has been allocated for access to the SME sector. Up to 4,200 acres have been allotted for the SMEs in different cities of the country where 19,500 plots will be provided on easy installments. SMEs will get rid of the long process of obtaining NOCs.
Minister Makhdoom Khusro Bakhtiar says that under the SME policy, special discounts of 57% to 83% would be given to productive businesses. The purpose of the policy is to facilitate SMEs and many facilities will be provided to the entrepreneurs at every step. The policy aims at facilitating business by getting rid of the complex and outdated system.
To facilitate their integration into the mainstream, not only will the tax rate on them be reduced but also a transparent e-inspection system will be introduced which will reduce the discretionary powers of inspection officers and the possibility of harassment of industrialists. Good luck to the government and the policy!