SME SECTOR ANXIOUSLY WAITING COMPREHENSIVE SME POLICY

The Union of Small and Medium Enterprises (UNISAME) in response to request of Nadia Jahangir Seth, general manager of the Small and Medium Enterprises Development Authority (SMEDA) has recommended measures in thematic areas namely fiscal, tariff, access to finance, skill development, technology, infrastructure development, domestic market access, trade facilitation and other areas as per template prescribed by SMEDA.

In pusuance a meeting was also convened on 25th February 2020 by the provincial chief SMEDA Mukesh Kumar inviting suggestions from stakeholders namely UNISAME, FPCCI, KCCI, SITE Association, SME Leasing, PWMA, ABAD and SME experts.
The template presented requested identification of the challenges/issues with recommendations/proposals, rationale and expected outcome.

President UNISAME Zulfikar Thaver said The comprehensive SME policy 2019 which is completed needs to be announced forthwith and implemented in letter and spirit and this is the first and foremost requirement of the sector. There should be no delay in this he asserted.

The UNISAME Council has suggested lowering the tax rate to lessen the cost of doing business and not to burden the SME units already paying taxes.
The Federal Board of Revenue needs to target those who are not paying taxes and widen the tax net rather than increase taxes and make doing business expensive. The FBR needs to adopt friendly policies and pursue the non filers earnestly rather than targeting the filers who are paying their taxes.

Regarding tariff measures the council recommended reduction/exemption of import duties on raw and packing material to support domestic industry and also to make them competitive in global markets and the outcome will be that the country will witness increase in exports.

For SMEs access to finance, it is very important that the mark up rate is made affordable, it needs to be in single digit. The commercial banks need to learn risk management and also develope products for SMEs such as SME credit cards and pay as you earn schemes.

The council pointed out that most of the Skill Development Centres (SDC) are not functioning and many are working on low key. They need to be revived. Some textile units having imported machinery have to send their workers abroad for training which proves very costly. The SDC must have train the trainers programme to prepare many trainers.

There is no doubt that technology is the SIKKA RAIJUL WAQT. There is a technological gap and we need to work on war footings to fill this gap Thaver said.
Facilities and support for transfer of technology and reverse engineering are the need of the hour. The government must negotiate better terms under CPEC for transfer of technology, joint ventures, collaboration and partnerships for mutual and equal benefit.

The highways are being developed but the inner connecting roads needs to be included under the infrastructure development programme and land reforms are required to utilize the idle lands which the landlords are holding for capital gains. We need special economic zones (SEZ) and state of the art industrial estates which need to be developed for the SMEs and land given to them under pay as you earn schemes.

The supply chain calls for education on benchmark up gradation, logistics, warehousing facilities and this will lead to domestic market access and increase profitability of the primary and secondary sectors both. The primary sector is the source of raw material and the secondary sector is the value adder. The tertiary ( services) sector also plays an important role and SMEDA needs to work on all three sectors for best results.

Coming to the trade facilitation, it is very important that the Trade Development Authority of Pakistan (TDAP) establishes the SME export promotion bureau and sets up an SME gallery to exhibit SME wares and makes a portal . An SME chamber of commerce and industry is also required for meeting specific SME needs of domestic and international connections and interactions for import and export. The franchise business needs a boost in domestic and international markets. The fashion industry needs exposure in global markets. Our geographical indication items need to be promoted to traditional and non traditional countries.

Amongst other important suggestions, the council emphasized the need of a strong SMEDA with wide scope and equipped with personnel, funds and all out support from the government to outreach the sector and uplift it on fast track. Additionally the participants urged the modernization of banking, leasing, insurance and logistics and of course support,help, encouragement for modernization of SME units.
The sector also needs motivation which is lacking and a strong SMEDA could motivate the small to medium sized entrepreneurs to come out of their shells and join the mainstream. The upper medium sector is capable of putting up import substitution industries and needs to be facilitated without delay.

A survey is needed to determine the size and strength of the SMEs area wise and sector wise.

The SME Forum Pakistan sponsored by the State Bank of Pakistan is making efforts to
co-ordinate and hopefully will bring about integration of efforts of SMEDA, TDAP, UNISAME and other stakeholders.

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