DUBBED as the backbone of an economy, Small and Medium enterprises contribute towards employment generation, promotion of craftsmanship, equitable wealth distribution, resource mobilization and development of an entrepreneurial culture.
Recognizing the important role the SMEs play in delivering higher and more inclusive growth, many countries have rightly placed their development at the centre of growth and jobs strategies to meet the need of young populations.
It is lamentable that in Pakistan this important sector which could strengthen the industrial and manufacturing base was neglected for long.
At long last, the present government has come up with a policy which if implemented in real spirit can really change the industrial outlook of the country and can immensely enhance our exports to address the longstanding economic issues.
The policy unveiled by Minister for Industries and Production Khusro Bakhtiar at a news conference on Wednesday indeed is a comprehensive document as it envisages important measures to facilitate the businesses.
Requirements such as of NOCs for certain industries have been done away with whilst exemption in taxes has also been granted, especially to the women in order to encourage them to come forward and play their part in the industrial development.
Unlike large enterprises in the formal sector, a small and medium enterprise is constrained by financial and other resources.
The new policy has also addressed this issue as loans up to Rs 10 million will be offered to them without any collateral and that sufficient land has also been allocated to be provided to the new businesses on easy installments.
We have no doubt in saying that the policy has all the ingredients to encourage the existing businesses to expand their operations and scope or entice the new ones to start their businesses and contribute to the national economy.
However, transparency must be ensured and those desiring to start businesses should not face any difficulties vis-à-vis getting loans as well as land.
There is a need to further reduce the mark-up rate on SME loans.In addition, linkages of the SMEs need to be developed with the large scale industries and academics to enhance their potential.
