ISLAMABAD: The government is to roll out the much-awaited small and medium enterprise (SME) policy to increase access to finance, develop skilled workforce, simplify tax regime, promote investment in tech startups, industries minister said on Friday.
Ministry of industries and production has been actively collaborating with SMEA Project for the development of the policy, minister Khusro Bukhtyar said during a webinar on SME Development in Pakistan, hosted by USAID Small and Medium Enterprise Activity (SMEA).
The policy further adopts a targeted approach by encouraging educational institutions to formulate rules and procedures for effective protection and commercialisation of innovations originating from the lab and research work with effective protection through the nationwide intellectual property regime.
“These measures would largely take care of market risks and failures arising out of externalities and asymmetric information. Once the policy fully rolls out, it would create synergies between the SME sector and institutions operating in the country to make the sector vibrant, performing and progressing,” Bukhtyar said. “Most of the policy reforms at the provincial and federal levels are underway with the help of USAID SMEA project and I am sure that by the time the project reaches towards its closure, its core objective would have surely been achieved.”
The minister said SMEs have played a vital role in economic development of every country and these have also served as one of the major drivers of economic change. SME sector contains immense potential to generate employment, alleviate poverty and integrate into global value chains and hence the sector has been able in creating prosperity, fostering development and achieving growth trajectory through positive spillovers on the other sections of the economy.
“No country, whether developed or developing, has achieved sustainable and inclusive economic growth without a dynamic and thriving SME sector,” he said. SMEs constitute nearly 90 percent of all enterprises in Pakistan, employ 80 percent of the non-agricultural labor force and their share in the yearly GDP is about 40 percent.
The government opened up the businesses besides reducing SBP's policy rate to a single digit, deferring payment of mark-up on loans and making it convenient for the SMEs to maintain their liquidity through various financing schemes. “Much is required to be done to ensure sustainability and resilience of the SME sector, considering its valuable contribution in the economic development of the country and its potential to take the economy towards an inclusive and sustainable growth,” he said.
“And this requires appropriate and long-term policy interventions with appropriate implementation mechanism with particular focus on the SME sector. The over-regulated business environment, complexities in technological and human resource development, weak linkages with local and global value chains, access to finance, difficulties in doing business and other issues may also be highlighted to develop a fair understanding of challenges faced by the SME sector and developing a way-forward for the sector and policy makers to take required measures.”