Inclusion of SME development in Vision 2015 urgedSeptember 5, 2014
KARACHI: The Union of Small and Medium Enterprises (UNISAME) has urged the government to include the SME development in Vision 2025 without fail as the vision would remain incomplete without the inclusion and sharpening of essential SME promotion and development tools.
President UNISAME Zulfikar Thaver said that SME promotion and development is no charity it is the responsibility of the state and advised the government to facilitate, encourage, support and motivate the primary sector which is very big from grass roots level and facilitate the SMEs to modernize their farms, agricultural produce processing, manufacturing units and services. The best value addition could be done by SMEs provided they are facilitated.
He outlined the need for providing finance to SMEs at affordable mark up and with repayment facilities on pay as you earn schemes under leasing system and include commercial property leasing as an important tool in uplift of the sector.
Secondly he stressed the need for SME credit guarantee insurance without which the banks will not finance the sector as various schemes of the State Bank of Pakistan (SBP) have not achieved the desired results as banks are not prepared to take risk.
There is urgent need for incentives and it is very essential that industrial estates are established with in house facilities f alternate energy generation and the land is allotted to the SMEs at concession and on instalments.
Regarding training he pointed out that there are institutions for managerial training but training for operators, supervisors is lacking. Training at all levels is required.
The taxation system needs to be revised; it should be based on lower taxes and higher collection and tax benefits for new entrants, innovative industries, import substitution industries and export industries based on indigenous raw material.
The government must recommend duty free imports of energy generation devises, raw and packing material and income generation vehicles, farm equipments, tractors, harvesters and other modern farm machinery.
The prime minister’s youth loan scheme is appreciated but its scope enhanced to include every deserving youth having sound business plan on merit and not left to balloting.
The government needs to examine the report of the International Finance Corporation (IFC) of World Bank regarding desired changes in SMEDA for making it a very effective body for SME promotion and development.
The establishment of SME chamber of commerce, technological institute, export house, ombudsman for SME grievances, SME specific fund or bank, setting up of dehydration units and cold storage units near farms and logistic systems including collateral management need inclusion in the Vision 2025.
The SMEs definitely need conducive environment, educative information, technology, finance, incentives and marketing support for growth and the government is duty bound to cater to their requirements being the majority sector and the backbone of the economy. It is also the back forte of the large sector.
UNISAME said it is unfortunate that SMEDA is left to die its own death as most of the officers have left the authority and most of the projects are shelved due to lack of funds. The new board has been reconstituted without the representative from Sindh in gross violation of the SMEDA Ordinance 2002. It is very important that SMEDA which was conceived by Prime Minister Mian Mohammad Nawaz Sharif is not being recognized and strengthened as the key organization for SME promotion and development.
SMEDA needs to be placed under the cabinet division and the PM must take it under his direct control as is the case in many countries of the world. Even in USA the Small Business Corporation is directly under the president of USA. In most of the countries of the world the sector has its own ministry as it is the majority sector.
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