Govt plans new steps to ensure sustainable, resilient SME sector: Bukhtyar

Tariq KhaliqueWeb Editor

25th Jun, 2021. 06:01 pm
Govt plans new steps to ensure sustainable, resilient SME sector: Bukhtyar

KARACHI: Despite several measures, the government firmly believes that much is required to be done to ensure sustainability and resilience of the SME sector, considering its valuable contribution in the economic development and its potential to take the economy towards an inclusive and sustainable growth, a government official said on Friday.

Addressing a webinar on the SME Development in Pakistan, hosted by the USAID Small and Medium Enterprise Activity (SMEA), Federal Minister for Industries and Production Bukhtyar said that this requires appropriate and long-term policy interventions and an implementation mechanism with the particular focus on the SME sector.

To ensure continuity of their operations and sustainability and for this in a well-coordinated and structured manner, the government opened up the businesses under strict Covid-19 SOPs during 2020, besides reducing the State Bank of Pakistan’s (SBP) 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, he added.

The Small and Medium Enterprises have played a vital role in the economic development of every country and these have also served as one of the major drivers of economic change, the minister said.

The 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, he added.

Bukhtyar said no country, whether developed or developing, has achieved sustainable and inclusive economic growth without a dynamic and thriving SME sector. In Pakistan, the story has been no different, as according to the estimates of Small and Medium Enterprise Development Authority (SMEDA), SMEs constitute nearly 90 per cent of all enterprises in the country, employing 80 per cent of the non-agricultural labour force and their share in the yearly GDP is around 40 per cent.

He termed the webinar a good opportunity to highlight the importance of the SME sector in the economic growth and social development of the country, which surely would highlight various cross-cutting issues and challenges that impede the growth of the SME sector and restrict its true potential.

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 the challenges being faced by the SME sector, he said.

Regarding specific interventions from the Ministry of Industries and Production, he said, the ministry has been actively collaborating with the SMEA project for the development and rollout of the much-awaited SME Policy.

The policy proposes SME-focused initiatives for augmenting access to finance, developing skilled and productive workforce, simplifying tax regime, increased participation in public procurement, setting up regulatory sandboxes, promotion of accelerators and incubators and providing incentives such as matching grants, especially to the IT start-ups for establishing online marketplaces.

These measures would largely take care of the market risks and failures arising out of the externalities and asymmetric information, he said, adding: “I am sure that 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.”

The minister also commended the efforts and support of USAID SMEA for…

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