Dec 15, 2021: Federal Minister for Industries and Production, Makhdoom Khusro Bakhtiar unveiled the Small and Medium Enterprises (SME) policy today, with a special focus on promoting around 5 million businesses through facilitation in registration, streamlining of taxes, access to credit and provision of land, APP reported.

The minister announced the policy during a press conference. He was flanked by Federal Minister for Information and Broadcasting, Fawad Ahmed Chaudhry.

Bakhtiar said that this was for the first time that the policy comes with a proper implementation mechanism.

He said, the policy was made in 2007 but only in papers and asserted that this time it was being introduced with an implementation mechanism under the supervision of the National Coordination Committee with proper deadlines of tasks.

The minister said that there were around five million SME businesses in the country including one million in the manufacturing sector in the shape of different enterprises.

The minister said that the SME sector was playing a crucial role in promoting inclusive economic growth in addition to providing 78 percent of employment (if agriculture is excluded) and promoting exports.

Elaborating various initiatives of the policy, the minister said that the policy was not only directional but many of its initiatives have already been implemented.

He said that the policy has relieved the businessmen of regulatory burden by either excluding the condition of obtaining a No Objection Certificate (NOC) or have minimized its requirements.

He said anyone interested in starting a new business will not have to go from pillar to post for obtaining the NOC or involving any inspector.

He said the ‘Zero time to start up’ initiative has been introduced under which the sector has been divided into three categories including low, medium and high-risk SMEs.

The minister said that the NOC condition for the low-risk businesses including the services sector, wholesale transport has been abolished whereas the medium risk businesses such as light engineering, leather, auto parts, sports goods and cutlery can get their approval within 30 days after applying for the same.

However, he added, SMEs working in explosives, fires, boiler and chemicals have been put on the high-risk category.

He said, that the policy also introduced a self-declaration scheme under which the businessmen would follow the relevant laws voluntarily.

He added that only 2 percent of the self-declaration would be inspected physically adding that the government had developed a web portal, through which the businesses that are going to be inspected would be given the date of inspection. This would reduce human intervention and promote transparency and check corruption.

The minister said that another initiative taken under the scheme included streamlining of taxes for SMEs. Under the policy, turnover tax of 1.25 percent has been reduced to 0.25 percent for the business having turn over less than Rs100 million and 0.5 percent for those having turn over from Rs100 million to Rs250 million

However, if anyone is not interested in turnover tax and want to claim withholding tax then he/she would have to opt for income tax mode, which would be 7.5 percent for business with turnover less than Rs1 million and 15 percent for those having turned over from over Rs100 million to Rs250 million. The minister said the women enterprises have been given a 25 percent rebate in tax. He said that these initiatives have already been taken by the government.

In addition to giving people access to finances, the minister said the government had launched SME Asaan Scheme under which the federal government and commercial banks would give guarantee-free loans up to Rs10 million to 30,000 new businesses.

He said, in case the businesses fail, 40 to 60 percent loss would be borne by government and commercial banks. He said the government had already earmarked Rs23.5 billion for the purpose. He said there were several other schemes the government would introduce to promote the SME sector.

On provision of land, he said, the federal government in collaboration with Punjab and Baluchistan and Khyber Pakhtunkhawa governments has earmarked 4200 acres of land, which would be transformed into 19500 plots to provide the businessman on easy loans.

He requested the Sindh government to do the same, however added that the federal government would provide such plots in Karachi from its industrial parks.

He said that SMEs would also have share in public procurement, adding a plan was being prepared to fix quotas for SMEs

He said the government had also earmarked Rs30 billion for the SMEDA fund that would be utilized for the development of SME zones in the Wazirabad, Gujranwala and Gujarat triangle.

He said that SMEDA was also being transformed to make it a private-sector driven body.

Meanwhile, speaking on the occasion, Fawad Chaudhry highlighted the importance of developing a strong industrial foundation to promote growth and cater to the needs of the 220 million population.

He said unless the industrial sector of the country was promoted, it would be hard to come out of economic problems.

APP

29588