Small and Medium enterprises under the threat of survival

PAKISTAN: The small and medium scale manufacturing Industries are struggling for survival, the main cause is due to the high rate of Inflation, frequent failure of power supply, inadequate infrastructure, and political instability, disturbance of law and order situation and an inappropriate economic policy. Now, the only option small and medium scale enterprises have is to wind-up their business activities.

Small and medium scale enterprises are contracting job opportunities to curtail their manufacturing capacities. If we try to understand the problems in a broad spectrum particularly the production or supply side approaches. We find the major cause to be cost push Inflation, because the cost of production is increasing every day deliberately. Resultantly the economy is confronting stagflation by-which demand of industrial goods is decreasing rapidly.

In this unfavourable business environment, two major Industries regarding light-engineering and garments are victims of small and medium scale Industries facing severe problems especially financial and inefficient technological skills, and idle labourers. However, the pain is also being felt strong in the leather industry, sanitary, surgical instruments and electrical fan manufacturing. But the dimension of pain is different with accordance to their needs.

In Punjab several leading Auto vendors claim around 15 to 30 percent jobs have been lost due to sharp reduction of demand in Auto parts manufacturing Industry. BY this reason several units are going to close down immediately.

The small and medium scale enterprises play a major role to absorb the labour than large scale Industries. All around the world, small and medium scale enterprises are considered the core employers of the economy. Unfortunately, in Pakistan small and medium scale enterprises are not considered as a value-able sector to boost large scale Industries.

Failure and success are part of the business not unique. But in Pakistan the matter is quite different due to lack of importance and consciousness by the government. Government from the very first day has avoided accumulating resources to extend autonomous investment for the development of both scale Industries at every level.