Major initiative launched to promote SME sector

With an indicative amount of Rs 13 billion and implementation plan has been chalked out to support various SME projects which would prove to be a major breakthrough in the development of SMEs in the country. Shahid Rashid, the newly appointed Chief Executive Officer of the Small and Medium Development Authority (Smeda) stated this in a statement issued here on Friday.
He said SMEs were the engine of growth of Pakistan's economy and a number of measures that have been announced in the current federal budget will widely translate into the benefits for the SME sector. These include reduction & elimination of duty on the priority sectors picked by Smeda for fast track development regarding gems & jewellery, furniture, marble and granite, horticulture and surgical equipment/medical devices and footwear industry, he said.
Besides, a number of other steps either to facilitate SMEs directly or to promote documentation and transparency in the sector and remove market distortions have been announced, he added. Referring to the reduction in the rate of taxation and tax slab applicable on retailers, he hoped that it would benefit small enterprises and encourage formalisation of businesses besides widening the tax net.
Reduction in duty on football bladders and glass bangles will benefit SMEs in the two clusters. Even indirect measures like tube-well subsidy of 25 percent payable on electricity charges and subsidy on fertiliser will benefit farmers and will thereby reduce cost of input for the agriculture-based industry, mostly SMEs, he added.
Shahid Rashid observed that efforts has also been made to reduce the regulatory burden on SMEs by simplification of documentary requirements such as CNIC to be used for identification purpose as an alternate where NTN is not obtained. In addition to this, the development programme in the federal budget 2007-08 contains projects worth around 1 billion, as CFCs to be established in different SME clusters to provide design, product development, training, prototype development facilities for SMEs, he added. He disagreed with the general perception about the federal budget that it was not supportive of SME sector.