Karachi, March 11, 2018 (PPI-OT): The Union of Small and Medium Enterprises (UNISAME) in its budget proposals has urged the finance adviser to the prime minister Miftah Ismail to ensure a much needed friendly budget for the micro to medium sized (MSME) sector. President UNISAME Zulfikar Thaver said first of all the tax exemption limit of Rs 400000 needs to be raised to Rs 600000 in view of the high cost of living due to inflation. It is unfair to expect a person earning below Rs 50000 a month to be burdened with additional taxes as even persons having very low income are paying taxes on cell phones, petrol and purchases of daily use.
Secondly it is very necessary that just like the Prime minister’s Youth Loan (PMYL) another scheme is made for the MSME. Indeed the PMYL has been very supportive to the youth but those MSMEs above the age of 45 years also need financial support. Thirdly the finance ministry needs to facilitate the MSMEs to own shops, workshops, factories under commercial property leasing to enable them repay on instalments.
Fourthly the alternate energy devices and systems need to be subsidized. Fifthly the import duty on raw material and packing material needs to be reduced substantially to make the units competitive. The other proposals are for cost of doing business and ease of doing business and this can be achieved by reducing utility charges and also having one window operation. The finance ministry needs to finance the setting up of export promotion bureau for SMEs, Also either open a specific SME bank or make the existing SME Bank efficient, competent and a true SME Bank for financing SMEs.
The size and scope of the Small and Medium Enterprises Development Authority (SMEDA) must be increased to enable t to outreach the sector. SMEDA must have a centre of excellence (CoE) and an institute for training as well. SMEDA needs to have an employment exchange also. Sufficient funds must be provided to SMEDA to register all SMEs area wise and industry wise.
Thaver said that agriculture is the backbone and the farmers are paying heavily for seeds, pesticides, fumigation, farm equipment and are at the mercy of the middlemen who fleece them and take heavy mark-up. UNISAME has invited the attention of the ministry to this victimization and is reiterating the need for a system to remove the SME farmers from the clutches of the middlemen. This can be achieved by further increasing the limit of the micro finance banks to enable them to finance farmers.
Needless to state that SME industrial estates are required in the outskirts of the cities and the builders must be facilitated to build industrial estates. The housing industry needs the whole hearted support of the government as it covers 40 different industries and deserves the best attention of the government.
Since e-Commerce is the need of the hour and to promote online business the ministry of finance must facilitate the opening of merchant accounts on nominal charges for the benefit of the home based entrepreneurs. UNISAME reiterated the need for promoting the idea of self employment and urged the ministry of finance to set up a television channel for propagating occupations for the jobless and offering small business ideas.
UNISAME experts have pointed out that SME promotion is no charity as it is the duty of the state to promote, encourage, facilitate and support the majority sector which remains under privileged. It is incumbent upon the ministry of finance to give priority to the sector and make the banks comfortable in financing the sector through modern concepts of banking, leasing, insurance and logistics.
UNISAME appreciated the role of the State Bank of Pakistan (SBP) in reducing mark up and launching the SME finance policy and urged the ministry of finance to enable the SBP to implement it in letter and spirit by supporting it with an SME friendly budget and providing the necessary funds required for implementing the plans.
For more information, contact:
Union of Small and Medium Enterprises (UNISAME)
75/1 3rd Commercial Street,
Phase IV, D.H.A., Karachi, Pakistan
Cell: +92-300-8245307, +92-321-8245307