Government to aid around five million small businesses under new SME policy

SME policy

The government revealed the new Small and Medium Enterprises (SME) Policy 2021-25, with the aim to promote nearly five million businesses via simplification in registration, rationalization of taxes, approach to credit, and provision of land.

Generally, the program is intended at giving facilities and inducements to the SME sector, which adds around 40 percent to the GDP and accounts for 25percent of all exports.

Read more: SMEs likely to get Rs 60 billion collateral-free lending from eight banks

Minister for Industries and Production Khusro Bakhtiar, while introducing the policy on Wednesday, conveyed that it was for the first time in Pakistan an all-inclusive SME policy had been initiated, which had distributed these enterprises into three parts, comprising low risk, medium risk, and high risk.

Moreover, the government has decided to launch an SME fund worth Rs 30 billion, and streamline the Small and Medium Enterprise Development Authority to establish it as a new private-sector–driven entity.

“This policy addresses all the issues hindering SME sector’s development in the country, such as unnecessary inspection that only adds to the cost of doing business,” the minister informed while speaking to a news conference.

The federal cabinet has approved the new SME policy and it is projected to be told by the Ministry of Industries and Production in the coming days.

In the company of Information Minister Fawad Chaudhry, Mr. Bakhtiar added that prior to the consent of the SME policy by the cabinet, crucial initiatives on SMEs, including lowered tax regime, access to credit, and regulatory simplifications, had been initiated.

An additional facility under the policy is the eradicating of the government’s controlling intrusion, including the “Inspector-Less Inspection Regime”.

“To eliminate harassments and bribes by the inspectors, a self-declaration by SMEs on regulatory compliance and an e-inspection portal to monitor and self-verification of on-site inspections visits have been introduced,” Mr. Bakhtiar said, adding: “We need to look into the reduction of over-regulations of the industries, mainly the SMEs, and the matter is under discussion with the provinces.”

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