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7/27/2019 policies required to bring about required changes in SME sector Pakistan
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REQUIRED POLICY
REFORMS FOR
STRENGTHENING SMESECTOR
Group members:Abir Ahmed
Ammar Kamran
Aruba Ilyas
Hasan Ashraf
Saad Ullah
Talha Ali
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Programs launched to
support the SMEs
Supporting institutions and industrial estates
Export processing zones
Technology upgrade fund
Non-governmental support. Such as
National Rural Support Program
Punjab Rural Support Program (PRSP)
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SMEs and Economic
efficiency
Small firms are generally inefficient and have to be
made efficient through proper policy support and
guidance.
Small-large links can help SMEs to gain economic
efficiency. For example a small firm can produce raw
materials for a large firm and vice versa.
Small large links are not developed automatically but
have to be developed by the government.
Training programmers, import licensing for import of
technology and raw materials and concessional
monetary and fiscal policy favored large industry directly
and small industry indirectly
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SMEDA
An important national institution which focused on fewsectors with significant growth potential for examplefurniture, gems and jewelry and sports goods.
It is committed to the provision of 6 critical services
needed by SMEs, namely business regulations;
fiscal concessions;
trade rules,
labor laws incentives
support, (i.e. HRD, technology and
marketing).
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Promoting Entrepreneurship
Training in Industrial management for ensuring
efficient handling of enterprises
Helping small firms be prepared for meeting
quality standards
Promotion of production channels between
small and large firms to maximize the technical
gains to the earlier
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Modernization
Modernizations should be undertaken without
affecting the Employment
Focus should be on developing new products
rather than duplicating old ones
Industry should be located outside city so that
entire labour force is involved
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Urban growth
Realize growth potential of centers and
promote them to urban growth points
Access to services should be provided which
ease growth
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Access to Institutional
Finance
Large firms take up a large chunk of the
finance available leaving SMEs in the dark
Policies ensuring proper development of
available finance to SMEs should beundertaken
Banks should promote credit giving to SMEs
with low interest rate and little collateral
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Supply of Material
Scarce raw materials and imported raw materialsare regulated in Pakistan.
Many of such items are very essential for smallbusinesses , hence they are sold and purchasedin black market.
Government should make a body that alters such
regulations for SMEs . Introduce initiatives like removal of tariff and non
tariff barriers.
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Labor Laws
Labor laws in Pakistan include: social security ,old age benefits and minimum wage.
SMEs due to their small level of production are
not able to comprehend with these. The government should ensure lesser and simpler
regulations which can be easily implemented andmonitored
Introduce an inspection policy. Ensuring less interference, labor rights protected
and growth of SMEs.
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Tax Laws
Tax laws and legal requirements discourage
SMEs to grow.
Government should introduce One window
facilities to spur production activity .
Government should provide micro finance for
purchase of machinery etc
Give exemptions on property tax , stamp dutyetc as it was done in Japan and Korea.
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Global Challenges
Government intervention
Removal of subsidies
Reduction in tariffs
Export duties
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Measure that can be taken:
Use of Collective efficiency
External economies-market for labor, input,
services, technology.
International Alliances and Ventures
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Technology and R & D
Science and technology affecting development
Infrastructure
Access to foreign technologies
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Technology and R & D
Technology can help solve many challenges.
Assimilation and Production of technology
Limitation removed:
Acquisition of appropriate technologies
Training of optional use of technologies
Dissemination of technology
Up gradation of skills to match bettertechnology
Establishment of basic technical laboratories for
the support of SME industries.
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Gender and SMEs
Women-owned SMEs are: highly volatile,
household based, low-return urban activities
Activities are concentrated in sub-sectors
Women tend to have dual responsibilities
Women are more risk-averse
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Intellectual Property Rights
Absence OF IPRs discourages foreign and
domestic investments in new areas.
Revising IPR laws would bring in conformity
with international standards and giveprotection to domestic and foreign producers
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Analysis
Lack of attention to develop:
Energy (Renewable energy: Solar and Wind)
IT
Educational reforms required;
Attractive tax reforms;
Attract foreigners to start SMEs in Pakistan;
Change in attitude towards entrepreneurship.
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Thank You!