SME Policy
Monday, August 20, 2007
The long awaited first-ever small and medium enterprises (SME) policy was finally launched by the government on 15th August, 2007. Speaking at a press conference, the Minister for Industries Production and Special Initiatives, Jahangir Khan Tareen, flanked by the Governor of State Bank and the Secretary for Industries, revealed its salient features, emphasising that the new policy aims to create globally competitive SMEs with a hassle-free business environment and to ensure provision of modern infrastructure and institutional support structure for access to resources and services. EDITORIAL (August 18 2007): The long awaited first-ever small and medium enterprises (SME) policy was finally launched by the government on 15th August, 2007. Speaking at a press conference, the Minister for Industries Production and Special Initiatives, Jahangir Khan Tareen, flanked by the Governor of State Bank and the Secretary for Industries, revealed its salient features, emphasising that the new policy aims to create globally competitive SMEs with a hassle-free business environment and to ensure provision of modern infrastructure and institutional support structure for access to resources and services.
The policy would be implemented in a period of eight years (2007-15) with an initial resource allocation of Rs 13.1 billion and it was expected to help develop SMEs through public-private partnership and create maximum job opportunities for poverty reduction, besides propelling country’s exports.
An amount of Rs 7.7 billion was earmarked for access to finances, followed by Rs 5 billion as access to other resources and services – human resource development, technology market and industry information.
The implementation initiatives include establishment of a credit guarantee agency for SMEs with a fund of Rs 3 billion, an SME subcontracting exchange at a cost of Rs 26 million, an SME development institute by spending Rs 116 million, an SME export house costing Rs 157 million, and creation of an SME promotion council with a fund of Rs 144 million.
In order to ensure proper implementation of the policy, a permanent mechanism of monitoring has also been envisaged in the form of national committee on SMEs, along with four provincial committees on SMEs. The government would take measures for promoting women entrepreneurship, cluster development and also focus on neglected and untapped sectors of the economy.
Credit information centres would also be established across the country along with a data development bank to facilitate the SME sector. Besides, a workshop in every city of the country would be organised to inform people about the importance of SME for their own benefit and the betterment of the country.
The State Bank Governor told the press conference that there was no limit on private sector credit as opposed to the target oriented credits to the SME sector in the 1970s.
A consultative committee, including the presidents of the banks, had now been constituted to facilitate the SME sector. Jahangir Tareen hoped that the new SME policy would decrease the density of regulations, thereby reducing the cost of doing business.
The main thrust of new SME policy, in our view, is in the right direction to a large extent, and reflects the increasing emphasis of the present government to develop the country through this route. There is absolutely no doubt that a robust and sustained development of SME sector could play a central role in utilising indigenous resources of the country for fostering economic development, creating more opportunities for absorbing the growing workforce and reducing poverty.
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