KARACHI - The Union of Small and Medium Enterprises (UNISAME), in a pre-budget meeting of its forum, urged the federal finance minister Ishaq Dar to ensure facilities for the majority sector namely the micro, small and medium enterprises (MSME) and to ensure a balanced budget providing level playing field to all sectors of the economy. UNISAME has proposed practical scientific measures for the promotion and development of the sector.
President UNISAME Zulfikar Thaver reiterated the requirements of the MSME sector and invited the attention of the Ishaq Dar to the lack of access to finance. The commercial banks definitely need training in risk management and for this reason the aspect of collateral management needs to be carried out with emphasis. The MSMEs need finance to purchase raw material, install machinery for balancing modernization and replacement. They need bridge financing and post shipment financing and the access to finance which is lacking for want of collateral. This aspect needs to be addressed seriously. The budget must allocate funds for specialized subsidized financing under special schemes for the MSMES.
Whilst appreciating the reduction in discounting rates, he pointed out that the withholding tax on profit on deposits needs to be reduced to encourage savings and to make sure that the senior citizens income from savings is not insufficient for survival.
The other important requirement is land at concession and easy payment facilities to enable the entrepreneur to pay the cost of the land on easy installments in industrial estates and special economic zones.
Thaver said it is needless to say but the SME Chamber of Commerce, SME Institute, specific SME bank, SME export house and ombudsman promises in the SME policy remain unimplemented. He urged the finance minister to consider the importance and the necessity of these institutions for SME promotion and development.
The union also called upon the minister to strengthen the Small and Medium Enterprises Development Authority (SMEDA) and provide for increasing the scope of the authority in the budget. SMEDA needs to be strengthened with more personnel and must have wider outreach to cater to the primary, secondary and the tertiary sectors of the economy.
UNISAME appealed to the minister to lower the rate of taxes for enterprises and exempt the new industries for a period of 3 years. Import substitution and innovative industries must be provided additional relief for their innovative role.
The MSMES are bothered by corruption and have to pay illegal gratification and most of the departments are now calling it speed money. The anti-corruption department must be strengthened to cover the several organizations and the monitoring must be sharpened.
The law and order situation could be strengthened with the setting up of protection squads in industrial areas and for this UNISAME has proposed the setting up of the SME Liaison Committee (SME-LC) under the Federal Investigation Agency (FIA) or the Rangers as the police cannot cope up with the criminal activities of the activities of the miscreants which enjoy political patronage.
UNISAME has invited the attention of the federal finance minister to the vast potential of the sector and urged him not to undermine the sector which could turn the destiny of Pakistan if seriously promoted, supported, facilitated and encouraged.