In an earnest endeavour to expand growth, the Small and Medium Enterprises (SMEs) policy is a step in the right direction. The government by facilitating new entrepreneurs, with financing and land-leasing, wants to create a module of new business-laden initiatives. It will help achieve the twin purpose of curbing unemployment and empowering the youth to think out of the box. PM Imran Khan, while unveiling the blueprint of upcoming moderate businesses, said the multitalented youth possesses all the necessary skills and vision to make it big, on similar ventures undertaken in Silicon valleys elsewhere. As Pakistan struggles with a Rs1.8 trillion gap in income and expenditure, the kick-starting of SMEs can go a long way in harnessing a decorum of the formal economy, as well as buoying taxation.
The PM rightly laid stress on abolishing red-tapism and facilitating any of the new initiatives on the premise of its merit. This is only possible if credit-line is available to new entrepreneurs. The balance-sheet of loaning, however, shows some dismal statistics, as there were fewer than 200,000 borrowers till 2020. While SMEs contribute more than 40% to the GDP, they are in need of being refurbished with new cash injections and an export-driven production policy. Apparently, this is what the new policy hints at, as enough emphasis was made on encouraging the private sector to tap on capital investments.
Until and unless there is a wealth generation module, nothing will change for good as we are very often trapped in a plummeting currency and a soaring graph of undesired imports. Presently, SMEs in Pakistan account for a fourth of total exports. It is the SME-based new production ventures that can outclass imports and find new markets at home and abroad.
The most euphoric aspect of SMEs launch was availability of $500 million seed money from foreign funding. This testifies to the health of the SMEs sector and the confidence in it. Adequate inbuilt safeguards and a hassle-free regulation can easily push around 5.5 million SMEs to new heights. It will help address the youth bulge’s craving for new businesses, and redefine populism in the economy
Source: Published in Express Tribune