ISLAMABAD: Small and Medium Enterprises (SME) sector should be supported through relaxation in taxes and financial assistance, said Mahfooz Elahi, President of Islamabad Chamber of Commerce and Industry (ICCI), addressing a business community here on Saturday.
Elahi said that the SME development was pivotal to economic growth and had great significance in the development of economy.
He stated that SMEs are considered the engine of economic growth in both developed and developing countries. The country’s SMEs are still unable to achieve their maximum potential and are in dire need of `hand-holding’ and business support services.
He said that in the industrial development of a country, the importance of the SME sector cannot be neglected. SMEs constitute nearly 90 per cent of all the enterprises in Pakistan, employ 80 per cent of the non-agricultural labor force and their share in the annual GDP is 40 per cent, approximately.
However, unlike large enterprises in the formal sector, a small and medium enterprise is constrained by financial and other resources.
Mahfooz Elahi said that the current SME policy of Pakistan does not take into explicit account the heterogeneity of the sector and, thus, consists of broad recommendations for the entire SME sector. The empirical evidence special needs of micro, small and medium firms in view for ensuring higher growth of firms of different sizes.
He said that Pakistan’s SMEs need to focus development of new products, import replacements, exports goods and goods with growing demand.
It would be appropriate to put the scarce national resources, in particular, capital to use for the production of new products rather than duplicate lines of production that are being carried on, even with inefficiencies.
Traditional products require adaptation and modifications in design and quality to meet the current demand trends.
