policies required to bring about required changes in sme sector pakistan

7/27/2019 policies required to bring about required changes in SME sector Pakistan

1/19

REQUIRED POLICY

REFORMS FOR

STRENGTHENING SMESECTOR

Group members:Abir Ahmed

Ammar Kamran

Aruba Ilyas

Hasan Ashraf

Saad Ullah

Talha Ali


2/19

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)


3/19

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


4/19

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).


5/19

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


6/19

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


7/19

Urban growth

Realize growth potential of centers and

promote them to urban growth points

Access to services should be provided which

ease growth


8/19

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


9/19

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.


10/19

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.


11/19

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.


12/19

Global Challenges

Government intervention

Removal of subsidies

Reduction in tariffs

Export duties


13/19

Measure that can be taken:

Use of Collective efficiency

External economies-market for labor, input,

services, technology.

International Alliances and Ventures


14/19

Technology and R & D

Science and technology affecting development

Infrastructure

Access to foreign technologies


15/19

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.


16/19

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


17/19

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


18/19

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.


19/19

Thank You!

policies required to bring about required changes in sme sector pakistan

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