In an earnest attempt to buoy entrepreneurship, the government’s new policy to pamper and patronage five million new businesses is commendable. The Small and Medium Enterprises (SME) sector is one of the most promising segments of national life, and to this day has largely remained either under-rated or camouflaged as an informal economy. The intention through the new policy is to abolish red-tapism, further the canvas of opportunities for starters and funnel it with cash cushions. This is being taken care of through a simplified registration process, keeping the tax regime lenient and coming up with incentives of provision of land on a preferred leasing module. It sounds too pragmatic to see the light of the day.
Pakistan has a youth bulge and around 60 per cent of its populace is below 18 years. This squarely corresponds to the phenomenon that fresh minds are more inclined for smart businesses, especially for being tech savvy. This is where SMEs come into play. More than one million business units in the manufacturing sector are direly in need of institutional support to stay afloat, and this policy can churn wonders if letter and spirit is retained. Pandemic and declining purchasing power has played havoc, and SMEs need to be pushed high for better returns. Thus, the policy to scale down inspections and let tax returns be on their own are good initiatives.
The point is that around 1.5 million new jobs are needed per annum. That can only be done in an environment of state patronage for the private sector. Slashing the tax slabs from 1.25 to 0.25 per cent for businesses having turnover of less than Rs100 million and 0.5 per cent for transactions up to Rs250 million is laudable. Likewise, 25 per cent rebate to women entrepreneurs; loans up to Rs10 million for 30,000 new businesses, and the guarantee to bear accidental loss with a seed money of Rs24 billion are startling features to get going. Last but not least, the concept of industrial parks and easy allotment of land for small units makes it comprehensive enough. With growth projected at 4 per cent, and currency gradually opting for a semblance of decency, the SMEs invigoration will be a leap in prosperity.
Published in The Express Tribune, December 17th, 2021.
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