Small & Medium Enterprises (SMEs) are backbone of the economy and almost 40 percent revenue is generated by them in the country. But no importance is given to SMEs by the Govt. She must support and provide easy financial help by giving interest-free loans without security. Iftikhar Ghani Vohra Convener of FPCCI Central Standing Committee on Small & Medium Enterprises said this in first meeting of the Committee.
The FPCCI Central Standing Committee on Small & Medium Enterprises urged the government to revamp tax system for small and medium enterprises (SMEs) along with adoption of other business-friendly policies. Tax policy must be friendly, which means it has to be fair, simple, enabling, facilitating and not threatening. The meeting was convened by Iftikhar Ghani Vohra and chaired by Vice President FPCCI Muhammad Hanif Lakhany.
Vohra in his welcome address stated that Category-wise the small units whose turnover are less than 5 Crore may not be in sales tax net, they pay 2 persons but most of them were already registered in sale tax. The committee is off the view that minimum loan facility to less than 5 Crore turnover should be 15/20 lac rupees while the sale tax registered SMEs should be given 25/50 lac without security.
Vice President FPCCI Muhammad Hanif Lakhany said that majority of rural areas people were poor and poverty-stricken. They do not have a large amount of money to invest in the setting of large-scale industries requiring huge capital investment. In contrast, the setting of the cottage and small-scale industries best suits our traditional economic setup as they do not require a high investment of capital and the use of sophisticated machinery or technology.
Other participants of the event highlighted that Cottage industries play important role in meeting basic necessities of life, especially in both rural and urban areas. Goods manufactured at the cottage and small scale level are also in high demand in the international market which can help earn much needed foreign exchange. In Pakistan, cottage and small-scale industries are the largest sources of industrial employment. Their contribution to the total industrial workforce is 80%. These industries also help create opportunities for self-employment for many people thus reducing the unemployment rate in the country.
Syed Tariq Rashid, from North Karachi Association of Trade & Industry said that Cottage and Small Scale industries help meet different needs of people in the locality and country. Local produced goods are also cost-effective compared to same items bought from another region or imported from abroad. Thus, cottage and small-scale industries help decrease the import burden and save much-needed foreign exchange.
Since the baby baba Garments is one of the leading Industry in Asia, and it actually falls under the Cottage Industry, so it should be given concession on the duty for import of accessories. A ban should be imposed on the import of finished goods. And RD may be imposed on the finished goods import.
Tariq Rashid suggested that allocation of funds regarding Cottage Industries should be under the umbrella of Federation of Chamber of Commerce & Industry. Loans should be on interest free basis to facilitate the SME’s. A land yard should be provided for the SMEs along with loan at a very low rate and exemption of Tax for SME’s for five (5) years.