Pledging economic uplift, Prime Minister Imran Khan launched the National Small and Medium Enterprises (SME) Policy of 2021. Indeed, SMEs are the backbone of the economy as there are a total of 5.2 million SMEs in Pakistan, representing over 99% of the total business in Pakistan. They employ over 78% of the non-agriculture labor force and contribute 40% to GDP and 25% to exports.
An SME-led economic growth is inclusive, sustainable and addresses the structural issues in Pakistan’s economy by widening production and exports base and increasing the pace of new enterprise creation.
For the first time in Pakistan, an all-inclusive SME policy is being launched by the government that addresses all issues that hinder SME sector development together with a robust implementation mechanism. Even before approval of the SME policy by the cabinet, key initiatives on SMEs, i.e., access to credit, lowered tax regime, and regulatory simplifications, had been approved. The policy has introduced an inspector-less inspection regime. No NOC for startups and expansion for low-risk businesses will be required. Time-bound approval/NOC issuance for medium/high-risk SMEs will be issued in under 30 days. An e-inspection portal to monitor and self-verification of onsite inspection visits will be launched as well. Regulations are being revised to allow greater SME participation in the public sector procurement of goods and services. TDAP will provide increased SME participation in international trade fairs and exhibitions. Under this policy, Women entrepreneurs will be supported as a special focus area including support for greater access to finance, awareness, training, and advisory services to meet tax and regulatory compliance requirements. An SME Registration Portal has been launched that will provide one-point access to all SME incentives and an SME Fund will be established with a total contribution of Rs. 30 billion, over a period of time for public sector investment in the SME sector.