Shahab Khawaja the Chief Executive Officer (CEO) of The Small & Medium Enterprises Development Authority (SMEDA) invited us to discuss programmes for the coming year 2004.
He appreciated the good work done by UNISAME and requested us to acquaint the authority with the problems faced by the SMEs and suggest ways and means for their solution and also asked us to narrate the facilities required and improvement required in the existing facilities.
We lauded the services rendered by SMEDA and enquired the wisdom behind the restructuring of SMEDA.
When on the one hand the State Bank of Pakistan (SBP) by virtue of the Prudential Regulations (PR) has widened the sector and on the other hand the Government is downsizing the authority.
How will Smeda cope up with the extended sector. The sector is big and there is vast scope.
The CEO has been misquoted by a Commercial Newspaper regarding the definition of SME. Although they are abiding by the SBP definition and SMEDA is bound to follow same.
We requested Smeda to broaden its activities, establish branches all over the country and do publicity, as many SMEs don't yet know about the existence of Smeda.
We also requested Smeda to register SMEs all over Pakistan to have the correct figures and also to assess their requirements.
We requested Smeda to give more attention to the Engineering Sector and to encourage manufacture of machinery in Pakistan. Our engineers can make better machinery at half the cost of imported machinery.
We pointed out the drawbacks of the Market Committee System and also said that there are 46 different types of taxes paid by an SME and there are 32 agencies pestering the SMEs.
We expressed grievances about high handedness and corruption and narrated facts about various cases pending and complaints lodged. We requested improvement in the working of the administration.
We pointed out that there are various items which can be manufactured in Pakistan but are imported from abroad and are costly. PCSIR is in a position to offer guidance in this field and Smeda should seek their help.
We complained about electricity, water, gas, telephone services and delayed connection and unsatisfactory power distribution and loss caused to machinery.
We also complained about bad condition of roads leading to industrial, areas and the time involved in reaching the factory due to broken damaged roads.
Even containers coming to collect cargo are stuck and there are incidents of containers falling down and killing people.
It is very important that industrial zones are established with proper infrastructure having ready built sheds and all facilities of utility and prefabricated systems for quick construction.
We requested Smeda to obtain the 1200 acres land under PIDC and distribute the divided land to SMEs.
We explained the shortcomings of the finance system and requested Smeda to inform SBP that banks were not following the PR of SBP and still demanding collaterals from SMEs.
We said there is acute unemployment and this problem can be overcome with self employment.
We also stated that the mark up is unaffordable and it should not exceed 6% per annum. We lamented that the taxes were high, the Rs 80000 bracket is unfair and Sales Tax is ambiguous it should be simple and singular and not multiple.
The CEO promised to take up the issues and try his utmost to get relief from concerned quarters.
He requested UNISAME to work in close connection and assured full support for SME programmes of UNISAME.
He endorsed that an SME is one whose assets excluding land and building are upto Rs l00 millions in case of manufacturing concern employing up-to 250 persons and in case of trading concerns employing up-to 50 persons and havings assets of Rs 50 millions excluding land and building and in both cases having a turn over not over Rs 300 millions.
In view of the above we now request the CEO of SMEDA and the policy makers to do the needful on priority basis in the best interest of the SMEs.
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