Levy of 9 percent mark-up resented

The Union of Small and Medium Enterprises (Unisame) expressed dissatisfaction over the budget 2004-05.
The association resented 9 percent mark-up rate on SMEs' credit and declared no substantial relief has been given to SMEs in the budget.
The SME Bank is not at all equipped to finance SMEs. In fact, the SME Bank is not a commercial bank; it is working as a development finance institution and hardly has enough branches.
Karachi has only one branch situated at Maulvi Tamizuddin Khan Road and cannot cater to so many SMEs' financial needs. Likewise in other cities, too, there are just a handful of branches.
The mark-up rate of 9 percent is still unaffordable. All other nationalised banks should have been directed to finance SMEs on affordable mark-up.
Convener of Unisame Zulfiqar Thaver said that the finance minister's budget is theoretical, but practically, the common man or the SME will not benefit. The slight reduction in electricity charges or import duties and sales tax exemption will not be of much help.
We were expecting substantial relief and the finance minister should review the demands and consider the aspects. He said the minister is bothered more about the fiscal discipline rather than difficulties faced by the common man, who is finding it impossible to survive.
On the other hand, chairman of Pakistan Silk and Rayon Mills Association Khalid Amin also expressed same views on SMEs credit at 9 percent mark-up and termed it as quite high.
He observed, while the big businessmen are easily getting credit at an average 5-6 percent, this high rate of 9 percent mark-up is not fair for SMEs, which should further be brought down to 5 percent.
He further termed the 10, 25 and 58 paisas reduction in electricity for domestic, commercial and industrialists consumers, respectively, as negligible, which might not provide any appreciable relief to them as the basic utility is already 30 percent costlier here compared to other countries.
He also criticised abolishment of sales tax on paints and varnishes and said, instead of it this exemption should be provided on steel and cement to lower the cost of construction in the city, and condemned the imposition of import duty on IT sector.
However, he welcomed the idea of establishment of textile city in various cities; exemption of duty on import of raw material, plant and machinery; application of a 15 percent uniform sales tax; and reduction in carry forward period to six months.