ISLAMABAD: may 20(DNA)–The Federal Government is working to finalize SME policy to improve the regulatory environment for small businesses including services sector in Pakistan. Small and Medium Enterprises Development Authority (SMEDA), in this regard, has sought an e-commerce policy as it’s essential to develop online market place. Helping SMEs to use IT tools for increasing their productivity and supporting women-led enterprises in the services sector, are some of the key features of the proposed policy.

Shehryar Tahir, Head of External Relations at SMEDA, shared this with the audience at online policy dialogue ‘improving regulatory environment for businesses in the services sector – budget proposals from services sector businesses’ organized by the Sustainable Development Policy Institute (SDPI) here on Thursday.

Earlier, Dr Vaqar Ahmed, Joint Executive Director, SDPI, informed the participants that the services sector has contracted by 0.59% during fiscal year 2019-20. Several sub-sectors including wholesale and retail trade; transport, storage, and communication have faced negative growth rate due to sluggish demand and post-Covid19 outlook. The fall in the national per capita income of over 6% in dollar terms during FY20 also implies reduced purchasing power of consumers of services, he added.

He added further that post-Covid19 recovery in the services sector is also expected to be slow given reduced levels of investment. The State Bank of Pakistan thus, needs to evaluate that despite credit facilitation. Besides, strengthening of competition regime and market reforms could play a key role here. . He said that measures should be announced in the Budget for the next financial year to help services sector. SDPI’s recent research, he said, indicates the need for tax harmonization, streamlining foreign exchange rules, and expediting implementation of e-commerce policy as three major demands from the services sector.

Mr Adeel Azhar, from TCS Group, was of view that Covid19 offers some opportunities as well for the services sector as online businesses would have an increased demand. However, he said, it’s  a matter of concern that despite being a large population, regular foreign investment flows are not seen in e-commerce sector in the country,

Economic Analyst, Mr Saad Rajput, on the occasion suggested that Pakistan now needs to move beyond online transfers and mobile wallets. Financial inclusion policy can help in brining innovation in online products in the insurance sector such as health service delivery.

Dr. Sajid Amin, Head of Policy Solutions Lab at SDPI, urged the policymakers to focus on promoting innovation across micro, small and medium enterprises (MSMEs) in the forthcoming federal budget. Furthermore, government policy can help to bring down capacity building costs of SMEs, he added.

The other speakers including Ms Ayesha Qaisarani and Mr Ahad Nazir, highlighted the diverse aspects of SME’s women should be helped streamlining online businesses. The federal and provincial tax and regulatory bodies need to have a better understanding of business models in services sectors aligned with the new challenges. The speakers highlighted that better business reform are imperative reduce cost of doing business in post-Covid19 scenario. Besides, tax regime should be working to provide an enabling environment for the SMEs including in the services sector.