The government is in the final stage to issue the country's first SME policy with some key provisions including establishment of an incubation centre to develop entrepreneurs, officials said.
It also includes arranging collateral free loans at single-digit interest rates for the entrepreneurs.
The policy emphasises expansion of skill development education and training programmes for small and medium enterprises (SMEs) as many could not sustain for lack of such trainings and education programmes.
Considering the tax hurdles, the policy also recommends simplification and rationalisation of SME tax policy, investment and revenue incentives for export-oriented SME sector.
"We have finalised the SME Policy 2019. We will soon issue the gazette notification of the policy," a high official of the Ministry of Industries (MoI) involved with the process of drafting SME policy told the FE on Monday.
He said the first and new SME policy mainly concentrates on six factors that are access to finance, access to technology and innovation, access to market, access to training, access to business support services and access to information.
The industries ministry official further said that the strategic tools of the new SME policy includes launching of SME Credit Guarantee Fund and ensuring quality of SME products.
Besides, it also suggests introduction of national SME Entrepreneur Award, making start-up process easier through the introduction of online or digital system and maintaining effective collaboration between the trade bodies and the government for development of the SME sector.
The new policy also has a target to increase the contribution of the SME sector to the gross domestic product to 32 per cent from 25 per cent.
The new policy also suggests forming National SME Development Council (NSDC) and National SME Task Force.
The NSDC will be the highest policy-making body to implement the government's commitment to the development of SME sector.
There will be working and technical committees to review specific proposals or recommendations for SMEs.
The SMEs are making significant contribution to achieve economic growth.
Micro, small and medium enterprises (MSME) comprise about 7.8 million and they contribute about 25 per cent to the country's gross domestic product.
Earlier, the government framed SME Strategy Framework in 2005 for the development of the sector.
The government announced SME sector as the main pillar of industrial development in National Industrial Policy 2016.
The National Industrial Policy 2016 suggests preparation of a specific and time-bound development plan for proper implementation of SME Policy 2019.
The government has set July 2019 to June 2024 as the implementation period of the SME Policy 2019.
The implementation period of the SME strategies have been categorised short- term (to be implemented in one year), medium-term (enforceable in two to three years) and long-term (four to five years).
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