Karachi: The Union of Small and Medium Enterprises (UNISAME) has called on Prime Minister Shehbaz Sharif to instruct the Small and Medium Enterprises Development Authority (SMEDA) to expand the definition of small and medium enterprises (SMEs) in light of the current exchange rate of the rupee against the US dollar, which has escalated to Rs278 per dollar from Rs58 a decade ago.

According to a statement by Union of Small and Medium Enterprises, President Zulfikar Thaver argued that the existing classification of micro to medium enterprises is obsolete. He recommended revising it to reflect the significant depreciation of the rupee, now valued at nearly Rs278 per dollar, to ensure the definitions are relevant.

Thaver further advocated for a consistent definition of micro to medium enterprises by the State Bank of Pakistan (SBP), SMEDA, and UNISAME, emphasizing its necessity for the promotion and development of the sector by these institutions.

He pointed out that the current criteria, based on turnover, assets, and employee numbers, require reevaluation. Thaver suggested that asset and employment size should not be considered. He noted that assets are often inherited by SMEs and the employment size is inconsequential for mechanized units or online businesses. Instead, turnover should be the primary factor, proposing that a micro or cottage industry be defined by a turnover of less than Rs40 million annually, a small unit by a turnover of up to Rs400 million, and a medium enterprise by a turnover of up to Rs2 billion.

The Union Council members also highlighted the importance of including SME farmers in these definitions, based on their produce, as they too engage in commercial income-generating activities.