KARACHI, June 11: The federal budget 2007-08 has ignored small and medium enterprises (SMEs), thereby giving an impression that the government has shifted its priority and is no more interested in their development.

The budgetary proposals did not mention a word about the SME sector which is the largest and most important sector of economy and also provides employment to all sorts of workforce.

The sector is generally run on self-financing basis and doesn’t depend on banking sector for finances.

The government five years back had spelt out SMEs amongst its priorities, but the new budget fails to carry out any incentives.

Zafar Iqbal, President, Small and Medium Enterprises Alliance (SMEA), was critical of the budget and that in today’s perspective the most burning issue is energy, but unfortunately policy- makers have totally ignored this sector.

He further pointed out that by introducing austerity measures and educating consumers with regard to dwindling water resources and conservation of energy, the country could have overcome some of its problem, but again the budget makers did not suggest any measures.

Union of Small and Medium Enterprises (Unisame) Zulfikar Thaver said the budget has totally disappointed SME sector which is fronted with a number of issues.

He said till this day banks did not introduce SME-specific product and it was more disappointing to learn that even SME bank has, so far, failed to do so.

Mr Thaver said budgetary proposals have even mentioned about bringing improvement in water and sewage systems and road network, but did not mention energy generation to meet the acute shortfall faced by the nation as a whole.

The Unisame chief said high cost of production and long hours of power outages are crippling SMEs all over the country and if the government did not come up with remedial measures, it would make millions of self-employed people jobless.

How could a person run an industrial or business establishment if he or she has to face power outage for long hours.

Export contracts could not be met and industry has to face delayed shipments and at the same time confront cancellation of L/Cs.

The taxation measures also did not give any relief to the SME sector.

On the contrary, exemption from sales tax for businesses having turnover up to five million has been extended to other slabs as well, he criticised.