The SITE Association of Industry (SAI), in collaboration with the International Labour Organisation (ILO) and the Small and Medium Enterprises Development Authority (Smeda), recently organised a consultative session aimed at addressing the challenges faced by textile and automobile sectors.
The session focused on identifying the key obstacles faced by enterprises and prioritising incentives to support the formalisation of SMEs and their supply chains. It offered members a chance to provide feedback on the already identified issues, share practical recommendations and incentives for the SMEs and assist in shaping a national road map for the formalisation those enterprises.
ILO National Project Coordinator M Naeem Ansari, Smeda Deputy General Manager Mukesh Kumar and Project Consultant SME Formalisation Muhammad Awais were present in the session.
SAI Senior Vice President Khalid Riaz said that many of the association's member enterprises had, for several years, contributed to the Sindh Employees Social Security Institution (SESSI) and the Employees Old-Age Benefits Institution (EOBI), in line with their legal obligations. "Enterprises themselves see no return or recognition of their consistent financial input for these national institutions," he said.
"We propose that contributions to SESSI and EOBI should be rationalised with a defined ceiling or cap, especially for SMEs operating on thin profit margins. Our association has always played a facilitative role in compliance matters, but reforms must go hand in hand with facilitation," he added.
Khalid Riaz emphasised that formalisation could not succeed through regulation alone; it must be value-driven. This includes not just simplifying registration and inspection systems but also ensuring that employers who contribute to national institutions like SESSI and EOBI receive visible, timely services in return.
The participants were informed that the ILO, in coordination with Smeda, was undertaking the development of a national road map for the formalisation of SMEs. This strategic initiative aims to facilitate the transition of SMEs from the informal to the formal economy through evidence-based approaches and inclusive stakeholder engagement.
Textile and automotive sectors, particularly their export-oriented value chains, are the key focus areas of this road map. As part of this initiative, a comprehensive baseline study has been conducted to assess the current landscape of informality and analyse value chain dynamics within these sectors. Muhammad Awais, who led this study, presented its key findings during the session.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ