Small Enterprise Economic and Social Development Policy Paper: Recommendation for Punjab Government

There is abundant research work in progress on the subject of small enterprises, recognizing it as the backbone of the economy. This sector caters to the largest chunk of employment. But beyond that the small sector contributes to national economy, it prevents concentration of wealth in few hands, harnesses underutilized resources, smooth transition to higher technology, integrates working of large with the small business, (sub contracting), and contributes to major goals such as Balance of Payment stability. But this sector needs an infrastructure of support services. There are some excellent examples of benchmarks of policy initiatives by countries around the world. The purpose of this paper is to review some policies of small enterprises and to use this for designing an indigenous policy. Since Punjab is the hub of small enterprises and is leading through some successful examples of PSIC and PVTC and emergence of cities based on small industries, it was decided by the author to prepare a Punjab specific small enterprises & entrepreneurship development policy. Much of development has taken place without a law or policy directed at small enterprises. Small enterprises are put at 'a fundamental social and economic disadvantage' because of this it has been observed that policy would be fundamental requirement for growth & development of this sector, therefore, an all round view has been taken while preparing this recommendation for the Punjab Government. This paper through its research has recommended the need to bifurcate the PSIC into a Punjab Small Enterprise Development Bank and a Small Business Development Service Provider. It has also emphasized the need for a paradigm shift in education policy toward entrepreneurship education. It has recommended financial policy reforms towards the small enterprise sector lending (Training Prior to Lending). It has also emphasized the need to define small enterprises and to separate the small from the medium enterprise. And finally it has recommended the establishment of the Small Enterprise Hub.