Leading Issues in the Economy of Pakistan: Agenda for Reforms Table 17.4: Stock of Government Budgetary Borrowing and Private Sector Credit by the Banking System (Rs in Billion) 2012-13 2015-16 2020-21 D 2021-22 D Government Budgetary Borrowing 3120 5705 9973 4268 (57.0) 13293 3320 (67.3) Credit to Private Sector 3779 4449 7629 3180 (42.7) 9241 1612 (32.7) Ratio 0.825 1.282 1.307 7448 (100.0) 1.438 4932 The recommendations are as follows: i) Given the full autonomy of the SBP after the recent big amendments to the SBP Act, there is need at the start of the year for agreement with the Government on the ceiling to Government borrowing from the banking system and the quantum of SBP OMOs to support this magnitude. This should be adhered to. ii) As highlighted earlier, the Government has greatly reduced its reliance on domestic non-bank borrowing, through the National Savings Schemes. The contribution of non­bank borrowing was 20 percent in 2015-16, which has fallen to only 9 percent in 2020­21. iii) The merit of developing the NSS is that they can provide an incentive for higher saving by households. There is need to make the returns more attractive and expand the network of National Savings Centres. Inflow of funds into the NSS will also reduce the need for borrowing by government from the banking system. 17.6 Lack of Support to SMEs There are almost three million Small and Medium Enterprises in Pakistan today. According to the 2020-21 Labor Force Survey by the PBS, the total employment in SMEs was 14.9 million. This represents a share of the total non-agricultural employment in Pakistan of over 35 percent. Therefore, SMEs play as important role in the national economy. The growth in employment in SMEs is shown in Figure 17.1. 178