The federal government has approved a major policy decision by removing the Small and Medium Enterprises Development Authority (SMEDA) from the list of state-owned enterprises (SOEs), while delaying a separate proposal aimed at providing accounting relief to selected energy sector SOEs.
The decisions were taken during a meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOEs), chaired by Finance Minister Senator Muhammad Aurangzeb on Thursday. The meeting focused on governance reforms and financial reporting matters involving public sector organizations.
One of the key outcomes of the meeting was the approval to exclude SMEDA from the official list of state-owned enterprises. The move reflects the government’s ongoing efforts to refine the classification and governance framework of public institutions while ensuring that organizations are regulated according to their operational roles and legal status.
SMEDA has long played an important role in supporting Pakistan’s small and medium-sized enterprises through advisory services, policy recommendations, and business development initiatives. Its removal from the SOE framework is expected to align its institutional status with its development-focused mandate.
Meanwhile, the committee decided not to immediately approve a proposal seeking exemptions for selected energy sector state-owned enterprises from International Financial Reporting Standards (IFRS-14 and IFRS-9). Instead, the matter was deferred for further review.
The Petroleum Division has been directed to conduct additional consultations with the Finance Division and the Law and Justice Division before presenting a revised proposal to the committee. The decision indicates the government’s intention to carefully examine the legal, financial, and regulatory implications before granting any accounting-related exemptions.
International Financial Reporting Standards are designed to improve transparency, consistency, and comparability in financial reporting across organizations. Any exemptions from these standards can have significant implications for financial disclosures, investor confidence, and the overall governance of public sector entities.
By seeking additional consultations, the government appears to be prioritizing a balanced approach that protects financial accountability while addressing the operational realities faced by energy sector organizations.
The latest decisions also reflect the government’s broader agenda to strengthen oversight of state-owned enterprises, improve corporate governance, and ensure greater compliance with international financial reporting practices. These reforms remain an important part of Pakistan’s efforts to enhance transparency, improve fiscal management, and build confidence among investors and development partners.
The CCoSOEs is expected to review the revised accounting proposal once consultations between the relevant ministries and divisions are completed. Until then, the proposed IFRS exemptions for energy sector SOEs will remain under consideration.
