Industrial
Policy-2005
|
Chapter 1 |
Introduction |
1 |
|
Chapter 2 |
Objectives |
4 |
|
Chapter 3 |
Policy Strategy |
6 |
|
Chapter 4 |
Definitions and Classifications of Industrial Enterprises |
9 |
|
Chapter 5 |
Facilitating Role of Relevant Ministries and Public Institutions in
Industrialization |
11 |
|
Chapter 6 |
Privatization of State-Owned Enterprises and the Privatization
Commission |
12 |
|
Chapter 7 |
Fiscal and Financial Incentives |
14 |
|
Chapter 8 |
Extensive Establishment of Small and Medium Enterprises (SMEs) and
Cottage Industries for Countrywide Industrialization |
16 |
|
Chapter 9 |
Establishment
of Special Economic Zones Based on the Importance of the Industries, Availability
of Inputs and Regional Facilities. |
17 |
|
Chapter 10 |
Productivity and Industrial Relations |
18 |
|
Chapter 11 |
Participation of Women Entrepreneurs in Industrialization and their
Advancement |
20 |
|
Chapter 12 |
Investment Criteria of Feasibility Study for Planned Industrialization |
22 |
|
Chapter 13 |
Export-Oriented and Export-Linkage Industries |
23 |
|
Chapter 14 |
Foreign Investment |
25 |
|
Chapter 15 |
Board of Investment |
27 |
|
Chapter 16 |
Export Processing Zones |
28 |
|
Chapter 17 |
Industrial Technology |
29 |
|
Chapter 18 |
Technical and Institutional Assistance |
30 |
|
Chapter 19 |
Implementation, Monitoring and Review |
32 |
|
Chapter 20 |
Annexes |
35 |
|
|
Annex 1: Thrust Sectors Annex 2: Service Industries Annex 3: Reserved Industries Annex 4: Investment Criterion Annex 5: Acronyms |
35 36 37 37 38 |
Chapter 1
Introduction
Given the present environment
of global competition, the private sector is playing an important role in the
industrialization of the country. Therefore, the Government in the Ministry of
Industries has taken the role of a facilitator. Faced with the challenges of
the free market economy and globalization, the government has accepted private
ownership and management of industrial enterprises as one of the major guiding
forces in achieving economic growth. Besides this, the government has also
brought about many constructive and timely reforms in the running of
businesses, and liberalized trade so that private entrepreneurs can seize
opportunities of establishing and running industrial enterprises profitably and
freely.
In the meantime, quite a
number of publicly managed industrial enterprises have already been sold out and
transferred to private ownership. In order to establish economically
prospective industries in industrial sub-sectors, there are plans to set up
industrial parks and special economic zones so that huge amount of unused and
abandoned land can be utilized. All this is aimed at fostering
industrialization and economic development and generating employment
opportunities in the country.
To reduce poverty and
generate employment opportunities, more efforts are needed to establish
agro-based industries as well as to raise agricultural production.. This will
ensure the protection and fair price of agricultural products and employment of
a huge number of unemployed people. In order to create further employment
opportunities beyond the agricultural sector, initiatives should be taken to
set up small, medium and large industries across the country. If these types of
industries are set up in a planned way, then unemployment rates will decline
and poverty alleviation will be accelerated. With these objectives in mind, the
Industrial Policy has been radically reshaped.
In order to provide
administrative, institutional and infrastructural facilities in the country’s
industrialization, there are organizations such as the Bangladesh Standards and
Testing Institution (BSTI), Bangladesh Industrial Technical Assistance Center
(BITAC), Bangladesh Institute of Management (BIM), Bangladesh Small and Cottage
Industries Corporation (BSCIC), National Productivity Organization (NPO) and
Small and Cottage Industries Training Institute (SCITI) under the Ministry of
Industries, and the National Institute of Textile Training, Research and Design
(NITTRED), Textile Vocational Institutes, Textile Diploma Institute and
Bangladesh Silk Research and Training Institutes under the Ministry of Textiles
and Jute. For the leather industry, the Bangladesh College of Leather
Technology and different district level polytechnic institutes provide
technical education. These institutes also provide assistance for
industrialization by providing training on management and quality control of
goods, safeguarding consumers’ interests, producing and repairing
import-substitute spare-parts used in industries, manufacturing new tools
necessary for the production of industrial goods that are in demand, and by improving
efficiency and overall productivity. However, many industrial entrepreneurs are
not fully aware of the necessary technical and other assistance available for
the industrial sector through these institutes. Therefore, extensive publicity
is necessary for the proper use of these important institutes and the
facilities available there.
In order to further
strengthen the country’s industrialization process, the present government has
identified the Small and Medium Enterprises (SMEs) as a priority sector and as
the driving force for industrialization. A national taskforce led by the
Principal Secretary of the Prime Minister’s Office has been formed so that
proper policies and planning are followed in establishing SMEs. At the same
time, with a view to providing entrepreneurs with assistance in the
establishment of SMEs, a cell has been created under the supervision of the
Ministry of Industries comprising officials experienced in SMEs from the
Ministry of Industries, Bangladesh Small and Cottage Industries Corporation
(BSCIC), National Productivity Organization (NPO), Asian Development Bank
(ADB), FBCCI, National Association of Small and Cottage Industries, Bangladesh
(NASCIB) and women entrepreneurs.
The provisions of all
facilities for attracting foreign investments have been envisaged in the
Industrial Policy. The government has taken an initiative to formulate a
separate SME policy to provide entrepreneurs with necessary guidance and
strategic support in respect of the establishment of SME industries all over
the country. These strategic guidelines will be followed in establishing SMEs
across the country.
Far-reaching changes have
occurred in the past decade in economic and social activities across the globe,
especially with regard to the participation, contributions and successes of
women in industrial activities. Therefore, the creation of women entrepreneurs
and their participation in industrialization have been given considerable
prominence in the present Industrial Policy.
Necessary steps have been
taken to hygienically preserve and market agricultural products of
Steps will be
taken to properly utilize the natural and mineral resources of the country such
as gas, coal, hard rock, limestone, silicon, monazite, zircon, rutile, oyster,
pearl, coral, fossil, seaweeds, etc, available in the country’s long sea-beach
so that new profitable industries can be set up. Steps will also be taken at
the same time to use solar power and municipal refuse to generate electric
power in order to minimize power shortage in running small and cottage
industries.
This is an age of information
and communication technology (ICT). The application of ICT in running
industrial enterprises efficiently and profitably can ensure quality
development of goods, make production cost-effective and ensure faster customer
services. So, providing further importance and incentives to the use of ICT in
a number of sectors is one of the notable features of the present Industrial
Policy.
The industrial sector is
likely to grow rapidly over the next decade raising its contribution to the
country’s GDP to 30 to 35 percent, and the workforce in this sector is expected
to increase to 35 percent of national employment need. In order to attain this
growth in this sector, special importance has been given in the Industrial Policy
on agro-based and agro- processing industries and on steps to overcome possible
adverse conditions in the export-oriented garment sector. Importance has also
been given on considering the SMEs and cottage industries as one of the major
driving forces, providing assistance to women entrepreneurs on a priority
basis, setting up special economic zones in different parts of the country,
improving the quality of industrial products to world standard, marketing of
goods at competitive prices, and enhancing productivity in the industrial
sector.
There is a proposal in the
Industrial Policy for the formation of a high level committee led by Minister
of Industries and comprising senior officials from public and private
organizations involved in industrialization.
This committee will submit a report to the Cabinet for its decisive
approval, and afterwards the relevant ministries/divisions/ agencies will take
necessary programs for industrialization to get underway in the approved
sectors.
In the end, it can be hoped
that the guidelines contained in the new Industrial Policy will help expand
planned industrialization in the country, bring about sustainable and
continuous industrial growth, and overcome the past failures of
industrialization to a great extent. As a result, a sound and prospective
foundation of economic development will be established. This will help bring
about poverty alleviation, create further employment opportunities, reduce
unemployment instances, improve living standards of people, and achieve an
overall economic growth in the country.
Chapter 2
Objectives
2.1 One of the
foremost objectives of the Industrial Policy 2005 is to set up planned
industries considering the real domestic demand, prospect of exporting goods
abroad, and discouraging unplanned industries in the light of past experience.
2.2 Accept private
initiatives as the main driving force of economic development and uphold the
government’s facilitating role in creating a favourable atmosphere in order to
augment private investments in the country’s industrialization, given the
background of a free market economy and globalization,.
2.3 Arrange for
state-owned industrial enterprises to be sold/transferred/leased or
administered in any other way by the Privatization Commission or concerned
ministries in order to accelerate the privatization process.
2.4 Take necessary
initiatives to set up industries with private entrepreneurships, and where that
is feasible, establish industries on state initiative in those sectors that are
considered very important and essential because of national interest, where
private entrepreneurs are not forthcoming.
2.5 Catering the needs
for local and foreign market and also for consumer satisfaction of the local
products; measures to be undertaken (a)
produce world class quality products, (b) diversification of goods, (c)
introduce cost-effective management in the production system, (d) more value
addition in the industrial sector, and (e) provide support for enhancing
productivity by using continuous, appropriate and advanced technology.
2.6 Provide assistance
to augment the industrial sector’s contributions to the GDP of the national
economy, meet the general demands of local consumers and earn more foreign
exchange so that local industrial entrepreneurs can attain further capacity to
establish industries, and industrial goods can have access to the overseas
market on a competitive basis.
2.7 Provide
inspiration for the speedy expansion of cottage industries and SMEs and for
further investment in these sectors so that new employment opportunities are
generated, unemployment reduced and poverty alleviation program made in the
country.
2.8 Prioritize the
expansion and development of agro-based and agricultural processing industries,
and assist in the expansion of poultry, dairy and goat-sheep industry as
agricultural industries.
2.9 Provide women
entrepreneurs with all necessary assistance in establishing industries in
various sectors.
2.10
Increase
productivity at enterprise level; produce high-value added products step by step
through development and application of appropriate technology and increase of
export through export diversification.
2.11
Provide
all necessary assistance for producing environment-friendly product with the
objective for creating a pollution-free environment in the industrial sector.
2.12
Expand the local market and establish more backward
linkage industries in order to accelerate the export of high value-added
garments produced in the export-oriented garment industries and other relevant
industrial sub-sectors.
2.13
Further enrich the industrial sector with the proper
utilization of the country’s various natural and mineral resources.
Chapter 3
Policy Strategy
3.1 Ensure full
utilization of current production capacity in the industrial sector, especially
by reusing that it is not hampered because of infrastructural deficiency.
3.2 Provide special facilities as well as
infrastructural support to Cottage and Small and Medium Enterprises (SME)
located in different parts of the country.
3.3 Provide financial,
technical, technological and infrastructural facilities in order to inspire
setting up and developing agro-based industries.
3.4 Take steps to
preserve and market agro-based goods hygienically by processing in frozen,
pasteurized, canned or dry form so that goods produced in the country are
preserved and marketed in compliance with modern standards in order to ensure
that they can be made available in the local market or exported throughout the
year.
3.5 Take steps to
properly utilize the natural and mineral resources in the country such as gas,
coal, hard rock, limestone, silicon, monazite, zircon, rutile, oyster, pearl,
coral, fossil, seaweeds, etc, available on the long sea-beach so that new
profitable industries can be set up.
3.6 Take action to use
solar power and municipal refuse to generate electric power in order to run
small and cottage industries.
3.7 Assist backward
linkage industries on a priority basis. The objective is to diversify and
produce goods of world standard and value added items so that they help to
diversify our exports.
3.8 Consider the
readymade garment and textile industries as a priority sector in view of their
special contributions to the country’s export trade.
3.9 Provide necessary
assistance to value added linkage industries and sub-contracting industries so
that they are developed.
3.10
Provide assistance to waste management development in
order to ensure proper waste minimization and waste removal and produce
pollution-free goods.
3.11
Strengthen and ensure efficiency in import
substitution industries so that the gradually increasing demand for goods in
the local market can be met.
3.12
Inspire well-proportioned industrialization across the
country by providing incentives, wherever necessary.
3.13
Conduct a survey to determine the demand in the local
market of goods produced in sick industries as a primary step towards the
rehabilitation and development of those industries. In view of competition in
the local market, take action to reduce the production cost of goods in sick
industries in a cost-effective way so that the qualitative standards of goods
and productivity are ensured.
3.14
Provide incentive to various institutions that are
concerned with technological and technical efficiency enhancement, side by side
with human resources development, in order to improve efficiency in the
industrial sector.
3.15
Remove policy discrimination, if any, between domestic
and foreign investments, and enhance regional and sub-regional cooperation.
3.16
Privatize non-profitable industries in the state
sector quickly and in phases. Restrict state investment and administration only
to those industries in the public sector which the government think are not
safe for investment in the private sector.
3.17
Provide all-out assistance to create a strong capital
market so that investments in the industrial sector are increased.
3.18
Give preference to infrastructural development
including ports, power, transport and communications, and human resources
development. Specifically promote private investments along the principles of
construction, administration and BOO, and construction, administration and BOT
in these sectors.
3.19
Quite a number of publicly managed industrial
enterprises have already been sold and transferred to private owners. Take
initiatives to set up industrial parks with a view to establishing economically
viable industries in these industrial sub-sectors.
3.20
Provide further structural and other facilities to
establish and develop compact industrial areas. Develop planned industrial
areas by establishing Special Economic Zones in areas with vast economic
potentials, and utilizing local resources.
3.21
Take necessary steps to bring about the country’s
industrial development in line with different agreements with the World Trade
Organization (WTO).
3.22
Consider highly developed technology-based seed
breeding, production and development, and agricultural goods processing
activities as industries. At the same time, take strong steps regarding the
diverse use of jute.
3.23
Market daily essentials such as flour produced from
wheat in flour mills, refined edible oil produced from unrefined edible oil,
refined salt produced from unrefined salt, etc, after enriching them with
vitamins, minerals and iodine.
3.24
Arrange for incentives to be given for research and
development, acceptance and transfer of environmentally friendly appropriate
technology. At the same time, develop market-oriented institutional structure
in overall technological development.
3.25
Promote foreign direct investments in order to bring
about technology transfer, efficiency and management development and enhance
marketing skills.
3.26
Establish coordinated and extensive Management
Information Service (MIS) comprising different public and private agencies
under the Ministry of industries (various chambers of commerce and industries)
and arrange for information received from MIS to be supplied to administrative
divisions and districts levels.
3.27
Create a long-term credit fund to generate industrial
production capacity and also a venture capital fund to support in the
commercial production and marketing of creative industries.
3.28
Collect information on industrial development and
arrange for technology dissemination through the Technology Dissemination Cell,
set up at the Ministry of Science and Technology, Industry and Business
Association, and the
3.29
Take assistance from extended administrative-judicial
system (Financial Loan Courts,
3.30
Ensure the availability of the working capital from
financial institutions after the establishment of an industry so that working
capital can be obtained in time.
3.31
Ensure the availability of assistance of the capital
market so that industrial entrepreneurs can overcome the lack of capital and
mobilize the necessary capital from the capital market in order to establish or
administer industrial enterprises.
3.32
Consider other industry related policies such as the
Textiles Policy, Jute Policy, and Silk Policy as supplementary to the
Industrial Policy.
Chapter 4
Definitions and Classifications
of Industrial Enterprises
4.1
Broadly speaking, industry includes manufacturing and
service activities
4.2
Production, processing and assembling, and
rehabilitation and fabrication of manufactured goods are included in industry.
4.3
The services that are received through the use of
machinery and durable resources are included in the service industries. The
service industries have been enlisted in Annex-2.
4.4
Definitions of industries in the manufacturing sector:
(a)
“Large Industry” means an industry in which the
value/replacement cost of durable resources other than land and factory
buildings is above 100 million taka.
(b)
“Medium Industry” means an industry in which the
value/replacement cost of durable resources other than land and factory buildings
is between 15 million and 100 million taka.
(c)
“Small Industry” means an industry in which the
value/replacement cost of durable resources other than land and factory
buildings is under 15 million taka.
(d)
“Cottage industry” means an industry in which members
of a family are engaged part-time or full-time in production and
service-oriented activities.
4.5
Definitions of industries in the non-manufacturing
sector (trading and other services):
(a)
“Large Industry” means an industry in which more than
100 workers work.
(b)
“Medium Industry” means an industry in which 25 to 100
workers work.
(c)
“Small Industry” means an industry in which fewer than
25 workers work (unlike family members in a cottage industry).
Reserved
industries:
4.6
Those industries that are necessary to be kept
reserved by the government in the interest of national security and are
sensitive have been identified as reserved industries. A list of reserved
industries has been given in Annex-3.
Thrust sector:
4.7
The thrust sector will mean those
industries/industrial sub-sectors which have already been able to successfully
contribute to the country’s industrialization and poverty alleviation by
increasing GDP, creating employment opportunities and increasing export income.
Special incentives and financial facilities such as tax exemptions, exemption
from dual taxation, tax holiday, and taxation at a reduced rate or accelerated
depreciation (if the tax holiday and tax exemption facilities cannot be
provided for new industries in the future) can be considered. The facilities
provided to those industries that are established in EPZ areas including
export-oriented industries can also be provided to the thrust sector. The
objective will be to use domestic technology, import substitution, adjustment
and/or export augmentation. But entrepreneurs under the thrust sector will not
receive these facilities automatically. The government will determine the
facilities to be received by thrust sector entrepreneurs after analysing and
reviewing the performances and contributions of their sub-sectors/industrial
enterprises to the national economy. A list of the thrust sector has been given
in Annex-1.
4.8
The definitions of the abovementioned industries may
change over time and variation of location.
Chapter 5
Facilitating Role of Relevant Ministries
and
Public Institutions in
Industrialization
5.1 The Bangladesh
government gives importance to the private sector as a driving force of
industrialization, and has brought about constructive and realistic reforms in
formulating policies. The government will provide assistance in the following
way to play a supporting role through concerned public institutions:
(a)
Before setting up industries, all foreign investors
will register with concerned offices in a measured manner.
(b)
The Bangladesh Small and Cottage Industries
Corporation will allot industrial plots in its own industrial areas and in
other industrial areas created with specific objectives. Similarly, the
Bangladesh Export Processing Zones Authority (BEPZA) will allot plots in its
own areas. The Board of Investment will make necessary recommendations and take
steps to allot land where public land is available.
(c)
The concerned utility agencies will determine the
timeline for providing electric power, gas, water and sewerage, and telephone
connections in consultation with relevant authorities and provide clearance
regarding environmental pollution. Wherever possible, these authorities will
provide their services through one-stop service centers.
(d)
The Board of Investment and BEPZA will approve, as
necessary, the royalty, technology or technical assistance fees and the
appointment and remuneration of foreign employees.
(e)
The sponsoring authority will provide entrepreneurs
with advance information in order to avoid investment risks because of
unplanned and excessive investments in certain sectors.
5.2 Approval will be
given for establishing EPZ areas and developing industrial parks in the private
sector. The government will provide all possible assistance for the EPZ areas
and parks to be developed.
5.3 Accreditation bodies
will be set up and arrangements made for properly conducting activities of
public and private laboratories/institutions engaged in examining and fixing
the standards of goods produced at home or imported from abroad.
5.4 Activities of
training institutes under different ministries that are engaged in human
resources development in the industrial sector will be made more dynamic and
effective. These institutes include the Bangladesh Institute of Management
(BIM), National Productivity Organization (NPO), Small and Cottage Industries
Training Institute (SCITI) and Training Institute for Chemical Industries under
the Ministry of Industries; the Textile Industrial Development Center under the
Department of Textiles; the training institutes under the Bangladesh Jute Mills
Corporation; Bangladesh Handloom Board and Bangladesh Silk Board; and some
other relevant training institutes.
Chapter 6
Privatizing State-Owned
Industries and the Privatization Commission
6.1 The present policy
of privatizing public sector industries will be pressured with vigour.
6.2 Investments in the
public sector will be restricted to the “reserved sector”. State investments in
the industrial sector will be treated as residual investment in the future.
State-owned enterprises will be complimenting to private sector industries and will be
encouraged to compete.
6.3 The present
state-owned industries will be given autonomy as far as possible so that they
are run on commercial lines.
6.4 Except for the
reserved sector, capital will gradually be withdrawn from state- owned
corporations.
6.5 100% shares of
public sector enterprises will be sold out, if necessary.
Shares of public sector industries will be sold out to
the public to ensure wider distribution of shares and securities to the public
and to involve the public in the management of these industries.
6.6 Bangladeshis
working abroad will be encouraged to buy shares of industrial enterprises in
foreign currency.
6.7 If the
Privatization Commission cannot privatize state-owned enterprises successfully,
then the concerned ministry will sell/transfer/lease those enterprises or take
any other action in this regard.
The Privatization
Commission and privatization policies:
6.8 The government is
committed to bring about quick privatization of state-owned industries,
businesses and service institutions. The reason is to strengthen the role of
the private sector in the national economy and establish the private sector as
the main carrier of development, given the sick and deteriorating condition of
state-owned enterprises. With this end in view, the government has formed the
Privatization Commission. The main objectives of the Commission are to: (a)
promote social welfare by enhancing efficiency; (b) attract foreign
investments, enhance efficiency and improve mutual relations; (c) generate
revenue; (d) release resources from loss-making industries and invest in other
social and public welfare activities; and (e) stimulate competition so that
employment opportunities are created and protected.
Privatization
policies to be followed:
6.9 (a) To protect the
interests of workers, employees and officers; (b) give importance to consumers’
and good will; (c) avoid possible closure of any industrial enterprises; (d)
consider the market price as the sale price; (e) safeguard the interests of
consumers; (f) conclude transfer documents or agreements; and (g) maintain
transparency, privacy and unbiased behaviour.
Activities of the
Privatization Commission in brief:
6.10
(a) To formulate program of privatization; (b) assess
the value of industries/trade/service institutions marked for privatization;
(c) draw up guidelines for preparing reports on privatization related
assessment; (d) sell industrial enterprises through tender; (e) transfer
portions of shares to staff when selling shares through Stock Exchange; (f)
sell the public shares of private limited companies; (g) conclude management
agreement; (h) give lease; (i) sell/liquidate assets directly; (j) prepare a
progress report on privatization activities; and (k) take back the possession
of privatized enterprises.
Chapter 7
Revenue and Financial Incentives
7.1 There will be no
differences between the same types of industries established in the public and
private sectors in respect of customs duty and other taxes.
7.2 (a) As of today, the tax holiday
facility will be provided till the end of 2005 on the basis of the locations of
industrial enterprises. After that time, this facility will depend on what the
government decides in this regard. However, tax holiday will not be applicable
for extended units of industrial enterprises. At least 40% of the tax-free
income must be re-invested.
(b)
As an alternative to tax holiday, industrial
enterprises will receive depreciation at the rate of 100% in the first year. Apart
from this, industrial enterprises receiving tax holiday will be entitled to 80%
depreciation in the second year and 20% depreciation in the third year for
their extended unit plants and machinery.
(c)
If the tax holiday and tax relief facilities cannot be
provided for setting up new industries in the future, then taxation at a
reduced rate will be considered.
(d)
Agro-processing industries and computer software
businesses will receive income tax relief from 1 July 2002 to 30 June 2006.
(e)
Credit equity ratio will be fixed at a reasonable rate
to inspire investment in textile industries.
(f)
Industries established in EPZ areas will continue to
receive income tax relief for 10 years from the date of commercial production.
(g)
As an alternative to tax holiday, industries established
between 1 July 2002 and 30 June 2005 will receive the taxation facility at a
reduced rate of 20%.
(h)
Industrial enterprises engaged in the production of
readymade garments will receive the taxation facility at a reduced rate of 10%
on their export incomes till 30 June 2006; jute goods industries will receive
the taxation facility at a reduced rate of 15% on their export incomes till 30
June 2006; and textile industries will receive the taxation facility at a
reduced rate of 15% on their export incomes till 30 June 2006.
(i)
Financing institutions will be encouraged to fix their
interest rates at the minimum on their short- and long-term loans for
industrialization.
7.3 The present
structure of duty concession on machinery imports will continue. Imported machinery
and spare parts will be exempt from payment of VAT subject to existing
conditions. In addition to other incentives schemes, activities of the Equity
and Entrepreneurship Fund (EEF) will be intensified to give priority to
entrepreneurs of under-developed areas and entrepreneurs of the BSCIC
industrial enclaves in receiving loans from this fund.
7.4 The duty
structures of imported raw materials, intermediate goods and manufactured goods
will be set at gradually escalating rates.
7.5 In order to
eliminate unequal competitions between goods produced at home and goods
imported, the prevailing duty structures will be made reasonable, if necessary.
If any items are illegally imported at a dumping price – a price that is
unjustified and below the production costs, then with recommendations from the
Bangladesh Tariff Commission, the anti-dumping law will be applied and
counter-veiling duty imposed.
7.6 Industrial
enterprises established outside the EPZs, and industrial units with 100%
foreign investments, joint ventures (Type B) and local ventures may conclude
foreign exchange related agreements with foreign creditors with the prior
approval of the Board of Investment. 100% foreign owned industrial units (Type
A) situated in that area can take credit from abroad without prior approval.
The principal amount and interests of these loans can be paid without the prior
approval of the Bangladesh Bank.
7.7 Special incentives
will be given to non-resident Bangladeshis in order to encourage them to make
investments in the country. They will be provided with the same facilities that
are given to foreign investors in respect of making investments in Bangladesh.
The Securities and Exchange Commission will reserve 10% of the initial public
offers for non-resident Bangladeshis. Besides, they can keep deposits of
foreign exchange in their NFCD (Non-resident Foreign Currency Deposit)
accounts.
7.8 Special revenue
facilities (as described in Section 4.7) will be provided to industries marked
as “thrust sectors”, SMEs and cottage industries.
7.9 Industrial enterprises
registered with the Board of Investment need not pay any transfer fee and gains
tax to purchase land for setting up new industries or to transform an industry
into a limited company provided that no changes can be made in the ownership
structure after that transfer.
7.10
Steps will be taken to create an industry fund in the
Bangladesh Bank, strengthen specialized banks, establish a country fund, expand
the capital market, create an endeavour fund, and rationalize the tax holiday
system.
Chapter 8
Massive Establishment of Small,
Medium Enterprises ( SMEs) and
Cottage Industries in
Countrywide Industrialization
8.1
The development and expansion of SMEs is regarded as a
very important medium of achieving industrialization and economic growth in both
developed and developing countries. The role of SMEs in industrial revolution
in the industrialized world was enormous, and this trend has continued to-date.
The role of SMEs in generating investment, savings, profit, employment
opportunities, export, regional industrialization and improvement of people’s
living standards as well as national development is very important. To this
end, forward linkage, backward linkage, value addition activities and
productivity improvement should be accelerated in order to establish and expand
SMEs in the manufacturing sector. As such the SME sector has been treated as a
priority sector in the Industrial Policy 2005.
Scope of SMEs:
8.2
The structural arrangements of Bangladesh’s industries
show that jute, textiles, paper, steel and engineering, cement, chemical,
fertilizer and pharmaceutical industries are under the big and medium scale
industries. On the other hand, specialized textile industries (including
garments), backward linkage industries, hand-operated welding, food processing
and food linkage industries, leather, ceramics, light engineering including
automobiles, basic metal engineering, small scale chemical engineering, rubber
industries, paper printing and publishing industries, small fabrication
industries, non-metal mineral products, batteries, electrical, electronics,
handicrafts, agro-based industries, multilateral jute goods, silk industries,
fruit processing, poultry farming, fisheries, tea-gardening and processing,
vegetable seed farming, floriculture and agro-forestry, and printing
industries, ginning and baling, construction industries, transportation
(including automobiles), cinema and photography, pathological laboratories,
cold storage, furniture, computer industries, fast food, frozen food, etc, under
service industries, and many other sectors are included in the SMEs.
8.3 SMEs will be
established on a greater scale across the country in order to bring about
poverty alleviation, unemployment reduction and creating more employment
opportunity so that national economic growth can be attained. To this end, the
government has taken an initiative to draw up a separate SME policy with a view
to providing necessary guidelines and strategic assistance in respect of
establishing SMEs throughout the country. The guidelines and strategy
incorporated in the relevant policies will be pursued in establishing and
expanding SMEs of all kinds throughout the country.
Chapter 9
Establishment
of Special Economic Zone based on the Importance
of
Industries, Availability of Inputs and Regional Facilities.
9.1 In some of the
Asian and Pacific countries, such as Taiwan, China, Singapore and Malaysia,
industrial enterprises have been established in various regions considering
their socioeconomic conditions and importance, and economic and commercial
opportunities on the basis of the availability of various facilities. Many
other countries across the world are pursuing this concept. The setting up of
special economic zones in Bangladesh considering the socioeconomic background
and facilities available in various regions is equally important.
9.2 Because this
concept to a great extent is cost-effective and economically profitable,
special economic zones will be established across Bangladesh on a priority
basis considering the nature and types of industries and comparative costs
across regions
9.3 A considerable
size of land has remained unproductive because of salinity and infertility in a
number of regions in the country. On the other hand, the labor and creative
working capacity of a great number of efficient people cannot be utilized
because of lack of opportunity. Therefore, initiatives will be taken to
establish and run industries profitably in special economic zones on the basis
of facilities available in various regions so that unused land, human and other
resources can be properly used.
9.4 By creating
special economic zones, cluster villages can be established quickly for running
industrial enterprises. Cluster villages can be set up in especial economic
zones for industries such as leather industries, hosiery industries, small
chemical industries (paint, varnish, etc), dyeing, printing and finishing,
electronics, electrical goods, handicrafts, boutique, etc.
9.5 As a foremost
strategy for maintaining balance in the country’s economic development,
initiatives will be taken to set up industrial enterprises on a limited scale
and on a trial basis in economic zones.
Chapter 10
Productivity and Industrial
Relations
10.1
Productivity improvement program shall be undertaken as
a driving-force by using continuous and modern technology in all national
economic activities including agriculture sectors, especially in industrial
enterprises and institutions with the objective to build a self-reliant
Bangladesh and also for facing the present challenges of globalization and free
market economy.
10.2
The productivity enhancement program will be pursued
as a national movement under government support. The objective is to establish
good relations and understanding between all concerned parties (workers, owners
and the government) in order to speed up productivity in all national economic
activities, especially in the industrial field.
10.3
It has been proposed that the month of January will
henceforth be observed as the productivity month with a view to strengthening
productivity enhancing activities in all industrial enterprises and
institutions. The aim is to continue a positive productivity enhancing effort
in the industrial sector throughout the year.
10.4
In recognition of success in manufacturing quality
goods of international standard and successful running of an industrial
enterprise, a national “Excellence in Productivity and Quality” award will be
given every year from now on to an institution which will achieve the highest
productivity records.
10.5
A separate policy entitled “Productivity Policy” will
be drawn up which will provide help to and exert influence on developing
productivity in the country.
10.6
To ensure application of productivity enhancement
strategies in all industrial enterprises and institutions,
productivity-training programs for human resources development will be
conducted at the enterprise level.
10.7
In its regular broadcasts, Bangladesh Television and
Radio Bangladesh will stress the importance of productivity and announce the
positive results, so that people around the country become more conscious and
interested in it.
10.8
A Productivity Data Bank will be established in NPO so
that workers, owners, the government, professionals, researchers, planning
specialists and others concerned can access information for necessary guidance
on productivity.
10.9
The interrelationship between wage and productivity
will be established as a strategy to increase productivity in industrial
enterprises and institutions.
10.10
The total quality management culture will be adopted
as a policy to introduce the joint consultation system between workers and
owners in order to continuously increase productivity in the industrial sector.
10.11
The necessity for developing proper workers-management
relations in the industrial sector will be upheld, and if necessary, some of
the sections of the present labor law will be reformed in line with
recommendations of the Labour Law Commission, as committed to the ILO, so that
necessary steps can be taken to improve industrial relations.
10.12
Collective bargaining will be given priority in fixing
wage.
10.13
The Tripartite Consultation Council (the government,
owners and the trade union), National Productivity Council and other
national-level organizations will help the government formulate policies on employment
expansion, productivity enhancement, training, efficiency development, etc.
10.14
Employment of child labour will be stopped in
industrial enterprises.
Chapter 11
Participation and Development of
Women
Entrepreneurs in Industrialization
11.1
Over the last decade, there have been substantial
progress in women’s participation and successes in socioeconomic activities,
especially in industrial activities, in Bangladesh as elsewhere in the world.
So, women’s participation in the country’s industrialization must be ensured on
a wider scale.
11.2
Special emphasis will be given to identify women
entrepreneurs capable of running independent and self-sufficient industries and
businesses all across the country.
11.3
Necessary steps will be taken to provide women entrepreneurs
with pre-investment advice and assistance in drawing up and implementing
projects.
11.4
Various incentives and financial support will be
considered for women entrepreneurs to get established in small and cottage
industries.
11.5
Technical, financial and training assistance will be
provided for establishing SMEs considering the social stance and status of
women entrepreneurs. Modern technical training will be arranged for enhancing
the efficiency of women entrepreneurs in cooperation with different institutions
established under the Ministry of Industries, such as BSCIC, BITAC, BIM, NPO,
and SCITI.
11.6
Women entrepreneurs will be given preference in
expanding and achieving growth in service industries.
11.7
Women entrepreneurs will be encouraged on a greater
scale in setting up and running agro-based industries in the country.
Similarly, women entrepreneurs will be given technical and financial assistance
in establishing garment (knit and woven), electronic, ceramic, hosiery, frozen
food, cold storage and high value added industries.
11.8
Women entrepreneurs will be provided with incentives
and financial assistance in establishing cottage industries of decorative
items, leather goods, embroidery, imitation items, block, boutique, handicrafts
of bamboo and cane, toys and other gift items.
11.9
In order to create women entrepreneurs of high
standard, opportunities will be generated for advanced training and necessary
capital, and successful implementation of projects will be ensured to set up
SMEs and cottage industries. With this end in view, a number of plots will be
reserved for women entrepreneurs in industrial parks in all divisional towns of
the country.
11.10
Necessary initiatives will be taken to help improve
the standard of goods produced by women entrepreneurs, create new markets,
publicize, promote and sell their products in local and foreign markets.
11.11
The participation of women entrepreneurs in
policymaking in the field of industrial development will be ensured.
11.12
The establishment of a separate bank under public or
private initiative will be considered so that women entrepreneurs can have an
easy access to industrial credit, equity capital, venture capital and working
capital. Co-lateral free loans will be considered for women entrepreneurs after
examining their competence.
Chapter 12
Investment Criteria of
Feasibility Study for
Planned
Industrialization
Policy Strategy for Investment
Criteria
12.1
Because of the scarcity of capital in the country,
financing institutions investing in the industrial sector have to conduct pre-investment
study properly. With this end in view, the investment criteria that are suitable should be examined and then
applied. Special care should be taken in respect of big and medium scale
industries because they require big amount of capital to be invested. While
setting up large and medium scale industries, entrepreneurs and financing
institutions should consider improving the conventional investment tactics,
examine and review the different investment criteria, and then conduct the
feasibility study on the basis of that criterion which is most suitable. If
necessary, more than one criterion can be used to conduct feasibility study.
Investment criteria have been explained in brief in Annex 4.
12.2
Creating re-investment opportunities in manufacturing goods
in the industrial sector is an important factor. So, production activities in
the industrial sector should be administered in such a way that re-investment
opportunities are created.
12.3
The principles of productivity gain sharing are
appropriately followed in many developed and developing countries in order to
attain continuous growth in the production sector. The objective is to
distribute profit between workers, owners and the government on an equal basis.
This concept can also be pursued in running industrial enterprises in our
country. To this end, a minimum productivity standard should be set in each
industrial enterprise.
Chapter 13
Export-Oriented and Export
Linkage Industries
13.1
Export-oriented industrialization is one of the major
objectives of the present Industrial Policy. Prioritizing export-oriented
industries and providing all-out government assistance in respect of this will
be ensured.
13.2
Those industries that export at least 80 percent of
their produce or supply 80 percent raw materials for exportable items or those
business enterprises that export at least 80 percent of their services will be
considered export-oriented industries (IT-related goods are also included).
13.3
The following incentives and facilities will be
provided in order to attract investment in 100 percent export-oriented
industries:
(a)
The present duty-free import policy will continue for
the import of capital machinery and for up to 10 percent of the value of the
spares of that capital machinery. The rates of customs duty in the import
sector have been reorganized into three tiers: 7.5%, 15% and 25%.
(b)
The duty drawback system has been further simplified,
and with this in mind, a flat rate will be fixed for all exportable items.
Exporters will get duty drawback facility at a flat rate from concerned
commercial banks.
(c)
The system of providing up to 90 percent credit
against non-negotiable and fixed L/Cs / sale agreements will continue.
(d)
In order to ensure backward linkage, export-oriented
readymade garment industries and other local raw material using export-oriented
industries will be provided with various facilities at a prescribed rate.
Similar facilities will also be provided to local deemed exporters in
export-oriented industries.
(e)
Export-oriented industries will be given the facility
of handling foreign exchange of certain amount which will be beyond the
Bangladesh Bank’s foreign exchange regime in order to facilitate the opening of
their offices abroad, promoting their products and taking part in international
trade fairs.
(f)
The export income earned from cottage industries will
be 100% income tax-free, and the SMEs and other industries will be given income
tax rebate at the rate of 50% of their export income.
(g)
The facility of importing raw materials necessary for
the production of export goods but enlisted as banned/reserved items will
continue.
(h)
Value-added jute, jute-mixed goods and diversified
jute goods produced with new technology will be treated as export-oriented or
import-substitute industries.
(i)
Consistent with present government policies,
facilities will be given for tax-free import of raw materials (at a prescribed
amount) necessary for the production of exportable goods.
(j)
If local raw materials are provided to local
industries or projects through foreign currency L/Cs, then those will be
treated as indirect export and will be given facilities, which are applicable
for export.
(k)
The export credit assurance scheme will be further
expanded and strengthened.
13.4
The export-oriented industries identified, as the government’s
thrust sectors will be given special facilities including ‘venture capital’
facilities.
13.5
The current facilities of duty and tax assessment and
rebate on imported goods (before arrival) will continue. Clearing process and
formalities will be further simplified so that the clearance process takes the
least time to be completed.
13.6
In respect of export-oriented and export linkage
industries, all sorts of facilities described in the export policy will be
given, apart from the facilities mentioned above.
13.7
Utility services will be provided to 100 percent
export-oriented industries at reduced/rebated rates.
Chapter 14
Foreign Investment
14.1
Foreign direct investment will be encouraged in all
industries in Bangladesh except those in the reserved lists, banking, insurance
and other financial institutions. This type of investments can be made in local
public and private sectors individually or jointly. The capital market will be
open for “portfolio” investments.
14.2
The legal framework for foreign investments has been
drawn up on the basis of the Foreign Investment (Development and Preservation)
Act 1980. The framework is as follows:
·
Equal treatment of both local and foreign investments;
·
Safeguarding foreign investments from state
expropriation; and
·
Assurance of repatriating finance and profit deriving
from share disposal.
14.3
There will be no restrictions to foreign investment in
terms of equity participation, i.e., 100% foreign equity can be invested. While
setting up industries with complete foreign investment or in joint venture,
there will be no restrictions to the sale of shares through public issue
irrespective of paid-up capital. However, foreign investors or institutions can
purchase shares through Stock exchange, and necessary guidelines on this will
be drawn up. Foreign investors or institutions can avail loan from local banks
to meet their running costs. Conditions for such type of loan will be
determined on the basis of the relations between the bank and the borrower.
14.4
Foreign investors can avail of the same facilities as
local investors in terms of tax hoilday, royalty payment, technical fees, etc.
Personal income taxes need not be paid by foreign technicians appointed in
foreign companies for up to three years, and after that period, they have to
pay on the basis of a dual taxation revocation agreement or any other agreement
reached with their respective countries.
14.5
In respect of foreign investment, full repatriation
facility of invested capital will be given. Profits and dividends are also
repatriable. If foreign investors choose to reinvest their repatriable dividend
or earned profit, then this will be treated as new investment. Foreign citizens
appointed in Bangladesh will be entitled to a remittance of 50% of their wage
and full repatriation of their savings and retirement benefits.
14.6
There will be no restrictions to the issuing of work
permit for efficient foreign professionals on the basis of the recommendations
of local and foreign investing companies or joint venture companies. Multiple
entry visa will be issued to foreign investors for three years and to efficient
professionals for the whole period of their appointment.
14.7
In respect of foreign investments in thrust sectors,
preference will be given to small and medium scale investors when allotting plots
in BSCIC industrial enclaves.
14.8
Investments by non-resident Bangladeshis will be
treated as foreign direct investment.
14.9
Steps will be taken to protect intellectual property
in respect of new goods and formulae.
14.10
International norms and systems will be followed in
respect of providing investment assurance and conflict resolution.
14.11
Initiatives will be taken to expand the facilities of
EPZ areas to those 100% export-oriented industries that are established in
non-EPZ areas.
Chapter 15
Board of Investment
15.1
In accordance with the Board of Investment Act 1989,
the Board of Investment will provide necessary assistance and facilities to
boost private investment in Bangladesh. The Board, formed under the leadership
of the Prime Minister, with Ministers and Secretaries representing relevant
ministries, will take necessary decisions in order to help establish new
industries and provide assistance to already established industries.
15.2
The Board of Investment will provide one-stop service
in the following fields so that investors get infrastructure facilities quickly
when setting up industries:
(a)
Electric and gas connections;
(b)
Water and sewerage connections;
(c)
Telecommunications facilities;
(d)
Customs clearance of imported machineries, spare parts
and raw materials;
(e)
Clearance from environmental agencies; and
(f)
Other necessary facilities and services for speedy
setting up and running of industries.
15.3
With this end in view, all relevant public agencies
will be involved with the one stop service of the Board of Investment.
Chapter 16
Export Processing Zones
16.1
Export Processing Zones have been set up in the
country under the Bangladesh Export Processing Zones Act 1980 in order to help
establish export-oriented industries. All infrastructure facilities including
telecommunication and utilities have been provided in the zones. Under the
Bangladesh Private Export Processing Zones Act 1996, permission has also been
given to bring in foreign investments or joint ventures or for setting up
private export processing zones.
16.2
Keeping in mind that agro-based industries can play an
important role in the socio-economic sector of the country, cash incentives may
be provided by the government to entrepreneurs of agro-based industries in
EPZs, especially in the Mongla, Ishwardi and Uttara (Nilphamari) EPZs.
16.3
10 percent of the goods produced in EPZ industrial
units can be exported inside the country
subject to payment of applicable duties and taxes (through foreign currency
L/Cs).
16.4
100 percent export-oriented industries outside the
EPZs can sell 20 percent of their products in the local market subject to
payment of applicable duties and taxes.
16.5
The following investments are allowed in the Export
processing Zones:
Category (a): 100 percent foreign investment including those
of non-resident Bangladeshis: Under this category, foreign investors should
bear all costs including construction, purchase of raw materials and the total
working capital only with their own sources of foreign exchange.
Category (b): Joint ventures of foreign and local investors:
Under this type of investment, project expenses should be borne in accordance
with the partnership agreement but the costs of importing all sorts of
machinery should be borne by foreign partners.
Category (c): 100
percent investment of Bangladeshi investors living in Bangladesh: Under this
category, all project expenses including the import of machinery should be
borne from the investor’s own resources, supplier’s credit, non-expatriable
foreign exchange, pay-as-you-earn scheme or any other acceptable system.
Chapter 17
Industrial Technology
17.1
One of the foremost objectives of the Industrial
Policy 2005 is to help attain competitive efficiency by developing technology,
reduce consumers’ costs by using cost-effective technology, and assist in the
development of an environmentally friendly industrial production system.
Converted efforts will be made in order for entrepreneurs to boost their profit
with the help of improved management and production technology.
17.2
Assistance will be provided in the use of new
technology in order to substitute for imports or expand exports in prioritized
sectors.
17.3
Licensing process will be simplified in respect of
imported, adapted or domestic technology.
17.4
A subsidiary corporate culture will be established in
order to create a team of workers consistent with planned human resources
development and changing technology.
17.5
Approved research and development expenses will
receive tax holiday. Fruitful contacts will be arranged between various
research institutions and related industrial enterprises so that research
results can be utilized for the benefit of all concerned.
Chapter 18
Technical and Institutional
Assistance
18.1
Assistance will be taken from a number of specialized
public and private institutions to generate and sustain competition in the
industrial sector. These institutions will be strengthened gradually so that
they can play an effective role in the country’s industrialization.
18.2
Development of sub-contracting: The policy of linkage
between heavy, medium, small and cottage industries will be pursued in such a
way that small and cottage industries can work as “sub-contractors” of
comparatively bigger industries. Incentives will be given so that big
industries manufacture and assemble basic goods and small industries produce
accessories.
18.3
Efficiency enhancement: Attempts will be made to
develop the efficiency of workers, technicians and employees in the public and
private sectors. A public institution named National Productivity Organization
is working to this end. Apart from this, universities and training
organizations/institutions will be used for this purpose. In-service training courses will also be
arranged for workers to enhance their efficiency.
18.4
Quality control: Manufactured goods must have an
acceptable quality in order for them to sustain demand in domestic and foreign
markets. So, all manufacturers of industrial goods must strictly follow a
quality control system. The Bangladesh Standards and Testing Institution (BSTI)
and some other quality control institutions are carrying out their task in this
regard. BSTI, corporate organizations and other quality control institutions
will jointly develop a system to provide International Standard
Organization-ISO certificates (specially the ISO 9000) for Bangladeshi goods
and services. Initiatives will also be taken to establish an accreditation
body.
18.5
Advising on investment matters and management
training: Approving authorities such as the Board of Investment, BEPZA and
BSCIC provide domestic and foreign investors in the private sector with
pre-investment and post-investment guidance and services. To this end, the
advisory and training facilities of the Small and Cottage Industries Training
Institute (SCITI) and the Bangladesh Management Institute (BIM) will be further
developed and expanded.
18.6
Environmental pollution control: The Environmental
Protection Act 1995 and other relevant legislation are gradually implemented to
control environmental pollution. Those industries that pollute the environment
and endanger public health must ensure safety measures in respect of
environmental pollution control. Industrial enterprises will be encouraged to
obtain ISO-14000 certificates.
18.7
Capital market development: The Securities and
Exchange Commission will draw up and carry out relevant legislation in order to
mobilize market-oriented capital.
18.8
Recognition of industrial development: A new category
will be added to the Independence Day Award to recognize the special
contribution of entrepreneurs to the industrial sector. Successful
entrepreneurs of the industrial sector will be treated as CIPs (Commercially
Important Persons) at an increasing number. In order to provide incentives to
non-resident Bangladeshi investors, 5 to 10 important non-resident Bangladeshis
will be selected every year.
18.9
An all-out effort will be made to encourage the
production of diversified jute goods and the diverse use of jute. The Jute
Diversification Promotion Center (JDPC) under the Ministry of Jute will provide
interested investors with all sorts of information assistance.
Chapter 19
Implementation, Monitoring and
Review
19.1
All public agencies will follow the Industrial Policy
2005. This policy will be implemented properly and monitored regularly, and
necessary changes will be brought about consistent with the needs of economic
development.
19.2
The Industrial Policy has upheld the present
environment of industrial development by following existing laws and other
policies. In line with the Industrial Policy, concerned public agencies will
review their rules and regulations, and amend them, if necessary. Apart from
this, powerful new committees will be formed to implement this policy.
19.3 The special activities that will be undertaken to implement the
Industrial Policy are as follows:
(a)
In order to remain consistent with the objectives and
strategy of the Industrial Policy 2005, necessary amendments will be brought
about to the Board of Investment Act 1989, Foreign Investment (Development and
Preservation) Act 1980 and other relevant legislation. If this policy
contravenes any prevalent rules/legislation, the present rules/legislation will
remain valid until an amendment is brought about.
(b)
A new set of policy entitled “Productivity Policy”
will be formulated under the Industrial Policy 2005.
(c)
Necessary action will be taken to update the relevant
legislation and principles so that the standards of industrial goods are
monitored and improved and consumer interests are safeguarded.
(d)
If there are ambiguities or difficulties in respect of
application of rules, regulations, ordinances and laws for industrialization,
the Ministry of Industries will take steps to alleviate them in cooperation
with various trade bodies and the Law Commission.
19.4 The Productivity Development Program should be declared and
accepted as a national movement.
19.5
From now on, the month of January will be observed as
a ‘productivity month’ every year.
19.5
In order to properly monitor and administer the
Industrial Policy 2005, an Information Management Service (MIS) will be set up
in the Ministry of Industries.
19.7 The National Council for Industrial Development (NCID) undertakes
various development programs aiming at establishing countrywide small, medium
and heavy industries at a massive scale. The Prime Minister of the People’s
Republic of Bangladesh is its Chairperson and the Minister for Industries is
its Vice Chairman. The Council will also comprise the following:
(1)
The Ministers for Finance, Commerce, Power and Energy,
Agriculture, Textiles and Jute, Environment and Forest, Post and
Telecommunication, Science and ICT, Labor and Employment, Civil Aviation and
Tourism, Expatriate Welfare and Foreign Employment, Women and Children, and
Fisheries and Livestock, and the Deputy Minister for Industries
(2)
Chairman, the Privatization Commission
(3)
A Member of Parliament from each of the administrative
divisions
(4)
Governor, the Bangladesh Bank
(5)
Secretaries of the relevant Ministries/Divisions
(Finance, Industries, Commerce, Planning, ERD, Power and Energy, Textiles and
Jute, Post and Telecommunication, Science and ICT, Labor and Employment)
(6)
Members of the Industries and Energy Divisions of the
Planning Commission
(7)
Executive Chairman, the Board of Investment
(8)
Chairman, the Tariff Commission
(9)
Chairman, the Bangladesh Small and cottage Industries
Corporation
(10)
Executive Chairman, the Bangladesh Export Processing
Zone Authority
(11)
Presidents of the FBCCI, DCCI, MCCI, BCI, FICCI, CCCI,
NASCIB, BGMEA, BTMA, and BJMA
(12)
President, the Bangladesh Employers’ Federation
(13)
Chairperson, the Women Entrepreneurs’ Association
(14)
Government nominated five distinguished industrialists
The Council will
meet once every six months, and the Ministry of Industries will provide the
Council with secretarial assistance.
19.8
An Overall Guidelines Committee has been proposed in
the Industrial Policy 2005 under the supervision of the Ministry of Industries.
The objective is to provide entrepreneurs with information-based advice and
overall assistance in the interest of planned and proper industrialization in
the country and also to provide necessary recommendations and assistance to
public and private industries by coordinating with relevant Ministries and
agencies so that their problems are minimized. The committee will comprise as
follows:
(1) Minister, Ministry of Industries
Convener
(2) Chairman, Privatization
Commission Member
(3) Principal Secretary, Prime
Minister’s Office Member
(4) Governor, Bangladesh Bank Member
(5) Secretary, Planning Commission Member
(6) Secretary, Finance Division,
Ministry of Finance Member
(7) Secretary, Ministry of
Industries Member
(8) Secretary, Ministry of Commerce Member
(9) Secretary, Internal Resources
Division and Chairman, NBR Member
(10) Secretary, Ministry of
Agriculture Member
(11) Secretary, Ministry of
Fisheries and Livestock Member
(12) Secretary, Ministry of Science
and ICT Member
(13) Secretary, Ministry of Textiles
and Jute Member
(14) Executive Chairman, Board of
Investment Member
(15) Executive Chairman, BEPZA Member
(16) President, FBCCI Member
(17) President, NASCIB Member
(18) Chairperson, Women
Entrepreneurs’ Association Member
(19) Additional Secretary, Ministry
of Industries Member-Secretary
The Committee will
get together at least once every three months.
19.9 The following sub-committee will submit to
the Committee a report with specific recommendations on the profitability and
probable risks of industrial enterprises to be set up and the scope and
facilities of items produced in the local export market so that suitable
programs can be undertaken to set up industrial enterprises:
(1) Secretary,
Ministry of Industries Convener
(2) Secretary,
Ministry of Commerce Member
(3) Chairman,
National Board of Revenue Member
(4) Member
(Industry), Planning Commission Member
(5) Secretary,
Ministry of Textiles and Jute Member
(6) Executive
Chairman, Board of Investment Member
(7) A Deputy
Governor level representative from Bangladesh Bank Member
(8) A Member level
representative from Privatization Commission Member
(9) Chairman,
BSCIC Member
(10) President,
FBCCI Member
(11) President,
Bangladesh Chamber of Industry Member
(12) President,
BGMEA Member
(13) President,
BJMA Member
(14) President,
BTMA Member
(15) President,
NASCIB Member
(16) Chairperson,
Women Entrepreneurs’ Association Member
(19) Joint
Secretary (Autonomous Bodies), Ministry of Industries Member-Secretary
If
necessary, new members can be coopted in the committee.
Chapter 20
Annexes
Annex
1
Thrust Sectors
- Agro-based
and agro-processing industry
- Textiles
industry
- Jute goods
and jute-mixed goods
- Readymade
garment industry
- Computer
software and ICT goods
- Electronics
- Light
engineering including automobiles
- Pharmaceutical
goods
- Leather and
leather products
- Ceramics
- High fashion
value added RMG
- Artificial
flower production
- Frozen food
- Integrated
shrimp cultivation
- Flower
cultivation
- Infrastructure
- Jewellery and
diamond cutting and polishing
- Oil and gas
- Silkworm and
silk industry
- Stuffed toys
- Tourism
industry
- Basic
chemicals/raw materials used in industries
- Dye and
chemicals used in textiles industry
- Optical frame
- Furniture
- Luggage
fashion-based goods
- Cosmetics and
toiletries
- CR coil
- Handicrafts
- Stationery
goods
- Herbal
medicines
- Commercial
plantation
- Horticulture
Annex 2
In recent times, the
boundaries of the industrial manufacturing sector have been stretched to cover
the transport (?) sector nationally important activities that include many
service sectors. For instance, agro-based and agro-processing industry;
fishing, fish processing and marketing; horticulture, flower cultivation and
marketing; food crops and oilseeds processing; and post-harvest processing of
jute have been brought within the industrial sector. Similarly, tourism
industry, hotel management, telecommunication, computer software and
programming under ICT, e-commerce, digital network and alliance are all
considered service industries in the context of today’s competitive world,
Likewise, transport and communication, construction, housing, furniture, forest
industry, and cinema and DVD for entertainment are also considered industries.
Meanwhile, in the industrially developed world, the printing presses, ginning
and baling, construction business, photography, laboratory, warehouse, cold
storage and container services are currently being considered service
industries. Given this background, the list of service industries has been
drawn up as follows in the present Industrial Policy of Bangladesh:
Service industries
- Hospitals and clinics
- IT-based activities
- Agro-based activities such as fishing, fish preservation and
marketing
- Telecommunication
- Transport and communication
- Forestry and furniture
- Construction industry and housing
- Construction business
- Entertainment
- Photography
- Hotel and tourism
- Warehouse and container service
- Printing and packaging
- Ginning and baling
- Laboratory
- Cold storage
- Horticulture, flower cultivation and flower marketing
- Food crop and oilseed processing
- Knowledge society with high quality merit and efficiency
Annex 3
Reserved Industries
- Arms and
ammunitions and other military equipments and machineries
- Nuclear power
- Security
printing and minting
- Afforestation
and Mechanized Extraction within the boundary of reserved forest
Annex 4
Investment indicators
(1)
Average rate of return method: The average production
rate system is an important indicator in project investment. In this system,
production activities can be undertaken after review and evaluation of average
project production and average project costs. Entrepreneurs can properly follow
this indicator while investing their capitals.
(2)
Payback method of investment: This method means an
opportunity for obtaining payback through an efficient use of the primarily
invested money for a certain period of time. By using this method, investors
can ensure the return of their primarily invested money on a short-term basis.
Entrepreneurs can pursue this indicator while investing their money in the
country.
(3)
Discount payback method: This method means a return or
profit by deducting the present value of invested amount from that of the value
of the amount to be obtained in the future. By using this method investors can
have an opportunity to use their money in an efficient and profitable way.
Entrepreneurs should consider this investment indicator with importance while
investing their capital in setting up industrial enterprises.
(4)
Internal rate of return method: The cost-benefit ratio
is an important tactic in the fruitful and effective evaluation and review of
the establishment of industrial enterprises and their efficient running and in
determining how much the investment flow is going favourable. The internal rate
of return method is an investment method which helps to obtain a forecast of
the degree to which the invested amount is being used in an efficient and
profitable way by examining the cost-benefit ratio. However, the even and
uneven cash flow must be taken into account under the internal rate of return
method. This method is considered the most acceptable method of all investment
indicators.
(5)
Present value method: Each entrepreneur should
carefully consider the profitability index of his invested money while
considering or implementing the present value method because the higher the
profitability index, the greater the return.
Acronyms
|
BCCI |
Bangladesh
Chamber of Commerce and Industry |
|
BCSIR |
Bangladesh
Council of Scientific and Industrial Research |
|
BEPZA |
Bangladesh
Export Processing Zones Authority |
|
BGMEA |
Bangladesh
Garments Manufacturers and Exporters Association |
|
BJMA |
Bangladesh
Jute Mills Association |
|
BITAC |
Bangladesh
Industrial and Technical Assistance Centre |
|
BIM |
Bangladesh
Institute of Management |
|
BMDC |
Bangladesh
Management Development Centre |
|
BMRE |
Balancing,
Modernization, Rehabilitation and Expansion |
|
BOI |
Board of
Investment |
|
BOO |
Build, Own
and Operate |
|
BOT |
Build,
Operate and Transfer |
|
BSCIC |
Bangladesh
Small and Cottage Industries Corporation |
|
BSTI |
Bangladesh
Standards and Testing Institution |
|
BTMA |
Bangladesh
Textile Mills Association |
|
BUET |
Bangladesh
University of Engineering and Technology |
|
CCCI |
Chittagong
Chamber of Commerce and Industries |
|
CIP |
Commercially
Important Person |
|
DCCI |
Dhaka
Chamber of Commerce and Industry |
|
DFI |
Development
Financing Institution |
|
EC-NCID |
Executive
Committee of the National Council of Industrial Development |
|
EOSP |
Employee
Owned Stock Program |
|
EPZ |
Export
Processing Zone |
|
FBCCI |
Federation
of Bangladesh Chambers of Commerce and Industry |
|
FICCI |
Foreign
Investors’ Chamber of Commerce and Industry |
|
FDI |
Foreign
Direct Investment |
|
GAIN |
Global
Alliance of Improved Nutrition |
|
ILO |
International
Labor Organization |
|
IP |
Industrial
Policy |
|
IPO |
Initial
Public Offering |
|
ISO |
International
Standard Organization |
|
L/C |
Letter of
Credit |
|
MCCI |
Metropolitan
Chamber of Commerce and Industry |
|
MIS |
Management
Information Service |
|
MOST |
Micro
Nutrient Statistics and Technology |
|
NASCIB |
National
Association of Small and Cottage Industries, Bangladesh |
|
NBR |
National
Board of Revenue |
|
NCID |
National
Council of Industrial Development |
|
NFCD |
Non-Resident
Foreign Currency Deposit |
|
NPO |
National
Productivity Organization |
|
NRB |
Non-Resident
Bangladeshi |
|
PAYE |
Pay As You
Earn |
|
PSI |
Pre-Shipment
Inspection |
|
R&D |
Research
and Development |
|
RMG |
Readymade
Garments |
|
SCI |
Small and
Cottage Industries |
|
SEC |
Securities
and Exchange Commission |
|
SME |
Small and
Medium Enterprises |
|
SOE |
State-Owned
Enterprises |
|
VAT |
Value
Added Tax |