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):