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SCMP Reporter

SMALL and cottage industries have a significant role, not only in the economy of Bangladesh, but also in any developing economy trying for sustainable development through the mass participation of its people.

    There are about 38,000 small and 400,000 cottage industries (excluding handlooms) in the country.

  With the addition of handlooms the total number of small and cottage industries will be about 700,000.

  This sub-sector constitutes about half of the total industries sector contribution of 10 per cent to the Gross Domestic Product (GDP).

  This sector employs about five million people, which accounts for 83 per cent of the total industrial labour force. So, in terms of its size and employment, it is quite significant for a developing economy such as Bangladesh.

  Moreover, compared to large and medium industries, small and cottage industries have many other inherent advantages which make this sector more significant in the country's economic development process.

    The newly elected democratic Bangladesh Government has put an emphasis on the development of small and cottage industries in its policy framework.

  In the 1991 industrial policy, a firm commitment was made to encourage the development of such industries and a number of provisions have been made to achieve that objective. It forms one of the five basic objectives of the industrial policy.

   The basic promise of the government's economic development policy is to bring about socio-economic emancipation of the masses and achieve self-reliance through the involvement of people in productive activities.

  The elaboration of this promise is to achieve economic growth through the creation of employment opportunities, reduction of income inequality and alleviation of poverty.

  The declared commitment of the new industrial policy is to encourage the development of this sector and is relevant to the above promise.

    In the new industrial policy, the area and scope of the industrial sector has been expanded significantly.

  Previously, technology-based fisheries, livestock and other farm-based activities, such as mushroom culture, were not considered industrial concerns.

   The new policy provisions have been made to encourage the expansion of agro-supporting industries. Incentives applicable for small and cottage industries will also be provided for such industries.

    In the strategies of the industrial policy it has been stated that the growth of linkage and sub-contracting industries, which are labour-intensive, will be encouraged.

 In recent years, sub-contracting linkage programmes between small, medium and large industries has been expanded.

   The Bangladesh Small and Cottage Industries Corporation (BSCIC) has been entrusted with the responsibility of their promotion and it has been implementing an extended programme of developing sub-contracting industries.

    Another main feature of the new industrial policy is the elimination of the discouraged list. This will encourage both large and small scale entrepreneurs to apply for new investment. But a provision has been kept to regulate some of the industries, ifnecessary, to protect the environment, public health and national interest.

   Under the new industrial policy several organisations have been declared independent sponsors by the administrative authority.

    With this new introduction, the BSCIC could provide similar facilities to that of the Export Processing Zone (EPZ) to encourage provisions for the small and cottage industries entrepreneurs of the country.

    Under the new industrial policy, the sanctioning procedure for industrial enterprises has been made simpler and less time consuming.

    In the case of importing industrial raw and packaging materials, pass books will be issued by the sponsoring agencies to entrepreneurs within 30 days of receiving applications.

   Similarly, an import registration certificate will be issued by the concerned authority in favour of the industrial enterprise within 30 days of receiving applications.

    It is hoped that the simplification of sanctioning and other procedures will attract prospective entrepreneurs to invest in industries, particularly in the small and cottage industries sector.

    According to the new policy, the BSCIC is now also the sponsoring authority for investment in the sector. The entrepreneurs of the country may come forward with joint-venture projects using foreign investment and can use the services of the BSCIC.

     Under the new industrial policy, emphasis has been given to monitoring the industrialisation programme, development of skills research and development, quality control, sectoral studies, technology evaluation and transfer, environmental pollution control, identification and development of capital markets. It is hoped that this will help expedite the industrialisation process.



Small industries a key to growth