A new industrial policy is in the offing with its major focus on encouraging promotion of a high-priority industrial sector with the aim of giving an impetus to public-private partnership (PPP) to help spur the country's economic growth.
The cabinet committee on economic affairs is expected to give its nod to the National Industrial Policy-2016 in its next meeting. Notable priority areas in the newly-drafted policy, as the reports said, are ship-building, pharmaceuticals, small and medium enterprises (SMEs), handicrafts, intellectual property rights (IPR)-related ventures and industrial waste management operations under a specific time-bound action plan.
A change in the Industrial Policy-2010 has been under consideration of the government, in view of its major emphasis then on only manufacturing ventures. Furthermore, that policy does not adequately meet the needs for growth of services sector and industrial cluster development. Also, it does not take a proper note of competition policy and emerging sectors like shipbuilding, electronics etc.
Although there is a provision to set up more industries in the rural areas, there has yet been no noteworthy growth of such units there. As of now, applications of over 8,000 entrepreneurs are waiting over the last few years to get power supplies for setting up rural industries. This does not conform to the government's commitment to promoting rural industrialisation for narrowing the urban-rural disparities. Such a commitment has thus remained unfulfilled largely on account of lack of arrangements for uninterrupted, adequate power supply in rural areas.
The country's actual power generation is not adequate yet to meet the demand for setting up industries in villages. Until 2015, the government followed a go-slow policy about providing new power connections. Such connections were given in a haphazard way, attaching no priority to those seeking power supplies for all industrial units. In the relatively backward northern districts, 5,410 pending applications piled up since 2007 seeking such power connections.
However, the new policy, as the reports said, attaches priority to setting up labour-intensive industries in the remote areas with a view to creating additional employment opportunities. Some realistic measures have thus been incorporated in it to help expand the country's small and medium enterprise (SME) sector. Besides, the target is being set under the policy to raise the share of industrial sector to 40-45 per cent of the country's gross domestic product (GDP).
The policy has been drafted, reportedly in line with the government's Vision 2021, the Perspective Plan (2010-2021), Seventh Five-Year Plan for the period between fiscal year (FY) 2015-16 and FY 1990-20, Fourth Istanbul Programme of Action (2011-2020) and UN Sustainable Development Goals or SDGs (2015-2030).
The new policy, drawn up in the light of valuable inputs coming from various stakeholder groups, is, according to reports, purported to accelerating the pace of the country's industrial growth process.
Under the earlier Sixth-Five Year Plan (SFYP), the investment requirements for infrastructure were projected to rise from 3.0 per cent of GDP in FY 2010-11 to 7.0 per cent in FY 2014-15. Such investments did actually increase to 5.0 per cent in FY 2014-15.
In this context, the Seventh Five Year Plan has set the target for the country's industrial growth rate at 11.85 per cent by its terminal year, i.e., FY 2019-20, rising from 9.60 per cent in FY 2014-15. The overall GDP growth rate of the economy under this plan has been projected at 8.0 per cent by FY 2019-20, against 6.5 per cent achieved in FY 2014-15. This growth rate, according to analysts, is attainable, provided necessary supporting reforms and policies are put in place.
The country's industrial development depends on multiple factors relating to business environment. All such factors do not concern any particular ministry or agency of the government. One may cite here the case for developing industrial clusters. For this, it is critically important to ensure supplies of electricity, gas and water. Facilities for roads, ensuring security, availability of technology and raw materials and other support services etc., are also relevant here. All these require close coordination among the concerned departments or agencies.
Earlier, industrial policies were framed mainly from macroeconomic perspectives without taking distinctive strategies or any specific action plan or timeframe, into a proper account. If such policies did have the microeconomic approach along with specific timeframes and effective coordinated efforts among the agencies responsible for doing all the needful, these could have been executed in a better way.
In order to get optimum results from an industrial policy, a good number of stockholders have suggested for enactment of a comprehensive law and its effective implementation. The act, as they note, may be named Industrial Development Act of Bangladesh. All the relevant policy-related aspects can be addressed in separate chapters of the Act. The Act can also have both macroeconomic and microeconomic versions with time-bound duties and responsibilities of all concerned agencies of the government.
In this context, SME development, low-cost labour-intensive industries, import-substituting industries, cluster-based SME development, maximum value-addition products, export-oriented industries, next generation business enterprises etc., should be considered the main pillars of such an Act.
A special secretariat under the supervision of the Prime Minister as analysts say, can take the lead in ensuring coordination among the relevant organisations, agencies and ministries to implement the proposed industrial development act. A strong monitoring and evaluation team can also be constituted to ensure transparency in implementing each component of the proposed Act by the organisations concerned, following pre-determined time-frames.
Because such an Act is expected to prevail over any other conflicting ones, all government agencies will be bound to implement it on a priority basis. Then the prime objectives of industrialisation can be achieved. Without comprehensive and coordinated efforts, the overriding national goal of becoming an industrialised nation sooner rather than later will be well-nigh impossible to accomplish.