Industrial policy sees major changes - Cabinet committee to scrutinise the draft today

The new industrial policy with a major shift in divestment strategy will be placed in today's meeting of the cabinet committee on economic affairs for its perusal.

The policy, drafted after four years, also envisages a stimulus package for special economic zones and enhanced foreign direct investment benefits.

Industries ministry officials said the new policy will put emphasis on SoE (state-owned enterprises) reforms and public-private partnership (PPP) initiatives, signalling a massive shift from the 2005 policy for the industrial sector.

According to the draft policy, regulated industrial units will require approval from the government, as those are specialised ones. Such regulated industries include fishing in the deep sea, bank and non-bank financial institutions and insurers in the private sector, power generation projects, natural gas exploration industry, extraction of coal and other natural mineral resources, big infrastructure projects like fly-over, elevated expressway, monorail etc, crude oil refinery, medium and big industries using natural gas, satellite channels and cargo and passenger planes.

It will also identify industrially-lagged areas besides the advanced ones, in order to give those a benefit of reduced tariffs on imported capital machinery. Officials said as many as 51 districts will be entitled to such facilities to accelerate industrialisation.

The government targets this time making the losing SoEs profitable ones instead of divesting those, they pointed out. Also, placing those under private management or utilising better technologies are some other options the government is considering.

Even foreign entrepreneurs might be invited to run those loss-making state enterprises, or shares be offloaded to make it sure that those stay competitive.

In reforming those, staff will be offered competitive compensation packages and quality products be more focused, and the produced commodity would be made competitive.

The government is now considering enacting a law to set up economic zones for export and local market oriented industries in a good number of areas across the country. The new law will allow establishment of no other export processing zone or industrial estate.

The institutional and regulatory framework for such zones will design its fiscal and other stimulus packages by this year.

In setting up industrial parks, implementation of One District One Product will be taken into consideration.

Industries cannot be set up using agricultural land, cutting hills and hillocks, by filling rivers, canals or any other natural water bodies. Relocation of the pollution-prone industries in metropolitan areas to these zones has also been envisaged in the new draft policy.

Any industry detrimental to national security, culture and economy will not get any permission to set up.

To encourage FDI, foreigners will be given five-year multiple visas instead of a three-year multiple visa.

Citizenship might be considered for any foreign national who invests $5 lakh or transfer $1 million to any recognised financial institution.

The amount the existing law allows a foreigner to invest has also been raised by the draft industrial policy to $1 lakh from $75,000 in case of awarding permanent residentship to any.

The policy has cut the number of thrust sectors down to 28 from 33.

Source: The Daily Star

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