A large number of plots in various industrial estates of the Bangladesh Small and Cottage Industries Corporation (BSCIC) are lying unused — according to some accounts there as many as 549 such plots — as the owners of these land parcels failed to set up plants within the stipulated time period.
According to industry people, non-use of the plots is depriving the Government of valuable revenue, people of job the opportunities, and the real small and medium enterprises (SMEs) of serviced land to set up business, which gains even more significance in light of the ongoing Coronavirus pandemic and Bangladesh’s efforts at trying to bring the economy out of the woods.
According to some estimates, in Bangladesh, SMEs account for 25 per cent of the GDP, 80 per cent of the total industrial employment and 25 per cent of the labour force even as according to the International Labour Organisation or ILO, the Coronavirus pandemic has posed question mark on the existence of 2.5 million SMEs in the country.
It is not for nothing that the SME sector is frequently referred to as the backbone of the economy by various experts and economists.
Currently, there is a big network of 7.81 million SME units in Bangladesh even as the Finance Minister, in his budget speech last June, also mentioned: “The Government is putting all its endeavours to enhance the contribution of this sector to 32 per cent by 2024.”
The underlying importance of the sector is also reflected in the development policies. For instance, the Eight Five-Year Plan (8FYP), mooted in the current fiscal year (FY ’21), has emphasised the advancement of SME sector arguing that small and medium enterprises ‘are playing a major role in the economy of Bangladesh, particularly in rural economy’. It also pointed out that ‘most of the SMEs could not make significant success due to many difficulties such as lack of necessary funds, local level technology, patronisation etc’.
Further, as was expected, the proposed budget for 2021-22 fiscal year has also put a lot of focus on the SME sector, to ensure the sector could play its due role to bring the economy back on its track again, which even led the SME Foundation of the country to term the proposed budget ‘SME friendly’.
“This year, the budget has become business-friendly, more specifically SME-friendly, because the corporate tax rate for non-listed companies has been decreased from 32.5 per cent to 30 per cent,” said Dr Md Mafizur Rahman, Managing Director of SME Foundation, who went on to add the advance tax on raw materials imported by the industrial entrepreneurs of Bangladesh has been decreased from 4 per cent to 3 per cent, while to protect the small and medium enterprises’ interests, in some cases, duties and taxes on imports of finished products have also been increased even as women entrepreneurs are getting more income tax exemptions as the tax-free income limit for women entrepreneurs has been increased from the current Taka 50 lakh to Taka 70 lakh, which will benefit the SME entrepreneurs.
In short, this year’s budget is SME friendly, he said while adding that 14 of the 63 proposals put forth by the SME Foundation for the revival of the sector, and consequently the overall economy, have been accepted and incorporated in the proposed budget even as he went on to add that the importance of small and medium enterprises, especially in the sectors that are doing well now, has been taken care of in the budget.
Given the role and importance of the sector in the economic revival of the country, it is nothing short of cardinal sin to deprive the real, well-intended and ambitious small and medium enterprises from setting up their businesses, just because of misuse of serviced land.
It may be mentioned here that as per rules, a factory must be built within 18 months after securing the allotment of a plot. But many leasees have not set up factories as per their plans within the stipulated time, as per an official of the BSCIC.
Established by an Act of the Parliament in 1957, the Bangladesh Small and Cottage Industries Corporation or BSIC is the prime organisation in Bangladesh to support industrialisation process through creation of an entrepreneurial society with its vision to accelerate the industrial growth through promotion and extension of medium, small and cottage industries even as its development activities are motioned, catalysed and supported by promotion and extension services to the SMEs.
According to reports, currently there are around 10,922 plots in 76 industrial estates of the BSCIC across Bangladesh, of which, 10,379 plots have been distributed so far even as 4,570 factories are in production at present, of which 901 are export-oriented.
The highest number of unused plots though is reportedly in the Barisal industrial estate, which is at 48, followed by Bhola estate with 32 vacant plots, 29 plots are not in use in Shariatpur, 28 in Rangamati, 27 in Noakhali, 22 in Netrokona, 20 in Meherpur, and 32 in the leather estate in Savar.
Meanwhile, speaking to the media, BSCIC Chairman Md Mostaque Hassan underlined it has taken strong steps against the leasees who had left the plots unused after getting allotment.
“It cannot go on like this. Work is underway to lease out these plots anew…Many entrepreneurs have shown interest. Now, the plots will be handed to the real entrepreneurs so that industries can be set up there,” claimed the BSCIC Chairman even as some officials of the organisation maintained that there is a tendency among some entrepreneurs to not stick to the plans cited in their proposals and instead, to set up factories as per their wish.
And when they cannot do so, they leave the plots deserted, claimed an official of BSCIC seeking anonymity, who added that after receiving proposals from the applicants, the BSCIC carries out feasibility studies before awarding the plots and if anyone does not build the factory within the deadline, the allotment can be cancelled.
We also cancelled allotments in the past, claimed Deputy General Manager of the industrial estate division at the BSCIC, Nasrin Rahim.
As per reports, each plot is leased out for 99 years and entrepreneurs can pay the full amount of the lease price in a single payment even as they have the option to pay the same in 10 instalments in five years as well.
As far as Rangamati industrial estate is concerned, many entrepreneurs reportedly do not want to build factories there because of absence of a good communication system even as BSCIC officials claimed it had prepared the plots in the hilly areas through proper planning and as such they should not have remained unused.
There are reportedly around 543 plots in the industrial estates across the country that are yet to be awarded, of which 367 are ready to be allotted even as reports suggest the factories at the BSCIC estates are currently employing more than 67 lakh people and a total of Taka 63,318 crore have so far been invested and some 112 industrial units, which were earlier sick, have reopened since the beginning of the current fiscal year.
Given the existing scenario, where the SMEs can play a pivotal role in bringing the economy out of the Covid-induced glut while also make way for large-scale employment, the Government apart from providing policy and fiscal support, would do good to make sure that the large number of plots in various industrial estates of the country that are still unutilised, owing to owners of these land parcels failing to set up plants within the stipulated timeframe, should reallocate these services plots to well-meaning and genuine SMEs so to try and speed up the economic recovery process further.
