The New Nation - Internet Edition

Syful Islam

Highly potential light engineering industry could not be developed upto expectations due to the lack of necessary actions, stakeholders say.

"The machineries and technologies used in this sector are age old. That's why we cannot produce world class goods," president of Bangladesh Engineering Industry Owners Association (BEIOA) Abdur Razzaque told The New Nation.

He said banks and financial institutions are less interested to invest in this potential sector. Most of the Asian industrialised countries developed their small and medium industries through cluster approach and established well planned industrial park for SMEs, but there is no such initiative from the government in this regard, Razzaque said.

Describing the problems of the sector he said there is no institution to examine standard of goods of the light engineering sector. "It has no common facility centre to ensure use of proper raw materials."

Razzaque said a total of 40,000 engineering industries are producing capital machineries, machinery parts and providing repairing service whose yearly financial value is Tk 20,000 crore. Around 20 lakh people are earning their livelihood from this sector.

According to him, the government has imposed Value Added Tax (VAT) on repair servicing of light industries sector in budget of fiscal year 2008-09 which has become a burden for the sector.

To help develop the sector the government can arrange bank loan at low rate of interest. To this affect the government can create an Equity Entrepreneurship Fund (EEF) of Tk 100 crore like the funds created for agriculture and ICT industries in the past, he said.

Transfer of modern technology has become very much crucial for the industry, said Razzaque adding government should provide fund in this regard arranging it through SME Foundation.

A time-bound action plan should be taken to develop the very potential sector which in the long run can be a big source of foreign currency earning, he said. Stakeholders said until today most of the products of light engineering industry are being utilised locally. But export earnings from the sector are increasing gradually. In FY 2008-09 light engineering goods worth US$ 189.48 million were exported against US219.68 million in FY 2007-08, US$ 237 million in FY 2006-07 and US$126 million in FY 2005-06.