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India: ‘Priority Sector’ Light Engineering Fails to Flourish |
| Source: |
newagebd.com |
| Source Date: |
Sunday, August 26, 2012 |
| Focus: |
ICT for MDGs
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| Country: |
India |
| Created: |
Aug 28, 2012 |
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A file photo shows an employee wielding an iron frame at a factory in Dhaka. The light engineering sector, which has got a huge potential, has failed to flourish due to the lack of an effective policy, financial support and upgraded technology, say entrepreneurs. New Age photo—The light engineering sector, which has got a huge potential, has failed to flourish due to the lack of an effective policy, financial support and upgraded technology, say entrepreneurs.
The experts and entrepreneurs say that light engineering factories are struggling because of the shortage of capital, strict conditions imposed by the banks for loans and shortage of skilled workers. The government declared the light engineering a ‘priority’ sector in its Export Policy 2010 and a ‘thrust’ sector in its Industry Policy 2005, but none of the successive governments took effective action to help the sector to flourish, said Abul Hashim, owner of Nipun Engineering. The banks charge small businesses high interest rates of 16 to 17 per cent and are also unwilling to offer collateral-free loans although the sector belongs to the Small and Medium Enterprise category, said the Nipun’s owner. He said that due to lack of capital and other sorts of support from financial institutions, most of the factories use outdated machines and produce low-quality products. The BRAC Bank’s SME official told New Age that most of the entrepreneurs in the light engineering sector cannot improve the quality of their products and market them through the right channels as they do not have access to information. If these industries cannot upgrade their technology now, they might not survive in the future because of increasing competition in the global market, he said. Saiful Islam, proprietor of Progoti Engineering, said that most of the people working in the sector do not have any formal training.
‘They have learnt the trade simply by working,’ he said, adding that proper training is sure to improve their productivity. To promote this sector the Bangladesh Institute of Technical Assistance Centre provides some materials and training for light engineering industries but these are not sufficient, said the BITAC’s director, Syed M Ehsanul Karim. Students of BITAC or polytechnic institutes are not interested in working in the light engineering sector because of lack of job security or technological support, he said.
‘Many industries have machines and tools but the workers are incapable of operating them,’ he said. The Bangladesh Engineering Industry Owners’ Association’s president, Abdur Razzaque, told New Age that ‘the light engineering sector lacks policy support’. He said that about 6,00,000 skilled, semi-skilled and unskilled people are working in about 40,000 light engineering factories throughout Bangladesh.
Razzaque said that small factories are engaged in manufacturing various import-substitute products such as electrical, ceramic, rubber and plastic goods, agricultural machines, machines for the apparel sector, for rice mills and for the paint industry and are helping the country to save a significant amount of foreign currency. They also make spare parts for cars and power looms, and even ammunition boxes for the Bangladesh Army.
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India: ‘Priority Sector’ Light Engineering Fails to Flourish A file photo shows an employee wielding an iron frame at a factory in Dhaka The light engineering sector which has got a huge potential has failed to flourish due to the lack of an effective policy financial support and upgraded technology say entrepreneurs
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