Incentives should be time-bound so industries can be self-reliant
Giving entrepreneurs a subsidy on capital investment for setting up import substitution industries and offering them various incentives are definitely important to replace foreign imports with domestic production. But it is often seen that many incentive-recipient factories refrain from becoming self-reliant for continuation of such a benefit.
So, there should be a mention of specific time while giving incentives to such industries. They have to achieve self-reliance within the stipulated time.
It is also a very good initiative to recommend incentives and depreciation benefits for establishing industries in many districts, which are considered as underdeveloped. If industries are set up in those areas, the country will have inclusive development. But we have to consider whether it is wise to mention 45 districts as backward.
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The most important thing in developing import substitution industries with incentives is to do standard maintenance – the environment needs to be given first priority. We have to make sure that factories are in compliance with the global rules and that products manufactured comply with the global standards.
If import dependence drops with the establishment of import substitution industries, we will have to ensure that consumers get products at fair prices.
Another thing is that we should not offer so many benefits to local companies that lead to discrimination and subsequent loss of market competition. We need to ensure equal opportunities for all.
Giving incentives to the industrial sector often puts an impact on the government's budget. Revenue collection suffers a setback too, resulting in a halt to development work. So, we should ponder on the consequences before giving incentives.
Dr Mohammad Abdur Razzaque spoke to TBS Senior Correspondent Abbas Uddin Noyon over the phone.
