The Small and Medium Enterprise (SME) Foundation has proposed to change the definitions of the micro, cottage, small, medium, and large enterprises based on their fixed assets.
They made the proposal while saying that it will ensure the SME entrepreneurs of the country upscale their position by partaking in better access to government policy support and adequate assistance from development partners.
In this regard, the SME Foundation has sent their proposals to the Ministry of Industries to redefine the CMSMEs in the National Industrial Policy 2021, which will replace the earlier Industrial Policy 2016.
Md Mafizur Rahman, managing director of the SME Foundation, signed the proposal sent to the ministry.
According to the proposal, an enterprise in the manufacturing sector should be characterized as a medium industry if the value of its fixed assets except land and buildings is more than Tk10 crore but less than Tk30 crore.
Moreover, when the fixed assets of an enterprise are worth Tk30 crore or above, this should be branded as large industries, said the proposal.
However, the existing industrial policy said that a manufacturing unit is considered a medium enterprise if the value of its fixed assets except land and buildings is less than Tk50 crore.
The proposal also said that an enterprise should be characterized as a small industry if the value of its fixed assets except land and buildings is more than Tk50 lakh but less than Tk10 crore.
While it is less than Tk50 lakh with 25 employees, it should be regarded as a micro-industry and if it is a family enterprise with a fixed asset of maximum Tk10 lakh, it should be regarded as a cottage industry, the proposal added.
Industry insiders said that due to the complexities of the existing definition, a number of large enterprises are now categorized as medium and they are enjoying policy support and incentives meant for small and medium enterprises only.
However, due to the lack of competitiveness, capacity, and proper documentation, the SMEs fail to get access to the policy support compared to their larger peers, they also said.
According to the proposal, along with Bangladesh Bank, Bangladesh Small and Cottage Industries Corporation (BSCIC), FBCCI, ten government and private stakeholders have also given a similar opinion on redefining and revising the definitions of CMSMEs based on fixed assets.
They proposed to categorize the industry scale based on annual turnover, where the industry will be labelled as large if its turnover is more than Tk50 crore with employees of more than 250.
The industry will be branded as medium with a turnover of Tk20 crore-Tk50 crore with 101-250 employees, characterized as small with a turnover of Tk2 crore-Tk20 crore with 26-100 employees, and as a cottage with a turnover of highest Tk2 crore and highest 25 employees.
Meanwhile, the central bank has agreed to the categorization of the SME Foundation to label an enterprise as a large industry if its annual turnover is more than Tk30 crore.
However, the BSCIC has expressed its position against the classification of industries based on both annual turnover and manpower.
The National Industrial Policy broadly defines industries in four categories – micro, small, medium and large.
The Industrial Policy 2016 included manufacturing and service sectors in each category and the SME Foundation and the BSCIC have proposed to include the trading sector in the manufacturing sector in the new industrial policy.
According to the economic survey conducted by the BBS, more than 99% of the country's businesses are under the CMSME sector - employing 7.8 million – which is 80% to 85% of the total industrial employment of the country.
Currently, the SME sector is contributing around 25-27% to the national GDP and aims to increase the contribution to 32% by the year 2024.