Revisiting The Impact Of Policies And Budgetary Allocation On The Development Of Women Entrepreneurs In Bangladesh

The paper aims to analyze the critical factors of women entrepreneurship development in rural Bangladesh. The analysis is based on recent theoretical ideas that have been supported by empirical research findings. The paper depicts an analytical framework based on institutional theory, which focuses on three kinds of factors: regulative, normative, and cognitive. Regulative factors refer to different rules and regulations of the Government that facilitate women entrepreneurship development in Bangladesh. Normative and cognitive factors include norms, rules, regulation, and values of society. Based on the analysis of these factors, the paper provides many significant policy implications on how to improve women entrepreneurship development in rural Bangladesh.

1. Introduction
It is noticeable that entrepreneurship development and empowerment are complementary to each other. Women empowerment depends on taking part in various development activities. In other words, the involvement of women in various entrepreneurial activities has empowered them in social, economic and cultural fields. The power of and access to taking decisions has increased f or women in Bangladesh, within as well as outside the family. Yet, women entrepreneurship development varies across rural and urban areas. Women account for about one third of all newly started enterprises 1. They are represented in most branches of trade, but mainly in the service sector. The most popular branches of trade among women entrepreneurs are retail trade and repair work, business service, public and personal services, catering and agriculture. There is a difference between womens and mens choi ce of type of business. Women often choose a type of business line among the traditional womens trades, and also the values and priorities of the two sexes are different. More often than male entrepreneurs, woman entrepreneurs give a higher priority to the well being of their family and their children, which creates a conflict between the

values of the enterprise and those of the family. These differences are important in connection with the possibilities and barriers encountered by the women for example regarding financing and decisions on expanding the business. The differences are felt most keenly by the women entrepreneurs who have a family. More women than male entrepreneurs have a family and children. The same applies when a comparison is made with the workforce in general.3 These differences influence the general picture of women entrepreneurs, although the childless women entrepreneurs are more similar to male entrepreneurs in values and priorities.

2. Literature Review
A good number of studies have been done on entrepreneurship in Bangladesh. Habibullah (1987) showed that training is an effective tool for entrepreneurship development in Bangladesh. Rahman, Mian, Bhattacharjee and Khan (1979) critically appraised the impact of different programs and policies relating to entrepreneurship and small enterprises. Habibur Rahman (1995) emphasized the importance of project viability, collateral and entrepreneurial evaluation at the project appraisal level of banks. Saleh (1995) found inadequate cash flows, marketing deficits and discriminating treatment from supportive service agencies to create obstacles to women entrepreneurship development in Bangladesh. Rahman (1999) examines women borrowers involvement with the microcredit program of the Grameen Bank, and the grassroots lending structure of the bank. He focuses on the processes of village-level microcredit operation and addresses the realities of the day-to-day lives of women borrowers and bank workers and explains informant strategies for involving themselves in this microcredit scheme. The study also covers some power dynamics. Aktaruddin (1999) showed that personal attributes are key factors for entrepreneurial success or failure, while Aktaruddin (2000) focused on the social-economic background of the entrepreneurs. Momen and Begum (2006) measured the impact BRACs micro credit program had for the development of rural women entrepreneurship. Afrin, Islam and Ahmed (2008) aimed at identifying the factors related to the development of entrepreneurship among the rural women borrowers through micro credit programs. Using a multivariate analysis, they showed that financial management skills and the group identity of the women borrowers have significant relationship with the development of rural women entrepreneurship in Bangladesh. Most recently, Rotaru (2009) provided a case study on the Bangladesh Women Chamber of Commerce and Industry (BWCCI), which was established in 2001, as the countrys first trade body working exclusively for womens economic and social empowerment.

The aim of this paper is to analyze the critical factors of women entrepreneurship development in Bangladesh. The paper represents two types of such factors; one type can be characterized as facilitating factors, and the other one as stumbling blocking factors. Facilitating factors refer to those factors that ensure women entrepreneurship development, whereas stumbling blocking factors hindrance this development. The paper is structured as follows. The next section summarizes the concept and main features of entrepreneurship. The third section reviews the analytical framework of women entrepreneurship development based on institutional theory. The critical factors of women entrepreneurship development are then analyzed in details in the fourth section. The fifth section provides various policy implications before the last section provides some conclusions.

3. Policies and Programs Affecting Development of Women Entrepreneurship in Bangladesh

The development of women entrepreneurship in Bangladesh is perceived as a low priority. Therefore, it is evident that the policies and programs encouraging and supporting women entrepreneurship are very few. This section attempts at identifying women entrepreneurship related policies and objectives adopted in various national document of Bangladesh. Women entrepreneurship related policies and objectives adopted in various international documents, which the GOB ratifies, have also been identified in this section.

3.1 Women Entrepreneurship Related Policies And Objectives In Various Five Year Plan Of Bangladesh
The importance of women entrepreneurship in Bangladesh has been acknowledged first in her Second Five year Plan (1980-85). It emphasized creating a congenial atmosphere for womens increased participation in development through expanding opportunities for skill development, credit and entrepreneurship development program. The same policies and programs were adopted in the Third Five Year Plan (1985-1990). The Fourth Five Year Plan (1990-95) placed women within the context of macro framework with multi-sectoral thrust. During which women were brought under various credit programs mainly for developing micro entrepreneurship among the poor and disadvantaged women. The gender policies and objectives adopted in the Fifth Five Year Plan (1997-2002) were also supportive of developing entrepreneurships among women of Bangladesh. This includes: ensure womens l egal rights in property inheritance, ensure womens equal right to skill, information, resources and opportunities, promote womens economic self reliance, ensure womens access to managerial training, ensure womens access to credit facilities,

 create appropriate institutional arrangement with necessary financial and human resources and authorities at all levels to mainstream womens concern at all aspects and sectors of development.

3.2 Women Entrepreneurship Related Policies And Objectives In The PRSP

PRSP extensively discusses the gender dimension of poverty and adopted a right-based approach to eliminate gender gap from all spheres of life. The same approach has been adopted for the advancement of women. In this context, PRSP has emphasized the development of women entrepreneurship as one of the means to womens advancement. The PRSP suggested three types of interventions- immediate, short and long run

3.3 Industrial Policy 2009 3.4 Export Promotion Strategy Paper 2006-2009
It declares that it is necessary to reduce the discrimination between men and women, and to integrate more and more women in business development activities. This will result in strengthening our economic base, enabling the producers/exporters to attain more strength and competitive ability to face the challenges of a changing world trading system. To that end number of strategies has been outlined: Promoting labor-intensive (especially female labor) export-oriented production. Encouraging female entrepreneurs in the export sector. Encouraging them invent new production and product diversification. Selecting of female Commercially Important points and Honoring best female entrepreneurs by awarding Annual Export Trophy

3.5 Millennium Development Goals 2000-2015 (Mdgs)

MDGs came as the universal declaration of human rights at the very outset of 20th century and cover the women development issue from the most general poverty eradication and basic human right protection standpoint. The relevant goals that address the women empowerment and SME development issue are: Achieve universal primary education (by 2015 boys & girls alike will complete full course of primary schooling) Promote gender equity and empower women (eliminate gender disparity in primary and secondary by 2005 and in all educational levels by 2015)

Female literacy rate enhancement Employment generation for women (non agricultural sector) Parliamentary positions held by women. Develop a global partnership( in cooperation with the private sector, make available the benefits of new technologies)

3.6 Agricultural Policy

All national policies under the ministries of agricultural sector recognized women as farmers and suggested actions to provide agricultural services. But in reality, women do not get advantages from this policy. Result of a study shows that womens share in the total agricultural inputs supplied by the government institutions is only 14.7%. The same study shows that while men received training mainly in farming, women get training on poultry farming. This finding suggests that women are not considered as farmers . Non-recognition of women as farmers is revealed further when it is found that most of the agricultural loan is provided to men. About one-fifth of the loan taken by women was used by men. Only a little more than 14 % of women use the loan money absolutely themselves. Analysis of the agricultural policy shows that women get negligible facilities in the agricultural sector even though policy is women sensitive. (Choudhuri Zohir 2005) .It is mainly because of the fact that in most cases, women do not own agricultural land. Hence, women-focused policy should be adopted to supply agricultural services.

3.7 Monetary Policy

Monetary policy plays a vital role in facilitating access to credit and availability of credit is an essential condition of developing entrepreneurship. But, no such credit policy in the country is devoted for development of women entrepreneurship. A set of credit arrangements is founded guided by Bangladesh Bank (BB). Where a lot of flexibility has been ensured for running the credit system and women entrepreneurs may get some benefits from these flexibilities. Almost all nationalized banks have women branch aiming at mobilizing savings from women rather than providing loan to women for investment. For this reason, these branches are running at a loss. Some banks like Janata bank have undertaken a policy to provide big loan to women without collateral. But in practice, it has been found that banks often insist women to brin g husbands or other male relatives consent as guarantee before providing loan to women. Krishi bank also has a program to provide Krishi loan to women. But information collected shows that very few women have demanded this

loan. Because of complicated loan giving procedure for less educated women and need for women to have some material base to invest loan. But women lack material base. BASIC bank was established with the mandate to finance small and cottage industries sector. Since its direct lending program could not be so successful, so it is now operating through NGOs in this respect. But, unfortunately, its mandate is not adequately utilized by the lending of NGOs which do not finance small industries or even cottage industries of higher levels. The statistics in respect of this function of BASIC show that out of 237 projects directly funded by the bank in 1998, only two were women entrepreneurship related.

3.8 Women Entrepreneurship International Treaties

Related

Objectives

In

The

Bangladesh is also a signatory of several international treaties regarding womens development. Among these noteworthy are: Convention for the Elimination of all forms of Discrimination Against women (CEDAW) and Platform for Action (PFA), Fourth World Conference on Women, Beijing 1995, are paramount CEDAW has very little to do with the development of women entrepreneurship. However, Article 11 and 13b are conducive to the development of women entrepreneurship. Article 11 of this convention provides for equality of employment and training and also provides free choice of profession. Article 13b provides for womens rights to bank loan, mortgage and other forms of financial facilities. But analysis of various national policies reveals that except NAP, all other national policies have taken these articles into consideration very little. The Fourth World Conference of United Nations on Women Development in Beijing adopted Platform for Action Plan (PFA). Article 12 of this treaty mentions the issue of the equal economic right and opportunities and development of women. It includes the right of the women for credit, which is a basic pre-condition for the development of women entrepreneurship. The government of the Peoples Republic of Bangladesh has adopted the Platform for Action and thus commits to implement the resolution of the PFA. The Ministry of Women and Children Affairs has set up an inter-ministerial Task Force to follow-up the implementation of the resolution of the PFA.

3.9 Policies Of Banks And Other Institutions

A good number of bank personnel mentioned that they faced serious problems in identifying the right type of people with entrepreneurial skill. The responding bank personnel also stated that the problem of identifying the purpose of loans is more serious in the case of small entrepreneurs engaged in agricultural activities and

small business activities. In Bangladesh, a special bank named BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank Limited) had been established in 1988 with the mandate to finance small and cottage industries sector. Their direct lending procedure is operated by NGOs. But unfortunately its mandate is not sufficiently utilized by the lending of NGOs. The banks statistics from 1998 showed that out of 237 projects directly funded by the bank only two were women entrepreneurship related. Generally, financial institutions and banks extend credit for women under micro credit programs for poverty reduction. Based on the cost of the fund, the interest rates of these credits vary. For this purpose mainly donor supported project funds are used. Bangladeshs central bank, the Bangladesh Bank, also provides some funds. The Bangladesh Bank directs the commercial banks to lend at least 15 percent of their lending capital for the industrial sector, while 5 percent are expected to be spent for the small scale industry (SCI) sector. Often development agencies operate these loans. Furthermore, as pointed out by an undated paper by the Dhaka Chamber of Commerce and Industry (DCCI) (p. 10), other than for poverty reduction project loan, there is no special regulation for credit for women entrepreneurs. 2 The overlapping of policies and rules is one of the major constraints faced by branch managers. Several Grameen Bank branch managers stated that different NGOs distribute loans among borrowers with utmost secrecy. In such a situation entrepreneurs may easily divert their loan amounts for some unproductive purposes. Due to such diversion, they are then unable to generate the income for the repayment of the loan and become defaulters (Rahman, Hossain and Miah, 2000). Personnel of the Bangladesh Krishi Bank (BKB), a 100% government owned specialized Bank in financing in the agricultural sector, have mentioned that most of the rural entrepreneurs come from farming, trading and service holder family and in some cases due to non-availability of suitable jobs. They typically have no previous entrepreneurial experience and due to their lack of entrepreneurial mentality, they are not willing to share more risk by investing their equity towards the rural agro based industries. Some entrepreneurs are interested in diverting the loan money to other purposes or they invest money in risky windfall activities. There are no special rules and regulations to super vise their activities (Islam and Aktaruzzaman, 2001).

3.9 Policies Of Banks And Other Institutions

A good number of bank personnel mentioned that they faced serious problems in identifying the right type of people with entrepreneurial skill. The responding bank personnel also stated that the problem of identifying the purpose of loans is more serious in the case of small entrepreneurs engaged in agricultural activities and small business activities. In Bangladesh, a special bank named BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank Limited) had been established in 1988 with the mandate to finance small and cottage industries sector. Their direct lending procedure is operated by NGOs. But unfortunately its

mandate is not sufficiently utili zed by the lending of NGOs. The banks statistics from 1998 showed that out of 237 projects directly funded by the bank only two were women entrepreneurship related. Generally, financial institutions and banks extend credit for women under micro credit programs for poverty reduction. Based on the cost of the fund, the interest rates of these credits vary. For this purpose mainly donor supported project funds are used. Bangladeshs central bank, the Bangladesh Bank, also provides some funds. The Bangladesh Bank directs the commercial banks to lend at least 15 percent of their lending capital for the industrial sector, while 5 percent are expected to be spent for the small scale industry (SCI) sector. Often development agencies operate these loans. Furthermore, as pointed out by an undated paper by the Dhaka Chamber of Commerce and Industry (DCCI) (p. 10), other than for poverty reduction project loan, there is no special regulation for credit for women entrepreneurs.2 The overlapping of policies and rules is one of the major constraints faced by branch managers. Several Grameen Bank branch managers stated that different NGOs distribute loans among borrowers with utmost secrecy. In such a situation entrepreneurs may easily divert their loan amounts for some unproductive purposes. Due to such diversion, they are then unable to generate the income for the repayment of the loan and become defaulters (Rahman, Hossain and Miah, 2000). Personnel of the Bangladesh Krishi Bank (BKB), a 100% government owned specialized Bank in financing in the agricultural sector, have mentioned that most of the rural entrepreneurs come from farming, trading and service holder family and in some cases due to non-availability of suitable jobs. They typically have no previous entrepreneurial experience and due to their lack of entrepreneurial mentality, they are not willing to share more risk by investing their equity towards the rural agro based industries. Some entrepreneurs are interested in diverting the loan money to other purposes or they invest money in risky windfall activities. There are no special rules and regulations to supervise their activities (Islam and Aktaruzzaman, 2001).

4. Performance Of Taxation Policy And Fiscal Measures To Develop Women Entrepreneurship

Positive Impacts National budget can play a dominant role in developing women entrepreneurship by undertaking a gender sensitive fiscal policy The government can augment entrepreneurial potential of women by formulating fiscal policies that direct resources towards women and provide tax rebate or tax holiday facilities to women entrepreneurs. An increase in the income tax floor to 1, 80,000 in the last budget benefited women greatly since this taxation policy has possibility of rising the savings of low income earning women group as women has inherent

high propensity to save. They can invest this savings to undertake some business ventures. The exemption of taxes from income resulted from micro credit program further benefited women since this measure is supposed to increase micro entrepreneur who are mostly women. Income from fishery, poultry etc., is exempted from taxation and the exemption to income from the production of poultry feed largely encourage women to undertake poultry business. There were provisions in the national budget of the past few fiscal years to decrease the taxes on income from the transportation sector. The indirect taxes on Double Decker and large buses have been decreased. This measure plays a role to solve the transport problems of the women entrepreneur. Women entrepreneurs were positively affected by the decrease of indirect taxes on storage equipment made of PVC with zipper, platform made of plastic for vegetable plantation, nursery tray etc. Because they are large participants in storage, vegetable plantation and nursery businesses. The tax prerogatives given to the IT sector may affect women entrepreneurship since they are supposed to facilitate womens access to information. Products like-Designer branded consumer products, Metal fabrication including artificial jewelry; on-metallic mineral products (such as ceramic and refractory tiles and masonry; Plastics; Interior decoration, personal beauty and architectural specialties included in the list of 11 booster industries mooted by the SME Policy Strategies 2005 are mainly women dominated. These industries have become important sources of employment more recently. There is a need to extend the NBR list by appropriately including some or all of these new industries into some kind of coherent tax-holiday and tax-incentives program. Negative Impact Examination of fiscal measures undertaken in the national budget of the last five fiscal years shows that no women entrepreneur specific fiscal policy is adopted in the national budget of Bangladesh. However, women and women entrepreneur can derive some benefit from the general fiscal policy because of some of their characteristics. In general, tax policy and measures in Bangladesh are too complex to be understood by an average income earner. Tax policy and taxation are subject to many anomalies and contradictions, which exert an adverse influence, direct and indirect, on the investors including women For example, loan amounting to more than TK 50,000 if not

taken from a bank or through a crossed cheque issued on a bank, is treated as income. Loan money is also taxable as income if the borrower is unable to repay the same within 3 years. This tax system affect women entrepreneur more than their male counterparts since they do not have access to bank loan. Findings of a study showed that in about 87 per cent cases, women entrepreneurs derive capital for their business from informal sources (MWCA 2002). The section 184A of Income Tax Ordinance 84, discourages women to undertake activities requiring TIN since most of them are not tax payers. Whereas, activities requiring TIN are more income generating. Moreover, the issuance of TIN is highly centralized. The NBR at the central issues this certificate. Thus, the process is very long and time consuming, which a woman of a conservative society like Bangladesh hardly can complete. Moreover, at various stages of this process the applicant needs social networking and also needs to pay money to the officers to approve their files. As per rule 38 of the Income Tax Rules, a fund declared as initial capital in the self-assessment cannot be transferred in any manner or lent out within five years from the year of assessment. Imposing embargo on the transfer of capital or any fraction of it or lending the same has a negative implication for potential women entrepreneurs. Because, the women entrepreneurs suffering from shortage of fund will be deprived of the borrowing facility or receiving gift from their relatives or friends who declared capital in the self assessment. For the same reason, the potential women entrepreneurs, who want to start some business venture, will also be deprived from a source of capital. According to income tax rules, gifts made by parents to their children or by children to their parents or gift made between spouses, brothers, and sisters are tax-free. But gifts made by others above Tk.20,000 (twenty thousand) are taxable. Gifts from in-laws are also taxable whereas most of the married women in Bangladesh spend her whole life in in-laws house, and they accept their mother-in-law and father-in-law as their parents. But they can not receive any gift from them without paying tax. This law poses illogical hindrance for both existing and potential woman entrepreneurs to use gift as a source of fund without going into extra cost. This tax system discourages the gift giver to help women entrepreneurs with funds. This system poses as hindrance in the way of transferring resources towards women. At present, value added tax is a big source of revenue earning in Bangladesh. It is imposed on a large number of goods. For women entrepreneurs, there is no special consideration in administering VAT. Thus, this tax curtails the net earnings of the women entrepreneurs to a large extent, which in many cases discourages them to continue their business. For the encouragement of investment, tax holiday system was introduced as an incentive during Pakistan time. Tax holiday means exemption from payment of tax on profits and gains from business or industry for a specific

period of time. For entitlement to this facility the undertaking shall have to fulfill some conditions. Some of the conditions are as follows: It has to be owned and managed by a corporate body or by a company formed Under the Companies Act, 1993 or the company laws 1994. It has to be engaged in the manufacturing of goods or materials or subjection of goods or materials related to any process or exploration or extraction of mineral resources, processing of agricultural products, or in providing physical facility and in the tourism industry. At least 30% of the tax holiday profit shall be reinvested in the said undertaking or in any new industry, stocks and shares of public companies or in government bonds and securities. Women were not able to reap the benefit of the tax holiday since they can hardly fulfill these conditions. Existing tariff system also affects the development of women entrepreneurship negatively. Opportunity for import of consumers goods at low tariff puts women entrepreneurs, (who produce some of the imported consumer goods locally) in an unequal competition with the products of the countries, which have comparative advantages in raw materials and technology. It has been observed that women engaged in tailoring business/boutique are in tough completion with Indian product.

5. National Budget- The Instrument For Developing Women Entrepreneurship

An attempt has been made here to evaluate the performance of the national budget to implement women entrepreneurship related policies and objectives. To what extent, the budgetary measures enable women to solve the problems faced by them to undertake any business venture will also be an indicator of the performance of the national budget to develop entrepreneurship among women. National budget has two components revenue budget and development budget. More than half of all government expenditure is revenue expenditure. The salary and other amenities given to the government employees constitute the lion share of the revenue expenditure. This component of budgetary expenditure has very little to do with the development of women entrepreneurship. A part of the revenue resources is allocated for some safety net programs among which old age pension program, widow pension program, GR; TR and VGD programs is main. Safety net programs target hard-core poor to ensure them a minimum level of income and consumption. Therefore, these programs have no role to develop women entrepreneurship. But findings showed that in few cases, women beneficiaries of these programs developed as micro entrepreneurs (Mannan and Paul-Majumder 2003c). This fact indicates that entrepreneurial potential in women is so strong that even a very little support sprouts it up.

1.

As per section 184A of Income Tax Ordinance 84, any person submitting an application for obtaining tender document for supply of goods, execution of contract, opening letter of credit for import, trade license etc, is required to furnish a certificate from the Deputy Commissioner of Taxes containing a Tax Identification Number (TIN).A person is qualified to receive a TIN certificate only when he/she is a tax payer. A woman of an Upazila requiring TIN has to send her application to the Deputy Commissioner of a district. He will s end it to the Commissioner stationed at division level after scrutiny. The Commissioner after being satisfied with the merit of the proposal will forward the application to NBR for issuing TIN. NBR will issue the certificate only when they are satisfied adequately. Fiscal policy and measures undertaken in the revenue budget has tremendous bearing on the development of women entrepreneurship. These measures and policies have been assessed in this section in order to find out to what extent fiscal measures encourage, discourage or hinder the development of women entrepreneurship.

5.1 Budgetary Analysis

Annual development Programmes (ADPs) are the primary tools of the government to achieve women related commitments made nationally and internationally. As the budget expenditure is not categorized by gender, finding out the womens share in it is a daunting task. We went through the names of all the projects in every sector in the ADP from 1997 to 2005 to identify the projects having impact on women (direct and indirect) and project only aiming at women entrepreneurship development. We start our analysis with the Ministry of Social Welfare, Women Affairs and Youth Development and Ministry of Industries since only these two Ministries have projects on women entrepreneurship development. .

5.2 Ministry of Social Welfare, Women Affairs and Youth Development

The issue of women development remains the responsibility of this ministry, even though in order to mainstreaming women development with the national development women development is made a multi sectoral matter. This ministry represents 75% of population. However women development only refers to the development of destitute women where as non-destitute women and women entrepreneurs are also in great need to budgetary measures to facilitate both their working and housewifery life.

Table 1: Budgetary Allocation for Ministry of Social Welfare, Women Youth Development Total ADP allocati on (In Lacs ) 190000 0 192000 0 203000 0 220000 0 245000 0 Total ADP allocati on For the ministr y (In Lacs) 21543 26974 25017 24868 28562 ADP allocati on for WED1 project s (In Lacs) 640 340 336 658 808 RADP Allocat ion for WED project s (In Lacs) 235 340 250 654 203 Affairs and

Tota l no. Yea WED of r Project proj ect

0102 0203 0304 0405 0506 060707 08 0809 0910

59 75 59 43 40

1 1 1 2 2

WED Allocati WED on as a allocation % of as a % of Total Total ADP Ministr allocation y allocati on 1.09084 0.012368 2 1.26047 0.017708 3 0.012315 0.99932 0.029727 2.62988 6

(In Lac Taka) WED1= Women Entrepreneurship Development. Source: Annual development program 20002-06 Government of Bangladesh.

Planning

Commission.

Table shows allocation for women entrepreneurship development is not done purposively in the budget document except some allocations in the budget of the Ministry. There was only one project for women entrepreneurs in FY2001 (Entrepreneurship Development of Women) with allocation of Taka 47.5 million. This budget is very minuscule and it comprises only 0.03 per cent of the total Annual Development Plan (ADP). The number of projects increased to two in FY 2005 (Entrepreneurship Development of Women and Promotion of Women Entrepreneurs for Economic Development) with a volume of Taka 65.4 crores,

however in terms of share it remained unchanged. This makes only 2.62% of total allocation of the Ministry. In the following FY 2006 it became insignificant.

5.3 Ministry of Industries

Within the overall objective of attaining a self-reliant company, the fifth Five-year Plan adopted the export-oriented industrialization as one of the strategies for the development of the industrial sector of the country. The strategy of exportoriented industrialization is premised on the possibility of exploiting international comparative as well as competitive advantage in trade. This strategy has provided unprecedented wage employment opportunities for women because their labor is comparatively cheap. Findings show that women constitute more than 66 percent of the total number of workers employed in the garment industry (Paul Majumder and Begum 1999). Table-2-Budgetary Allocation for Ministry of Industries (In Lac Taka) Total ADP allocat ion (In Lacs) 190000 0 192000 0 203000 0 220000 0 245000 0 Total ADP allocati on For the ministr y (In Lacs) 38520 36267 26668 41449 44558 ADP allocat ion for WED1 project s (In Lacs) 663 800 616 RADP2 Allocat ion for WED1 project s (In Lacs) 500 600 WED allocati on as a % of Total ADP allocati on 0.0263 2 0.0312 5 WED Allocat ion as a % of Total Ministr y allocati on 1.2980 27 1.6543 97 -

Yea r

Tota l no. WED of project proj ect

0102 0203 0304 0405 0506 0607 0708 0809 0910

61 52 36 25 28

1 1 1 -

RADP2 = Revised Annual Development Program Source: Annual development program 2000-05.Planning Government of Bangladesh.

Commission.

6. Recommendation 1. Sectors Where Encouraged. Women Are Engaged In Should Be

Development sectors, which contribute directly to economic growth, should have more women-focused projects. In this regard it is very urgent to undertake women-focused programs in the agriculture and industry sector. Rural Development and Institution Sector, Transport and Communication sector, Oil, Gas and Natural Resources sectors should also have women-focused development programs. Among the indirectly growth oriented sectors, education, science & technology and labor & manpower sector must have more womenfocused programs to develop women entrepreneurship. Training programs for electronic, information technology (IT), mechanical technology, garment manufacturing etc., should be undertaken for women instead of undertaking training programs for handicraft, tailoring etc. For this purpose more development programs for establishing polytechnic and IT schools and colleges should be undertaken. These schools and colleges should be dispersed up to village level. Reducing the percentage of VAT to a single digit for the SMEs (5%-7%).

2. Undertaking More Women- Entrepreneurship Focused Project Both In The Directly And Indirectly Growth Oriented Sectors
a) Encouraging women to undertake agro based industries. b)Distribution of industrial plot in the EPZs and BSCIC zones. c) Building the capacity of women through higher education and training on high skill, IT and consultancy facility. Exemption of taxes from income resulted from micro credit program. Exemption of taxation on income from fishery, poultry etc and the exemption to income from the production of poultry feed. This will benefit women since this measure is supposed to increase micro entrepreneur who are mostly women. These exemptions largely encourage women to undertake poultry business. Women engaged in tailoring business/boutique are in tough completion with Indian product.

Opportunity for import of consumers goods at low tariff puts women entrepreneurs, (who produce some of the imported consumer goods locally) in an unequal competition with the products of the countries, which have comparative advantages in raw materials and technology. It is imposed on a large number of goods. For women entrepreneurs, there is no special consideration in administering VAT. Thus, this tax curtails the net earnings of the women entrepreneurs to a large extent, which in many cases discourages them to continue their business. Venture capital for women entrepreneurs in this sector should be ensured.

3. Technical Assistance Program Should Be Undertaken. 4. Positive Fiscal Measures

a)Creation, distribution and monitoring of a fund like EEF. b) Provide various tax holidays for women owned enterprises and that are engaged in developing entrepreneurial skill of women. Like- A tax holiday or tax break can be offered to companies where majority and controlling shareholders are women. c) Companies with female majority in its top management including (e.g. CEO) should get tax rebates. d) A tax rebate can be offered to companies engage in women friendly policies. Like- a large company engaging smaller women operated companies as their subcontractors -should be eligible for tax rebate. e)Import duties and other levies can be relaxed in the cases of women owned and operated companies. f)Bangladesh Bank should provide incentives like-income tax rebate, subsidies etc. So that banks and financial institutes are encouraged to take part n the refinancing shame. f) Commercial banks should be encouraged through fiscal incentives to provide large loans for women entrepreneurs without collateral and at a low interest rate. Enabling the women to reap the benefit of tax Holiday system should be allowed to continue for women entrepreneurs for a minimum of another 25 to 30 years including not only selective types of industries but for all types of industry undertaken by women entrepreneurs. The existing system of getting entitlement to tax holiday facility also should be made simple. Tax holidays will give women significant control over wealth.

5. Resource Diversification For Women.

a) To rebate tax or exempt tax from womens income, property and capital. b) Abolition of tax amounting more than tk 50,000 received from informal sector. c) Registration of houses should be made in the name of both spouses and holding tax also should be paid in the name of both spouses.

d) Gift tax should be exempted from the property gifted to daughter in laws / woman to start some business. e)Reducing existing interest rate of commercial banks. This will remove the hindrance of womens access to productive resources.

6.Trade And Tariff Policy

i)Introducing a single digit VAT for SMEs(from 15% to 5%-7%) ii) High tax on import of goods which locally produced by women. iii)Simplifying TIN receiving procedure.

7. Positive Monetary Measures

a) Alternative resources should be treated as collaterals. Like- precious metal for bank loans. d) There must be some budgetary provision so that women owned and operated companies get priority when it applies for water, gas, electricity etc. 8. Gender sensitive development program must have fixed targets for women 9. Local government should be encouraged to develop women entrepreneurs

10. Special Safety Net Program.

In case of sudden natural disaster a fund should be created to facilitate women entrepreneurs.

7. Concluding Remarks
Entrepreneurship is the key to the creation of new enterprises that energize and rejuvenate the economy. Entrepreneurship also plays a vital role in economic development. Entrepreneurship serves as the catalyst in the process of industrialization and economic growth. The emergence and development of entrepreneurship largely depends on the supporting conditions of different factors such as economic, social, cultural, and psychological. Based on institutional theory, these factors can also be divided into regulative, normative and cognitive factors. Regulative factors refer to the rules and regulations of Government and other institutions that influence women entrepreneurship development in Bangladesh. Our Government has adopted some policies regarding women entrepreneurship development in Bangladesh. But the complication arises at the time of implementation. Since entrepreneurship development is extremely important to activate the economic development of Bangladesh, it would be of utmost importance to ensure the facilitating factor of womens development. If properly supported, women have a great opportunity to maintain their livelihood through engaging themselves in various types of income generating activities.

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