Govt. pushes bold industrial revival amid economic uncertainty

The Industry and Entrepreneurship Development Ministry has launched an ambitious reform drive in the first quarter of 2025, seeking to revitalise the country’s struggling industrial base and re-engage its small and medium-sized enterprises (SMEs) amid economic headwinds. 

In a detailed update shared last Friday (18), Industry and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe outlined what he described as ‘practical, coordinated action’ taken during the first three months of the year, with a clear emphasis on structural reform, fiscal mobilisation, and sector-specific relief. 

“We are building a stronger foundation for industrial growth, not just with policy — but through practical, coordinated action,” he said.

Noting down the key highlights of the first quarter progress in a seven-point analysis, Abeysinghe pointed to the restructuring of State-owned enterprises (SOEs) at the top. 

“From appointing new Boards to crafting turnaround strategies, we have initiated bold steps. Entities like BCC Lanka and the National Salt Corporation are showing strong results, while critical restructuring plans are underway for the sugar, cement, paper, and ceramics sectors,” he disclosed.

The Deputy Minister also noted that the financial backing has also been substantial, with a Rs. 13 billion Budget for industrial revival. 

“Combined with Rs. 100 billion across Ministries, this is unlocking ambitious national programs. Key policy drafts in progress include the National Tariff Policy, Anti-Dumping Framework, National Industrial Policy, and SME Strategy, a new SOP for vehicle assembly and the National Industrial Land Policy,” he added. 

Abeysinghe opined that one of the most urgent challenges facing the Ministry is the ongoing SME credit crisis, where over 12,000 SME firms need to be re-engaged. “We are collaborating with banks to shift from ‘recovery’ to ‘revival,’ with targeted capital access and policy relief through the Finance Ministry. The key result so far is that banks can lend to non-performing loan (NPL) customers without any restrictions in accounting standards,” he said, adding it is a move intended to trigger fresh capital flows into distressed but viable businesses.

In parallel, he said the Ministry has initiated structural reform across its institutional support network, including the National Enterprise Development Authority (NEDA), Industrial Development Board (IDB), and Export Development Board (EDB). As per Abeysinghe, these agencies are being reconfigured under a lifecycle model, to eliminate overlapping functions.

“The new integrated framework will be rolled out in June,” he said.

Abeysinghe also highlighted the gains in sector-specific relief. These include VAT exemptions on pharma raw material imports and dairy products, the launch of the coconut industry recovery program, Exporter Forum prioritising 17 urgent issues, and addressing vehicle assembly and industrial land access challenges.

In addition, the Deputy Minister noted that investor interest is growing, with around 200 new land requests lodged in the Western Province alone. He said the Ministry is also deepening its ties with international partners, including the United Nations Industrial Development Organisation (UNIDO), United Nations Development Programme (UNDP), International Labour Organisation (ILO), and a range of diplomatic missions. 

Abeysinghe finally updated on a series of strategic initiatives moving into the launch phase. 

Among the key projects is a Rs. 50 billion collateral-free loan scheme for SMEs, scheduled to begin in June. A National Venture Capital Fund is under design, and four new Industrial Zones are being planned. Additional projects include an Industrial Data Registry, new SOPs for electric vehicles (EVs), and the National Productivity Awards, slated to be held on 15 May. 

Despite the overall economic environment remaining fragile, Abeysinghe framed the Ministry’s first quarter actions as an inflection point in the industrial sector recovery.  “Let’s build together. Your ideas and support are always welcome,” he added.