History and Important Milestones in Industry Sector

Sri Lanka’s industrial policy and strategies were in line with the economic and political strategies of the existed governments and the international economic environment. Prior to independence, our industry was based on export processing, and with the outbreak of World War II in 1939, a policy of establishing basic industries in the public sector was pursued through government intervention. Through the Session Report No. 73 of 1947 of a committee appointed by the State Council, entered into an industrial policy with more government intervention.  Even after independence, a public sector-based industrial policy was pursued, with a greater focus on import substitution industrialization. During the 1960-1970s, a strict protection policy was adopted for local industries and it was heavily encouraged. Further, export related industries were encouraged and an import substitution industry policy was adopted during this period.

In 1970, the government followed a strict import substitution industry policy and the government directly contributed to the production process. Therefore, the government’s industrial policy was to encourage import and export related industries under a closed economic policy. Further, the process of nationalization of private institutions was vigorously implemented during this period. But in 1977 the government adopted an open economic policy, making the private sector as primary mechanism for industrial development.A policy of restructuring public institutions was also implemented under the Open Economic Policy. Under this some state owned industries were privatized. For example, Thulhiriya, Pugoda textile factories. In particular, the Government has focused on industrial development under the Public Private Partnership (PPP) BOT, BOO Policy.