Cottage And Small Industry Which Saw 20% Growth Is A Pillar Of Bhutan’s Industry Sector

To date, the CSIs constitute more than 90 percent of Bhutan’s industry sector.

Weaving textile in Bhutan. (Source: Bhutan Travelbooking)

 

By Tshering Dorji | Kuensel

The cottage and small industry (CSI) has grown by about 20 percent between June 2017 and June this year. To date, the CSIs constitute more than 90 percent of Bhutan’s industry sector.

According to the CSI annual report published by the Department of Cottage and Small Industry (DCSI) in Bhutan, there are 20,195 licensed and operational CSIs in the country as of June 15, 2018.

Compared to June 30 last year, there were 16,887 CSIs. A total of 3,308 licenses were issued over the 12-month period.

However, close to 79 percent of CSIs in Bhutan is dominated by the service sector, while the Production and Manufacturing sector accounts for only about 10 percent. The remaining 10 percent is comprised of contract sector.

Statistical breakdown of the various industrial sectors in Bhutan

“Nonetheless, the production and manufacturing sector recorded an impressive growth of 27 percent in the 12-month period,” the report stated. The service sector also recorded a growth of 19 percent followed by the contract sector with 16 percent.

It is also estimated that the CSIs, as of June 15 employs 92,180 people. This figure was derived based on the employment survey conducted by the DCSI in 2015. The survey reveals that the cottage industry employs about 3.6 people per industry on an average and the small industry employs 5.45 people per industry. The average number of people employed by the contract industries is 4.7 per establishment.

What constitutes a cottage or a small industry in Bhutan?

An industry is classified as a cottage industry if the investment size is less than Nu 1M or if it employs one to four people. Similarly, if the investment size is between Nu 1M and Nu 10M while providing an employment of 5 to 19 people, it is classified as a small industry.

 

Source: Tourism Council Of Bhutan

 

The growth in CSIs is attributed to various initiatives that the DSCI undertook in addition to contributions from the Rural Enterprise Development Corporation Limited (REDCL) and the Priority Sector Lending Scheme initiated by the Central Bank.

As a part of the human capital development and enhancement of entrepreneurship culture in Bhutan, the DCSI provided essential skill development trainings to 211 entrepreneurs, initiated business advocacy workshops. To boost innovation in Bhutan, five consecutive annual enterprise awards were also given.

Under the rural industrial development scheme, the DCCI provided a grant worth Nu 2.7M to the rural CSIs for the purchase of machineries. In the fiscal year of 2017-2018, the Department has supported a total of 17 CSIs in 12 dzongkhags.

Funding support given by various organisations in Bhutan

A CSI revolving fund under the BDBL has approved 356 projects as of March 2018 and an amount of Nu 546M has been disbursed. As for the revolving fund with REDCL, a total of 3,155 projects have been approved and an amount of Nu 265M disbursed.

The Priority Sector Lending scheme initiated by the Royal Monetary Authority has received 92 applications between January and March this year, of which 67 have been approved. The fund disbursement stands at Nu 27M.

To provide more seamless services for prospective entrepreneurs, the report stated that the PSL application system would be mounted on the [email protected] portal of citizen services in collaboration with the G2C office.

In addition, the DCSI has issued 53 letters of interest for leasing State Reserved Forest Land (SRFL) and provided recommendation for fiscal incentives (Sales Tax and Customs Duty exemptions) to 39 CSIs.

 

This article first appeared in Kuensel and has been edited for the Bhutan Times.

 


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