The cottage and small industry (CSI) has grown by about 20 percent between June last year and June this year.

According to the CSI annual report published by Department of Cottage and Small Industry (DCSI), there are 20,195 licensed and operational CSIs in the country as of June 15, this year. As of June 30 last year, there were 16,887 CSIs. A total of 3,308 licenses were issued in the 12-month period.

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

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

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

An industry is classified as cottage if the investment size is less than Nu 1M or employing one to four people. Similarly, if the investment size is between Nu 1M and Nu 10M providing an employment of 5 to 19, it is classified as small industry. In case of conflict between the investment and employment, investment takes the precedence.

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

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

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

A CSI revolving fund under BDBL has approved 356 projects as of March this year 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 Royal Monetary Authority has received 92 applications between January and March this year, of which 67 has been approved. Fund disbursement stands at Nu 27M.

The report stated that, the PSL application system would be mounted on the G@B portal of citizen services in collaboration with G2C office.

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

CSIs constitute more than 90 percent of the country’s industry sector.

Tshering Dorji

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