Production and manufacturing sector had the highest growth in the first half of the year 

Economy: The cottage and small-scale industries (CSI) created jobs for 4,939 people during the first six months of 2015, according to the CSI department’s half-yearly report.

The industry today employs 46,702 people, an increase from 41,763 in December 2014.

A business establishment with a capital investment of less than Nu 1M (million), employing one to four people, is called a cottage industry. A small-scale industry should have an investment from Nu 1M -10M and employ five to 19 people.

The economic affairs ministry issued a total of 1,623 new CSI licenses between January and June this year, taking the number of operational CSIs to 16,816 from 15,193 last December.

The CSI contributed an estimated 12.8 percent of GDP in 2014.

The report states that Bhutan’s CSI is dominated by service sector (66.6 percent) and contract sector (22.6 per cent) with a small manufacturing base. Together, service and contract sectors account for 89.2 percent of the total CSI in the country.

Bars while being considered part of the service industry, however, are not included in this report.

While the average growth of the CSI is 10.7 percent, the production and manufacturing sector during the six months recorded the highest growth rate at 15.7 per cent.

“This can partly be attributed to the establishment of the Business Opportunity and information Centre (BOiC), which provided loans to 145 new production and manufacturing ventures under their Revolving Fund,” states the report.

The average number of people employed by CSI in Bhutan is 1.9 and 6.8 per enterprise respectively.

Region wise, Thimphu, comprising six dzongkhags, recorded the highest growth both for small-scale and cottage-scale industries during the period, while Samdrupjongkhar region comprising only two dzongkhags recorded the lowest small-scale industry growth of just 5.3 per cent. The Mongar region comprising of four eastern dzongkhags recorded the lowest for cottage-scale industries.

There were, however, no new establishments in Gasa during the six months.

Bhutan’s small-scale manufacturing industry, the report states, is characterised by very low-tech and heavily dependent on the natural resources. More than 50 percent are forestry resource based. They include sawmills, furniture making, wooden crafts and household items, hand-made papermaking, cane and bamboo craft and household items.

The service sector is more diverse as compared to manufacturing. But an overwhelming 43 per cent of the service industry is hotel and restaurants.

Transport, storage and communication sub-sectors, which consist of activities such as air ticketing, tour operators and clearing agency, constitute 21 percent of the CSI. Real Estate, renting and business activities sub-sector make up 13 per cent and the dominant activities under this are consultancy firms and equipment and machinery hiring firms.

MB Subba