Tough Economic times lead to a drop in Cottage and Small Industries

The CSI Report 2013 states that the number of Cottage and Small Industry (CSI) dropped due to the slowdown in the construction sector, earlier in 2012 after the Royal Monetary Authority (RMA) issued directives to freeze construction loans by given by commercial banks.
In Bhutan, CSI constitutes 95 % of the total industry. As of December 31, last year, operational CSI stands at 12,548. There were 13,068 operational CSI in December 2012 as compared to 11,001 in 2011. CSI in Bhutan dominates the service and contract sector with a few in manufacturing bases.
Of total, 821 CSIs have borrowed money amounting to Nu. 259.67 mn from various banks in country. Bhutan Development Bank Ltd. owes the highest with 118 .71mn and has 742 beneficiaries followed by Druk PNB Bank with 66.43mn and 30 beneficiaries, Bank of Bhutan Ltd at 61.30mn with 28 beneficiaries, Bhutan National Bank Ltd with 12.88mn and 20 beneficiaries, and T-Bank with 0.35mn and a lone beneficiary.
Of the total operational CSIs, 97.4 8% (12,232) are sole proprietors, 0.88% (110) in partnership, 1.31% (165) as a company and 0.33% (41) as government-owned entities.
In account to the employment generation in 2013, the minimum total employment contributed by CSI is 33,645 compared to 34,246 in 2012.
Looking into CSI by sector, the contract sector among three sectors; service, production and manufacturing (P&M) and contract are affected most. The report states that it has declined by 9.23% from 2012. The manufacturing sector also contracted by almost 3.16 %.
The ban on the import of furniture from other countries did not impact the furniture making enterprises in the country. The number of furniture making enterprises decreased from 441 units in 2012 to 415 units by the end of 2013, the report states.
Reflecting into the CSI trend by region and dzongkhag, growth is shown in Phuentsholing, Monggar and Gelephu regions though the overall number declined. Monggar region saw 11% growth with 1,520 CSI to 1,690.
On the other hand, Samdrup Jongkhar region recorded maximum decline at 33%. Thimphu has the highest number of CSI in the country with 4,106 whereas Gasa has the least with 30 as of 2013.
Punakha, Trashigang and Trashigang showed impressive growth in CSI, but the numbers in Pemagatshel and Samdrupjongkhar declined sharply from 2012.
On the CSI by scale, manufacturing and service sector in cottage scale category accounts to 75.4% and 76.6% respectively. In all 20 dzongkhags, the cottage-scale industries predominates the category. Contract sector has no cottage scale category.
For CSI by activity in production and manufacturing sector, in almost all the dzongkhags forest based industries are dominant. Forest based industries are recorded highest in Paro with 119 CSI followed by Thimphu, Trashiyangtse and others. It involves furniture making, wooden bowl, hand-made papermaking and cane and bamboo craft making.
Mineral-based activities are recorded as highest in Samtse with 21 CSI where it is also common in Thimphu. Agro- based is recorded highest in Thimphu with 32 CSI followed by Sarpang, Chukka and Samtse and others. Gasa has none of the CSI by activity.
For CSI by activity in service sector, the hotels and restaurants records more than 43% of the sector. Other dominant sectors are transport, storage and communications, real estate, renting, business activities, repair of motor vehicles, motor cycles and personal and household goods.
Thimphu tops in all the categories whereas Gasa records the least. Hotels and restaurants outweighs in service sector with 3,431 followed by transport, storage and communications with 1,445 and others.
Electricity, gas and water supply and publishing, printing and reproduction of recorded media record the least with four and five respectively.

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