Govt. to formalize informal businesses to revive economy

The ministry is coming up with a strategic policy to help the business identities

One of the priorities of the government to revive the economy is by formalizing the informal businesses in the country, according to Economic Affairs Minister Loknath Sharma.
The minister informed the House in response to the question from the MP of Kilkhorthang Mendrelgang constituency, Bimal Thapa, who asked about the economic affairs ministry’s plans and priorities to revive the economy of the country.
MP Bimal Thapa said with the pandemic the economy has worsened and it has largely impacted the livelihood of the people.
“What are the priorities of the ministry to overcome these challenges?” the MP asked.
According to the minister, the formalization of the informal economy is for technology-driven, skilled-based upgrading of economic activities, scaling up the operational size of small enterprises, boosting and diversifying production, and improving businesses in the country.
Lyonpo shared with the House that it is time now to focus on measures that enable enterprises operating in the informal sector to make a smooth transition to the formal sector.
“It is vital to capitalize on the potential of the informal sector for sustained stimulation of the economic growth,” he said.
According to the Lyonpo, the long-term vision is to increase productivity of the informal sector by equipping them with technical and business skills, training, finance, and enterprise support to compete in the markets.
He added that the challenges of the informal economy are not new. But what is interesting are the opportunity and the urgency that the ongoing pandemic has offered the government to formalize the informal sector.
“However, the lockdown has severely impacted the informal sector and these small enterprises to continue their operations. The only plausible way to continue operations is by availing the economic stimulus plan announced by the government,” the minister said.
Lyonpo Loknath Sharma said the formalization of the informal sector would also help to build an accurate database of the informal workers which eventually would help them to get access to various government schemes over time.
“This is one of the priorities, considering in the post fiscal crisis responses keeping the economic and vulnerability of the informal sector in mind,” he said.
Lyonpo also shared that the government will take around two to three years to rebuild and revive the economy with a contingency plan put in place.
“Innovative enterprises may contribute to formalizing the informal sector in several ways,” Lyonpo Loknath Sharma said, adding that they may provide employment opportunities and innovations that encourage people and businesses to move from the informal sector to the formal sector.
Lyonpo also explained that with small and cottage industries, the ministry has made easy ways to get registration and get licenses, and within a month around 290 of them have registered.
“We have also come up with integrated business licenses to boost the business identity in the country and reforming the distribution of the wholesale goods and services during such crisis,” the Lyonpo said, adding that the ministry is coming with a strategic policy to help the business identities.

Kinley Yenten from Thimphu