Bhutan’s economy is one of the smallest in the world. Majority of the people are illiterate and reside in rural areas. 31% of the Bhutanese live under poverty line but in general all Bhutanese have shelters and sufficient food to eat. The living standard of the people has also stared to grow over the recent years. The villages have schools and Basic Health Units and are also electrified and connected with farm roads.

Economy in Bhutan is based on agriculture, forestry and hydropower. The agrarian practice is mainly based on subsistence farming and animal husbandry. Handicrafts like weaving, wood craft, bamboo and cane craft, paintings etc. also add to the income. The main food crops are maize, rice, buckwheat, barley and wheat. The cultivation of cash crops like apples, oranges, ginger and cardamom has added to the national revenue. The country has always been self-sufficient in terms of food consumption. Cattle products like milk, butter and cheese have been the major diet besides adding to the income of many farmers.

With the opening of tourism in 1975, the country has made a significant expansion in tourism industry. The development in tourism has led to boom in arts and crafts. The tourist arrival has increased by manifolds and is one of the main contributors to the revenue of Bhutan.

However, Hydro-electricity remains the biggest revenue generator of Bhutan. The country has the potential to generate an estimated 30,000 MW of electricity. Chhukha hydropower project, the first of its kind in the country, generates 336 MW. The biggest hydropower so far is Tala which is 1020 MW. The bigger chunk of the generated power is consumed by India. More hydropower projects are in the pipeline.

The manufacturing sector contributes to 14 percent of GDP with products such as Calcium carbide, Ferro silicon, cement, processed food, and wood based industries. The establishment of more energy intensive industries in the future is expected to facilitate the growth of this sector.

Today, Bhutan has the highest per capita income in south Asia with US$ 1,321


The Bhutanese currency is Ngultrum which is made up of one hundred chhetrums. Its value is equal to an Indian rupee. The most used is in paper form although people also use coins.

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