Pay revision for LG leaders and fiscal incentives will also be endorsed
The National Assembly will endorse the annual budget 2017-18 today with deliberations on it concluding yesterday.
Along with it, Fiscal Incentives 2016 and the proposed pay hike for local government members will also be endorsed. They will be forwarded to the National Council for deliberation.
The third pay commission has proposed a 40 percent increase in the basic salaries of local leaders. A hike in their daily substance allowance and siting fees has also been proposed.
However, after the finance committee raised the issue, the Assembly decided that thrompons would lose their house rent allowance from the new financial year.
Thrompons, whose basic salary starts from Nu 45,785, today enjoy 20 percent of their basic salary as house rent allowance.
The finance committee found that local leaders including thrompons are not entitled to a house rent allowance as per the Local Government Members’ Entitlement Act, 2015.
Some MPs said it was also important to revise the civil servants’ salaries if local leaders’ salaries are to be increased. Finance Minister Namgay Dorji, however, said that the country did not have enough revenue to give civil servants a salary hike.
“The decision to increase local leaders’ salaries was made after a careful study of the country’s economic situation,” the finance minister said.
The house also deliberated on the proposed stabilisation fund of Nu100 million to maintain stability of the economy. Opposition Leader Pema Gyamtsho (PhD), however, said there was no legal basis to set up a stabalisation fund and that doing so could set a wrong precedent.
Prime Minister Tshering Tobgay responded saying that establishment of the fund would help a developing economy like Bhutan address its challenges. “The Health Trust Fund has benefited the country and the stabalisation fund will help Bhutan in the same way,” he said.
The house also deliberated on the country’s external debt situation. Opposition MPs argued that the country’s external debt has grown since the government took office in 2013.
According to International Monetary Fund, the country’s debt increased from 93.64 percent of GDP in 2013 to 112.87 percent of GDP in 2017. In absolute terms, the total outstanding debt as of June 2016 was Nu160.562 billion (B). Of this total debt, Nu 155.9B was external debt.
Education Minister Norbu Wangchuk said non-hydro debt has actually decreased for the first time in Bhutan’s history and that it was important to treat hydro and non-hydro debts differently. Non-hydro debt, according to the budget report is only 23 percent of GDP.
The house resolved that the Fiscal Incentives 2016 would come into effect from May 8 2017. Fiscal incentives include tax holidays, income tax exemptions, exemptions on tax deducted at source and tax rebates.
The total proposed budget for the financial year is Nu 60.77B.