The opposition calls for the government to hand over the BOiC portfolio to BDBL
Policy: The government should immediately close down the Business Information and Opportunity Centre (BOiC) and hand over its assets and portfolio to the Bhutan Development Bank Ltd (BDBL), the opposition party has stated in a press release.
However, the party asserts that the condition must be such that loans be used for clearly specified purposes and with the same interest rate of four percent.
The opposition suggested that the difference between BDBL’s existing interest rate and the concessional interest rate of four percent be borne by the government and provide more subsidy to cover the cost of operation.
“The BOiC cannot continue business as usual especially after it was closed down on issues of legality,” the opposition party stated. “The proposal of the government to start yet another state owned enterprises (SOE) is putting old wine back in the same old bottle.”
When the Opposition Leader visited eleven dzongkhags the most complaints were on BOiC loans, the party claims in its press release. The very fact BOiC is mired in controversy was because of the perception that the scheme favours party supporters, it is stated.
“Setting up an SOE that might as well be called BOiC-II will not mitigate this perception,” it is added.
Further the public finance Act mentions that requirement to form an SOE is to either carry out social security or in areas of natural monopoly. “Carrying out the functions of a financial intermediary (lending and borrowing) is neither a social security nor a natural monopoly.”
The Act also states that for a budgetary government body, unless there is a compelling reason to deliver goods and services in a commercial environment, such activities should be handed over to an existing enterprise.
The Opposition is of the view that there are institutions and agencies like the BDBL, the Department of Small and Cottage Industries and other financial institutions that can manage the fund more efficiently and transparently with the help of local governments.
In November last year, the Cabinet decided to close down BOiC to institute a special financial agency as a state enterprise, to continue providing collateral free loans at four percent.
The government also decided that BOiC would continue to function as usual until the new state enterprise is formed. “This is a classic example of a policy paralysis,” the opposition party stated in the press release.
The opposition also calls the government to submit a detailed report on loan disbursements, including the list of recipients in different dzongkhags and expenses incurred to the Joint Sitting of Parliament.
“Let the stimulus plan stimulate not paralyze the economy,” it is stated.