To ensure smooth transition of government and continue developmental activities

Dechen Dolkar 

The budget for 2023-2024, which coincides with the dissolution of the government in October, but covers the entire fiscal year, stands at Nu 85.5 billion (B).

Of the total allocation, expenditure is estimated at Nu 74.8B of which Nu 45.5B will be allocated for recurrent expenditure and Nu 29.3B for capital works. The allocation has increased by around Nu 3.7B from the previous fiscal year. The total revised budget for the FY 2022-23 is Nu 84.1B as the recurrent budget allocation also increased by Nu by around Nu 9B from previous fiscal year.

Presenting the budget to the National Assembly yesterday, Finance Minister Namgay Tshering said that the FY 2023-24 budget has been formulated for the entire fiscal year considering the need to ensure smooth transition and continuation of developmental activities.

 Lyonpo said that the increase in recurrent expenditure was because of the provision for pay revision the 6th Pay Commission recommended and interest payments.

The FY 2023-24 budget is ai

 Lyonpo said that the budget has been drawn by taking into account spillover activities from the past financial year owing to disruptions caused by the Covid-19 pandemic and activities from the reform initiatives. 

The GDP is estimated to grow to 4.7 percent.

The total estimated resource for the FY 2023-24 is Nu 53.5B, a decrease of 12.4 percent from the FY 2022-23 revised resources estimates. Domestic revenue is estimated at Nu 46.2B including the Nu 4B being transferred from the DHI. The estimated external grants of Nu 6.3B consists of Nu 2.3B from GoI, Nu 1.7B from ADB, Nu 401.2M from World Bank and remaining from other development partners.

Of the total capital expenditure, about 27 percent is financed through internal/external grants, and 73 percent from external/internal borrowings.

As of March 31, 2023, the total public debt stood at Nu 267.4B, accounting for 132.1 percent of FY 2022-23 GDP estimate.

The economy is estimated to decrease 4.2 percent in 2023 from 4.7 percent in 2022. However, it is projected to grow 5.2 percent in 2024. 

Lyonpo said that over the medium-term, economic growth will follow a positive trajectory supported by multiple structural changes including commissioning of various hydropower projects – Nikachhu hydro power (December 2023), and Punatsangchhu Hydropower project – II (December 2024). 

With the tourism sector on its path to recovery, both international and regional arrivals are expected to increase, contributing positively to the economic growth. Lyonpo said that the budget for FY 2023-24 has been formulated for the entire fiscal year to avoid a dip in GDP during the transition phase.

 Fiscal deficit is projected to Nu 21. 3B which is equivalent to 9.7 percent of the GDP.

Major activities  for fiscal year Education 

Nu 180.3M is allocated for educational reforms, Nu 234.130M for Early Childhood Care and Development, Nu 424.020M for undergraduate scholarship and Nu 108.120M for Scholarship in colleges and masters programme for in-service teachers.

Health 

The government has allocated Nu 32.34M for the Pema Centre 60-bedded hospital, Nu 370.76M for 65-bedded MCH in Mongar, Nu 1.05B for procurement of medical equipment, Nu 63.175M for continuing medical equipment, Nu 136.86M for implementation of e-PIS and Nu 190M for development of national identity.

Trade 

Nu 1.09B is allocated for industrial parks, dry ports and industrial estate and Nu 180M for POL depot.

Energy

Nu 944.69M for construction and installation of 17 MW Sephu utility skill solar project.

Drinking water

The government has allocated Nu 527.21M for water flagship activities in various Dzongkhags and Thromdes.

RNR

Nu 191.06M is allocated for Bhutan for Life projects and Nu 877.58M for the Million Fruit Trees, Phangyul irrigation scheme, establishment of warehouses, integrated cold storage, and animal health facilities.

Roads 

The government has allocated Nu 486.64M for improvement of primary national highways, Nu 400.47M for construction of secondary highways, Nu 220.27M for completion of on-going blacktopping of GC roads, Nu 49.57M for ongoing construction of Laya GC road, Nu 244.80M for construction and maintenance of bridges and Nu 187M for monsoon restoration works. 

The report also states that the General Reserve provision earmarked for GSB (Nu 1.5B), Chain Link Fencing (Nu 1B) and Subsidy (Nu 250M) under the “National Contingency” shall be implemented subject to fund mobilization during the FY. 

The budget report has been referred to the Economic and Finance Committee to prepare for a review for the third reading on June 19.