Members also made recommendations

The 13-member economic and finance committee of the National Assembly yesterday stated that the national budget for the fiscal year 2021-22 was well justified and that it would ensure macroeconomic stability and economic revival.

However, the committee submitted recommendations on five programmes including the National Credit Guarantee Scheme (NCGS), which the committee stated lacked regional balance in the distribution of loans.

The committee’s chairperson, Kinley Wangchuk, stated that while the objective of the scheme was noble, banks could only approve 81 projects, most of which fall in the western region of the country.

He said the project had failed to cater to far-flung dzongkhags and gewogs and that it would ultimately create regional imbalance and upsurge in rural-urban migration.

It recommended creating extensive awareness on NCGS and institute a mechanism of hassle-free loan accessibility amongst all the Bhutanese with a regionally balanced plan. “The government should put in place stringent measures for monitoring and loan recovery.”

The government initiated NCGS programme to enhance access to credit to promote cottage and small industries (CSI) and medium industries through banks for a period of three years with a fund of Nu 3 billion (B) to bolster the economy during the time of pandemic.

However, Opposition Leader Dorji Wangdi said that the NCGS was unconstitutional and not in compliance with the Public Finance Act.

He reasoned that the government should not provide guarantee on the loans availed by private individuals as per the Constitution and the Public Finance Act.

Finance Minister Namgay Tshering said that such a measure was important for revival of the economy, which has been affected by the Covid-19 pandemic.

He said that access to finance had been an issue for aspiring entrepreneurs and youth. “Unemployment is one of the biggest issues and the scheme would help create jobs. It’s against neither the Constitution nor the Public Finance Act.”

The committee observed that farmers had responded to the calls of the nation on food production, both for local consumption and export.

However, it submitted that farmers were not able to sell their produce in the market conveniently.

The committee recommended the government to improve access to the market by improving supply chain management and logistics arrangements within the country.

Farmers have been unable to travel freely to high-risk areas in the south and have to totally resort to agents for exports during the pandemic. “When farmers’ fate entirely rests in agents with a little or no support from the government, agents have every chance of manipulating volumes, qualities and prices.”

The committee recommended the government appoint dedicated farmers’ representatives, preferably agriculture or BAFRA personnel, to mediate and assure transparency and accountability in the exports.

The economic contingency plan (ECP) has been implemented to address the challenges posed by the pandemic in key sectors such as tourism, construction, manufacturing and agriculture.

The emphasis in the agriculture sector is to boost the agriculture and livestock production to substitute import and promote export in the fiscal year 2021-22.

The budget is also allocated for constructions of warehouses, cold storage, pack houses and dry port.

The budget allocation for the financial year 2021-2022 under the road sector is Nu 5.836 billion (B) amounting to 7 percent of sector allocation. The allocation for granular sub base (GSB) and drainage is Nu 1.136B contributing 19.5 percent of the road sector.

However, the committee noted that in spite of the huge budget allocation for GSB, there were issues pertaining to the quality of works, choices of road, budget shortages and monitoring of development activities by the concerned agencies.

It recommended proper monitoring from dzongkhag tender committee by including gewogs in the committee to ensure their support.

“Due to varying lengths of farm roads in the country, it is literally impossible for the centrally allocated budget to meet the entire lengths of roads at a go,” Kinley Wangchuk said, adding that when such a situation arises, the fairly shorter roads should be completed by pooling budgets from the gewog and the dzongkhag.

The committee recommended that considering the geo-climatic condition of that specific area and experts’ recommendation, and most importantly based on resource availability, the gewogs should continue to decide whether or not to stick to GSB or choose black-topping or any other better options.

The government has taken extra efforts to allocate separate recurrent expenditure of Nu 336 million (M) for school stationeries for the students in the fiscal year 2021-22.

However, the committee observed that the ground issue was such that the allocated budget for the school stationeries remained insufficient due to re-appropriation. “Considering the fact that education needs utmost importance, the budget should be made dedicated under a capital head and be regulated strictly for the said purpose only.”

The government has presented a budget of Nu 80.483B with current budget of Nu 35.598B million and capital budget of Nu 44.884B.

The budget is predominantly formulated with an aim to ensure sustained economic stability for a resilient recovery underpinned by five objectives of maintaining public confidence, sustaining economic activities, transforming the health and education system, leveraging on ICT and innovation and enabling reform initiatives.

The House will continue deliberation on the Bill today.

By MB Subba 

Edited by Tashi Dema