Dechen Dolkar

Despite the National Assembly’s endorsement in July 2024 to revive the Constituency Development Grant (CDG) under the new name of the Priority Development Fund (PDF), the government has now backtracked on the proposal, citing concerns over its feasibility, potential legislative conflicts, and operational challenges

The CDG aims to allocate a portion of the national budget to constituencies, financing short-term, ad hoc development projects initiated by local citizens.

During the first session of the fourth Parliament, the House Committee recommended that the government allocate an adequate budget outside the dzongkhag level. It also suggested formulating guidelines for the allocation, utilisation, monitoring, and evaluation of activities.

Presenting the review of the proposal to reintroduce the CDG yesterday in Parliament, Finance Minister Lekey Dorji explained that the PDF proposal could create constitutional issues related to MPs’ roles in both approving and overseeing development funds, including risks of unequal fund distribution.

The finance minister warned that reintroducing the CDG could compromise free and fair elections, thereby undermining public trust in the electoral process.

He also pointed out that local governments (LGs) might struggle with the capacity to manage the funds efficiently, given the substantial allocation already provided in the 13th Plan. In the 13th Plan, Nu 72 billion has been allocated to LGs. For the fiscal year 2024-25, the budget is Nu 38.24 billion, with Nu 15.17 billion allocated to LGs.

Lyonpo further highlighted concerns raised in the 2012 Royal Audit Authority and Anti-Corruption report, which revealed that previous CDG allocations were often made without considering factors like urgency, poverty levels, or the geographical needs of gewogs. As a result, the funds were sometimes distributed equally as entitlements, without addressing the most pressing development needs.

In addition, there were issues of non-compliance with CDG guidelines, including MPs approving funds for non-permissible items and gewogs failing to submit required work plans and periodic progress reports.

The MoF’s objections to CDG sparked a heated debate in Parliament, with several MPs criticising the ministry for not aligning its report with the resolutions passed during the first session.

The MP from Lingmukha-Toedwang Constituency in Punakha, Namgay Wangchuk, asked the MoF to present a follow-up report during the summer session to clarify why the PDF could not be implemented as planned.

Deputy Speaker Sangay Khandu said that that the legal concerns around CDG had already been discussed during the first session and that the ministry was expected to present guidelines on the allocation and evaluation of activities as per the resolution.

According to Section 103 of the Rules of Procedure of the National Assembly of Bhutan, 2022, if the resolutions of a motion are not implemented by the end of the subsequent session, they will carry over to the following session unless the parliamentary tenure ends.

The Speaker said that the issue will be discussed in the upcoming Parliament session, clarifying that the Attorney General could be consulted if there were legal concerns regarding constitutional or procedural issues.

The MoF recommended using existing funding systems, such as the Resource Allocation Formula and annual block grants, rather than creating a separate PDF.

Background of CDG

The CDG was introduced by the first elected government, with Nu 2 million allocated per constituency each year. However, it was replaced with the Gewog Development Grant by the second government and later renamed the block grant during the third government’s term.

During the first government’s term, opposition MPs of People’s Democratic Party and members of the National Council had argued that the CDG was unconstitutional, which could encourage political corruption, as it provided an incentive for MPs to use development funds to sway voters in upcoming elections.

The Election Commission of Bhutan also wrote to the then Prime Minister, asking the government to revoke the CDG.

Between Fiscal Year 2009-2011, a total of Nu 174.36 million was allocated for the CDG, of which only Nu 152.50 million was utilised, leaving Nu 21.86 million (12.53 percent of the budget) unspent. This inefficiency highlighted capacity issues within gewogs, which often struggled to plan and implement projects on time, leading to blocked funds that could have been better utilised elsewhere.