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Even as the Covid-19 protocol has been normalised, some quarters express concerns as to whether the country is in a financial jeopardy.

One of the major and immediate challenges amid the pandemic has been meeting the current expenditure from the domestic revenue, which has dwindled drastically, although the capital expenditure is being financed through borrowings.

According to a source, the parliamentary budget could be slashed significantly in view of the limited domestic revenue, which must cover all the current expenditure.

Reference was also made to the prime minister and the entourage in Samdrupjongkhar carrying their packed lunch to save the expenditure, according to the source.



However, an official from Prime Minister’s Office said that their decision to carry their packed lunch was not a “desperate” cost-cutting measure. The official added that the measure would save time and avoid the inconveniences.

As part of its cost cutting measures, the Royal Civil Service Commission (RCSC) on May 16 decided to do away with daily subsistence allowance (DSA) for RCSC-administered in-country short-term training (STT) programmes, which is paid at the rate of Nu 2,000 per day.

The government disbursed Nu 94.624 million for SST in the fiscal year 2020-21.

Such measures, the source said, indicated that the economy was in “jeopardy”.



However, Finance Minister Namgay Tshering said that doing away with the DSA was the RCSC’s “stand-alone decision”, which the government was not involved in. The RCSC’s decision would not apply to all the public sectors.

He said that ideally the government’s consensus was required in such budgetary decisions.

The finance minister, however, said that there was no financial crisis but that certain issues needed to be corrected. “We will be in a crisis only if we are not able to finance the current and capital activities, which is not the case,” he said, adding that the government would apply prudence.

Lyonpo Namgay Tshering said that there would be no austerity measures although he did not reveal the priorities of the upcoming annual budget.



However, certain cost-cutting measures including the postponement of the activation of salary indexation and transfer of civil servants without transfer benefits are being implemented. The option to monetise the vehicle quota also remains suspended.

Speaker Wangchuk Namgyel said that the parliamentary budget should not be decreased, as doing so would affect the institution’s functions and the quality of debates.

“However, I have not seen whether or not the budget would decrease,” he said, adding that the lunch for MPs during the session would be modest.

The Speaker said that the 21-day cap on the DSA of MPs still remained in force and parliament was facing budget shortages.



The tax revenue decreased by almost 24 percent in the past three years, according to official data.

According to some officials, some of the fiscal measures, including the reduction in the customs duty in the summer session, came at a “wrong time”.

According to the finance ministry’s estimates, about 89 percent of the 12th Plan capital budget would be exhausted by the end of the current fiscal year. This means that not many Plan activities would be left for the fiscal year 2022-23.

The finance minister on BBS on May 19 said that the government was projecting GDP for 2021 will increase to four percent.



Lyonpo said that the country’s economy was recovering; the agriculture and construction sectors had played a major role to offset the impact of the pandemic.

However, some observers say the challenges of meeting both capital and current expenditures would remain due to the high rates of inflation.

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