The country’s budget for the 2016-17 fiscal year has been revealed.
One of the highlights of the budget includes the government’s proposal for a Dzongkhag Development Grant (DDG) of Nu 7 million for each dzongkhag.
This will be in addition to the Gewog Development Grant (GDG) of Nu 2 million.
The is another needed move in the effort to decentralise. Financial responsibility is a core requirement of the process as local works will be able to be executed more effectively.
Eventually, the central government should only be responsible for national affairs or overall policy like international affairs, monetary policy, national-level public services, and for setting standards.
Local governments, from the dzongkhag level down, should be involved in providing infrastructure and services.
Local governments will now have direct control over both budget and execution of certain works.
This will include the autonomous central schools, flood mitigation and preparatory work for yenlag thromdes, human resource development, health related work including awareness programmes, and construction of security walls in border towns.
However, there is a need to ask whether it is practical to provide a fixed amount of Nu 7 million to each dzongkhag.
The dzongkhags vary in size and population. Some dzongkhags may require more money than others.
It is also important to ensure that the funds are not spent on projects that are already funded by other agencies.
What is now also important is that responsibilities between the central and local government are clearly defined.
Last year, the National Council found that over 80 percent of the GDG was spent on purposes it was not intended for like construction and maintenance of farm roads, bridges, mule tracks, and cultural promotion, among others. In one instance, the fund was even used to construct an archery range.
The GDG was meant for creation of income and employment generation activities.
The assessment also found that local leaders did not consult the public for many of these works.
We cannot have this repeat with the DDG.
Besides the need for clear responsibilities and guidelines for the dzongkhags to follow on where the DDG can or cannot be spent, it must also be ensured that expenditure is conducted on a public consultative basis.
The experience with the GDG also raises the need for more transparency in the system. The central government must also play an oversight role and monitor how the grant is being spent. The public too need to have access to information on how the money is being spent.