The issue of setting a precedent in preparing the budget by a sitting government for a fiscal year of the next Plan saw an extensive debate at the National Assembly yesterday.
This resulted in the house rejecting the capital budget for the 2018-19 fiscal year. The house instead approved the capital expenditure for the next six months to be utilised until the next government is formed. The current expenditure of Nu 29B is approved for the whole fiscal year 2018-19.
The debate emerged as the tenure of the government will end on August 2 and the first year of the 12th Plan will commence from July 1. The third elected government will be constituted only by November, which leaves a time gap of about six months for the next government to approve the budget for the first fiscal year of the 12thPlan.
National Assembly speaker Jigme Zangpo said it would take until the fifth elected government to correct this issue.
To address this time gap, government on June 18 proposed an interim budget of Nu 43.5B for the fiscal year 2018-19. The finance committee of the house reviewed the budget report and presented it yesterday.
The review stated that an interim budget for the fiscal year constituted of recurring expenditure, on-going activities that would spillover to the next fiscal year, debt servicing and implementation of critical regular activities to ensure public service delivery. “The committee was also informed that the finance ministry had cross-checked and ensured that activities were on-going projects under donor and government financing,” the report stated.
The committee also took into account the ministry’s report that the new government will have the responsibility to amend the interim budget.
However, the Opposition Leader Pema Gyamtsho (PhD) asked whether the current Parliament has the authority to pass the budget for the first fiscal year of the 12th Plan that is yet to be endorsed.
“Are we not interfering in the future government’s business?” he said. “We have to respect the democratic norms and principles,” he said adding that the Opposition will not support if the budget is for fiscal year 2018-19.
However, he said the opposition acknowledges that the importance of critical and spillover activities to the people. “There are dzong reconstructions and renovation projects going on, the widening of the east-west highway and debt needs to be serviced,” he said.
He suggested endorsing an interim budget for six months after which the new government can formulate its own annual budget. “This is not a good precedence in democracy,” he said.
Pangbang MP, Dorji Wangdi said that the government’s term ends on August 2. “It does not have the authority to spend a chheltrum even for one day after its tenure ends.”
This, he said is the basis of five year plans and tenure of every government being set at five years. “We should respect the time period,” he said adding that necessary on-going projects should be allotted with finances for six months to ensure that critical public service delivery is not affected.
“If activities are not completed by June 30, it spills over to the 12th Plan and becomes a part of the new Plan by default,” he added.
Opposition leader also said that when activities spill over to the next Plan, it is indicative of underestimation resulting from improper planning.
Finance minister Namgay Dorji said the spillover is not happening for the first time. He said that Nu 1.5B worth of activities had spilled over to the 10th Plan and Nu 5B from the 10th to the current Plan. About Nu 5B is estimated to spill over to the next Plan.
Education minister Norbu Wangchuk said the government is aware that it must refrain from encroaching into the business of the next government. “But it is also our responsibility to hand over to the next government a dynamic 12th Plan although it is their mandate to consider or review it,” he said.
He said no capital works drafted in the 12th Plan is included in the interim budget and that the next government can review this soon after they assume office. Without an interim budget, he said critical works would be affected.
Economic affairs minister Lekey Dorji added that the current expenditure would have to be spent anyway irrespective of which party forms the government. “Likewise, debt repayment has to be made and regular critical activities like procurement of medicine also must be undertaken by any government,” he said.
Some 11 more members raised their hand to speak but the debate was interrupted by a tea break. The cabinet ministers stayed inside the hall for about five minutes during the tea break.
Soon after the session resumed, a consensus was reached to approve the capital budget for six months. The initial capital budget is estimated for the whole fiscal year of 2018-19, which is about Nu 10.7B.
Lyonpo Namgay Dorji said whether the budget is for the whole fiscal year or for the next six months, the government has nothing to gain and neither is there a conflict of interest. “The change will not make a huge difference.”
Tshering Dorji