At the National Council yesterday, the members suggested that the government could do away with 100-unit electricity subsidy in rural areas as the nation looks to cost-cutting measure in the wake of Covid-19 pandemic.
Finance Minister presented the National Budget Report for the FY 2020-21 and introduced the Budget Appropriation Bill for the FY 2020-21 and Supplementary Budget Appropriation Bill for the FY 2019-20 to the House.
After the government introduced several temporary budget policies to meet the recurrent expenditure from internal resources, it has been able to save Nu 3 billion.
The move could save the government Nu 1.5 billion yearly, according to the eminent member of the House, Phuntsho Rapten.
The government has allocated Nu 1,508 million subsidy for 100-unit free electricity in the fiscal year 2020-21. House member Ugyen Tshering asked whether any study was carried out to establish how many rural households had benefitted from such subsidies.
“While the provisions are helpful for the needy, isn’t it time we changed the provisions considering there are rural elites?” he asked.
And he added that most of the 100-unit free electricity was not used, wasting the government resources.
The domestic electricity tariff for the three-year cycle period began from 2016-17 with the progressive annual revision and regressive subsidy allocation.
A hundred units of electricity was more than enough to power rice cooker, water boiler, mobile phone and a few light bulbs for a month, members said.
Finance Minister Namgay Tshering said that the country’s economy was different from other countries—government spending and investment trigger the country’s gross domestic product.
The rural electricity subsidy, Lyonpo said, was necessary to help people buy essential items, which also kept the cash flow within the country’s economy. “If people do not have cash, there will be economic disruptions. That is why the subsidy is relevant today.”
About 117,000 households have so far benefited from the subsidy, Lyonpo said.
The allocation of the free electricity, he said, was based on the Election Commission’s boundary delimitation and would require reviewing thromde, dzongkhag and gewog delimitation if the government is to establish who should and should not get the subsidy.
Bhutan Electricity Authority reviews electricity tariff after every three years. The tariff for the low voltage block I (0-100 units), for both rural and urban consumers, is maintained at the existing rate. This means that rural areas will still enjoy free electricity and urban users consuming the same amount of power will still be charged the current rate of Nu 1.28 a unit for the next three years.
For the fiscal year 2020-21, a total budget of Nu 2.130 million has been provisioned as subsidies.
House members Sangay Dorji and Ugyen Namgay said that deferring leave travel concession payments and option to monetise the vehicle quota was inconsiderate of the civil servants’ needs.
Had the government come to this economic situation, they asked?
If the government was conscious of measures to reduce expenses, Sangay Dorji said that the waste and stray dog flagship programme could be deprioritised.
On June 6, the National Assembly’s economic and finance committee also recommended reprioritising Nu 248.54 million allocated for waste and stray dog management flagship programme to productive activities.
The House, however, decided to retain the proposed budget for implementation in the new fiscal year in view of the risks that waste and stray dogs could pose to public health.
Finance Minister said that the flagship programme was important as it included components like infection control, relevant during the pandemic where infectious waste is produced in huge numbers.
He said that incinerators were a requirement for public safety. The waste is either dumped at the landfill or burnt.
The House will continue the budget deliberation today.