National Assembly’s resolution to allocate capital budget for six months amounting to Nu 7.24B, including the loan repayments has led to confusion in the National Council.
Earlier when the finance minister presented the interim budget for 2018-19, about Nu 43.5B was proposed of which current expenditure was estimated at Nu 29B and capital at Nu 10.7B. After much deliberation on the basis and legality, the house settled to allocate capital budget for only six months, until the next government is formed.
The new interim budget stands at Nu 36B after the capital expenditure was slashed by half. The budget for current expenditure (Nu 29B), however, remains the same for the 2018-19.
While presenting the interim budget, the finance minister said that the capital expenditure was only for the spill over works, externally funded projects and critical regular activities. “No new activities are included in the interim budget,” he said, adding that it was also not appropriate for the current government to allocate budget for the 12th Plan, which begins next month as the government’s tenure end in August.
However, eminent member Phuntsho Rabten asked whether slashing the capital budget for the spillover works made sense as there was contractual obligation.
“For instance, if a project completes in six months and the budget is slashed, how can the government pay the contractors,” he said.
Eminent member Dasho Tashi Wangyel, who is the chair of the economic development committee, said that capital budget was slashed by 50 percent. Should the finance ministry redo the whole valuation based on the progress of the project, it would take another three months. “However, there has been a political compromise of sort,” he said.
Thimphu’s council member Tshewang Rinzin said that dividing in two halves of the allocated budget for capital works was not technically correct.
The house derailed its discussion on whether allocating the capital budget for six months was correct or not and its implications. Most were of the view that six months of interim budget would cause inconvenience.
Phuntsho Rabten clarified that he was neither supporting nor objecting to the duration of the budget. “I am questioning the process of allocation and whether it is technically right to slash every capital budget by half,” he said.
During the break, members got in touch with the officials from the ministry. “I was told that, if the estimated allocation turns out higher than the actual budget, the agencies would use the fund from their reserves,” Phuntsho Rabten said adding that whatever additional expenses incurred could be proposed as a supplementary budget in the following fiscal year.
National Council unanimously passed the interim budget with all 23 ‘yes’ votes.