In a move away from the regular annual state of the nation report, Prime Minister Tshering Tobgay reported to the joint session of the Parliament the progress that his government made in the 11th Plan.

Lyonchhen said that sovereignty and security of the nation has been strengthened with neighbouring countries, development partners, and participating in the UN peacekeeping operations.

The 11th Plan had the largest budget outlay of any Plan ever at Nu 225 billion (B), corresponding to an increase of 52 percent over the 10th Plan budget of Nu 147B. On the capital front, Nu 27B was met from domestic resources to finance the capital expenditure of Nu 115B.

Domestic revenue increased from Nu 88B in the 10th Plan to Nu 142B in the 11th Plan. The country received a total grant of Nu 70B, an increase from the Nu 50B in the 10th Plan. India alone provided Nu 50B most of which has been received, and other major donors include Japan, European Union, UN agencies, World Bank, and Asian Development Bank.

The fiscal deficit in the 11th Plan is Nu 2.6B or 1.3 percent of the Gross Domestic Product. “This is a remarkable achievement given that the 11th Plan is 52 percent bigger than the previous Plan which ran a deficit of Nu 4.1B or 5.8 percent of the GDP,” he said.

Rural development 

There are about 4,800 goong-tongs (empty households).

A total of 176 gewog centre roads have been blacktopped to make the roads motorable year round and Nu 4.5B was spent towards this effort. Funds to blacktop remaining 26 gewog center roads have already been identified.

In this Plan period, 5,400kms of roads were constructed and the country today has 11,200kms of farm roads. Each dzongkhag was also supplied with an excavator and a backhoe.

Lyonchhen said that road access has led to an unprecedented increase in the number of off-road utility vehicles; 8,000 such vehicles were purchased during the 11th Plan compared to 3,000 in the last Plan. About 147 gewogs have regular bus services.


One of the major achievements of the government, Lyonchhen said, was connecting 99.9 percent of households with electricity with 12,000 households connected to the main grid in the 11th Plan. The government also provided 100 units of free electricity to 92,000 rural households each month foregoing a revenue of Nu 355M every year.

About 5,101 households are connected to biogas and LPG distributed in 84 gewogs.


Today 5,545 villages are connected to cellular network. Lyonchhen said works to connect the remaining 50 of the 62 villages would begin next month. There are 692,000 cell phone users in the country.

The mobile network has also been central to the government’s ability to deliver public services through the 151 government to citizen services, he said.


Between 2013 and 2017, paddy harvest has increased from 75,000MT to 85,000MT; maize from 76,000MT to 90,000MT; potatoes from 50,000MT to 57,000MT and vegetable production from 58,820MT to 72,000MT, which is 113 percent of the national requirement.

In the same period, milk production increased from 31,000MT to 50,000 MT; egg production from 66M pieces to 116M, and fish from 55MT to 222MT.

“Income from agriculture increased from Nu 17B in 2012 to Nu 26 billion in 2017. This income is money in the hands of our people and important for poverty alleviation and prosperity,” lyonchhen said.

He said that every gewog should have a minimum of five power tillers as the government supplied 1,200 tillers. To prevent crop damage by wild animals 2,800kms of electric fencing was installed, 2,600kms of irrigation was built, 10,100 cattle heads distributed, 13,000 calves were born from artificial insemination of 34,000 cows, and supplied 1.1 million day-old chicks to farmers.

“All these increases in agricultural and livestock production would not have been possible without His Majesty’s land kidu and so far 123,000 beneficiaries have received land Kidu totalling 134,000 acres,” Lyonchhen said.

Rural loans

In the 11th Plan, the Bhutan Development Bank Ltd disbursed more than Nu 7B in loans to rural areas compared to Nu 2.2B in the 10th Plan. Rural Enterprise Development Corporation Ltd (REDCL) has approved 3,800 projects with loans amounting to Nu 1.1B.

To further improve access to finance for rural people, he said, His Majesty The King has commanded the implementation of a priority sector-lending scheme and as a result all banks now lend one percent of their total loans to agriculture and an additional one percent for rural based cottage and small industries.

Some 200 gewog banks were opened in the 11th Plan and 13,571 bank accounts were opened by rural based clients depositing Nu 178M as savings. In total, Nu 307M worth of transactions were recorded.


Poverty dropped further in the 11th Plan from 12 percent to 8.2 percent. Projects to reduce poverty were implemented in 75 villages and 18 dzongkhags, which constructed 837 houses, 777 toilets and 14 water supply schemes, formation of 94 self-help groups, and distribution of 260 agricultural and post-harvest machines.

Lyonchhen said that the biggest impact on efforts to alleviate poverty has been through His Majesty’s resettlement programme, which benefitted 245 households in Khenadang and Borangmo in Pemagatshel, Ney in Lhuentse and Bebji in Haa.

Even though there were no major disasters in the 11th Plan, His Majesty granted relief of Nu 975 million as compensation and kidu to the people and to repair damaged infrastructure. An endowment fund for crop and livestock has been established to compensate farmers in times of disasters and the rural life insurance scheme was increased from Nu 15,000 to Nu 30,000.


Local governments were given more fiscal autonomy and decision making.

Every gewog is allocated Nu 2M as gewog development grant annually at the cost of more than Nu 2B. This has funded more than 3,000 projects outside the 11th Plan.

Every dzongkhag was provided Nu 70M each year, which supported economic development projects and activities creating 8,200 jobs in the dzongkhags.

Salary for gups was raised to Nu 28,000, Mangmis to Nu 21,000, and tshogpas to Nu 9,800. Every gewog was given a utility vehicle.

Urban  development 

During the 11th Plan, Nu 15B was spent on improving urban infrastructure like roads, water supply and sewerage where 38 percent of the Bhutanese population lives. Thromdes for 16 dzongkhags and yenlag thromdes for all dzongkhags were approved by Parliament. The works and human settlement ministry has prepared urban plans for all thromdes.


The GDP has grown from Nu 100B in 2013 to Nu 180B today and the GDP growth figures reached 8 percent in 2016 and about 7 percent in 2017. “With the commissioning of the Mangdechu Hydropower Project by November this year, the economy will grow even further,” Lyonchhen said.

Inflation is under 5 percent, the country’s total trade value has reached Nu 104B and domestic credit has increased from Nu 57B in 2013 to Nu 105B.

Interest rates were reduced from an average of 13.41 percent in 2013 to 10.60 percent in 2017 and led to savings of Nu 3.2B for private businesses.

Domestic savings doubled from Nu 14.8B in 2013 to Nu 28.1B. Foreign exchange reserves have increased from USD 920M to almost USD 1.2B and the Indian rupee reserves stand at INR 18.6B.

External debt increased from Nu 95B in 2013 to Nu 170B today. Loans for hydropower projects increased from Nu 54B to Nu 132B in the 11th Plan. Non-hydro loans decreased from Nu 41B to Nu 37B during the same period.

“No debt was taken for establishment of central schools, procurement of off-road utility vehicles, power tillers and helicopters,” Lyonchhen said.

Revenue from taxes almost doubled from Nu 58B in 10th Plan to Nu 102B in the 11th Plan despite the government having reduced or waived several taxes by increasing personal income tax exemption slab from Nu 100,000 to Nu 200,000; exempting rural businesses from paying business taxes, and promoting domestic entrepreneurs and enterprises through fiscal incentives.

Trade deficit in 2012 was Nu 24.7B or 25 percent of GDP while in 2017, it was Nu 29.7B or 17.4 percent of GDP. Lyonchhen said that the trade deficit is still a cause for concern and the only sustainable solution is to diversify the economy to increase exports and reduce imports.

The government also renewed agreement with India on Trade, Commerce and Transit in 2016, and Bangladesh in 2014.

Bhutan’s Ease of Doing Business ranking improved from 142nd in 2012 to 75th in 2018.

In 2012, there were 13,068 Cottage and Small Industry (CSI) licenses and today there are more than 19,000 licenses. The number of trade license increased from 19,423 to 40,000. Medium and large industries have grown from 381 to 748.

As of 2012, 30 Foreign Direct Investment (FDI) projects were approved and in the 11th Plan, 38 FDI projects worth Nu 8.3B were approved with 16 projects worth Nu 1.8B starting operations.

In 2013, 116,000 tourists visited Bhutan. Last year alone, the country saw arrivals of around 255,000 (72,000 international tourists, and 183,000 regional) contributing Nu 8.4B compared to Nu 5.5B in 2013.

The number of tour operators rose to 3,100 from 1,100 in 2012; number of tour guides increased to 4,000 from 1,900 in 2012 and number of hotels increased to 1,400 from 900 in 2012.

Gross earnings from hydropower in the 11th Plan amounted to Nu 75.2B compared to Nu 45.85B in the 10th Plan. “The earnings increased mainly on account of increase in export tariff,” Lyonchhen said.

Electricity export tariff increased for the Tala and Kurichhu in January 2017 from Nu 1.98 to Nu 2.12 per unit and for Chukha hydroelectric plant once in 2014 from Nu 2 to Nu 2.25 per unit and again this year to Nu 2.55 per unit.

Of Nu 75.2B in earnings from hydropower, Nu 17.93B was used to pay back the hydro loans. “The Kurichhu Hydropower loan was also fully paid back in 2016, and Tala Hydropower loan will be cleared this year,” he said.

After the liquidation of Tala’s loans, the government will have an additional Nu 2.58B.

The Dagachhu Hydropower project completed in 2015 and construction of Kholongchu project began the same year. Mangdechu Hydropower project will be completed later this year while Nikachhu Hydropower project started in 2016 and as of May this year, 84 percent of Punatsangchhu I Hydropower project and 77 percent of Punatsangchhu II Hydropower project are completed. “Discussions are currently underway with the Government of India to start construction of the 2585 MW Sunkosh Hydropower Project,” he said.


Overall unemployment dropped from 2.9 percent in 2013 to 2.4 percent today. Youth unemployment, which was 9.6 percent in 2013 has risen to 10.6 percent on account of the increasing number of students completing school, he said.

A total of 74,000 new jobs in the civil service, corporations, armed forces and the private sector with more than 5,000 vacancies. The labour ministry directly facilitated the employment of 32,000 youth and spent Nu 1.2B to support various employment schemes benefiting 27,000 youth. The nine State Owned Enterprises provided 5,500 jobs and still have 500 vacancies.

In the past five years, 8,200 jobs were created in the dzongkhags. The government is already supporting 1,800 youth who have taken up farming in their communities. While there are 3,208 unemployed youth in urban areas, corporations and the private sector have more than 5,000 vacancies.


The overall literacy rate is 71.4 percent while youth literacy rate is 93 percent. In the 11th Plan, the focus on education was on school reforms (63 central schools and 282 ECCDs established), curriculum review, and professional development. The teacher-student ratio is 1:18. In the current Plan, all teachers including those in private schools were provided professional development at a total cost of Nu 215M. Of the 18 colleges in the country, five were established in the 11th Plan.


There are 32 hospitals, 208 BHUs and 118 ambulances in the country.  The number of doctors increased from 203 in 2013 to 345 in 2018 and except for Gasa and Haa, all district hospitals now has a minimum of three doctors each. The number of nurses and health assistants has also increased from 1,254 in 2013 to 2,364 in 2018 with most BHUs having at least one female health assistant. The helicopters made 368 emergency evacuations. The Health Trust Fund has doubled from Nu 1.2B to Nu 2.3B.

 Road transport 

Lyonchhen said that the 385 km East- West highway widening with a budget of Nu 6B is almost complete.

The constructions of the 76km Gyalpoizhing-Nganglam highway, the 29km Damchu-Chukha bypass, and the 75km road between Haa and Samtse have been completed. Black topping is underway for the Haa-Samtse highway.

The construction of the 80km secondary national highway between Dagapela and Dalbari is 60 percent complete. Works on the Southern East-West highway began this year and will connect Langchenphu to Samrang in Samdrupjongkhar and Chokorling to Dewathang.

Of the 205 gewog centre  (GC) roads, 176 have been blacktopped and of the remaining roads that have not been blacktopped, nine GC roads are under construction while funds have been earmarked for blacktopping an additional 17 GC roads, works for which will commence very soon, he said.

He said that the government exempted excise on price of fuel and thus, diesel price dropped by Nu 7.26 a liter. The price of petrol also reduced by Nu 9.82 a liter. Paro international airport was expanded and improved which saw an increase in passengers from 182,000 in 2012 to 314,000 in 2017.

Domestic airports in Bumthang, Gelephu and Yonphula saw an increase in domestic air travel from 970 passengers in 2012 to 12,000 in 2017.

The Royal Bhutan Helicopter Services earned Nu 163M in 2017 resulting in a profit of Nu 89M.


Major renovation works for several Dzongs such as Trashigang, Gasa, Lhuntse, Paro Rinpung and Ta Dzong and Trashiyangtse were initiated and completed. The Government also completed the construction of the Tango Buddhist College and a Hindu Temple in Samtse. In addition, two Hindu temples are currently under construction in Thimphu and Gelephu. “Another big achievement is the renovation of 2,000 chortens across the country,” Lyonchhen said.


The National Forest Inventory conducted in the current Plan found that forest cover stands at 71 percent. Inventories showed 96 snow leopards, and 103 tigers. The government approved and adopted more than 12 environment related policies and strategies in the 11th Plan, launched Green Bhutan Corporation Limited in 2017 and established Bhutan for Life Fund.

Good governance

The government introduced the Government Performance Management System (GPMS) in the 11th Plan, signed the Annual Performance Agreements (APA) and increased salary for the civil servants.

To reduce the legislative burden on citizens, the Government instituted a Law Review Task Force, whi ch has reviewed 126 Acts. Lyonchhen also informed the Parliament on the draft 12th Plan.

Tshering Palden