50 percent of funds for the 12th Plan received in the first half

MB Subba 

The government has been receiving funds from development partners as per the commitments despite the impact of the Covid-19 pandemic on the world economy.

The government received a total of Nu 31 billion (B), which is almost half of the total development partners’ support for the 12th Plan, at the end of the first half of the five-year period in December 2020.

This has been revealed in a government report on Bhutan’s status as a least developed country sent to the United Nations recently.

In total, Bhutan’s development partners have committed about USD 865 million (M), which is equivalent to Nu 63B for the 12th Plan.  The Plan has a total outlay Nu 310B, about 20 percent of which will be financed through external borrowing and grants.

Finance Minister Namgay Tshering claimed the government had a good reputation for implementing activities assisted by development partners. “We’re receiving the fund on time despite the Covid-19.”

He said a majority of funds come from India, which has committed Nu 45B for the 12th Plan. “The funds received for the 12th Plan excludes the assistance received for hydropower projects.”

Lyonpo Namgay Tshering the funds received under the 12th Plan do not include those received for Covid-19 control measures.   

But according to the government, the external assistance received for Covid-19 pandemic measures has not only capacitated Bhutan in handling and managing the pandemic but also helped in the implementation of the 12th Plan.

The government has received financial and in-kind assistance from a range of multilateral and bilateral donor agencies to combat the impacts of the pandemic.

However, while about 50 percent of the funds were received, the implementation of the activities has not been proportionately achieved, analysis of budget performance reports of the finance ministry indicates.

The government has allocated about 31 percent of the 12th Plan budget for the fiscal year 2020-21 to offset GDP loss.

The actual capital expenditure in the first half of the fiscal year 2020-21 was Nu 6.176B, which is 16 percent of the total capital budget of Nu 38.88B allocated for the fiscal year.  This means that about 84 percent of the capital budget remained unused at the beginning of the second half.

Lyonpo Namgay Tshering, however, said works were at various stages of implementation and that capital works would take some time. “Some are at the estimation stage while others are at the implementation stage,” he said, adding that activities were being re-prioritised.

The budget performance in the second quarter of the current fiscal year was higher than that of the first quarter mainly because the implementation of the activities usually picks up from the second quarter onward, according to the ministry.

The estimated GDP loss in the first six months of the Covid-19 crisis was almost Nu 5B.  Accordingly, the government injected additional money of Nu 5B into the economy through various activities, such as frontloading of 12th Plan activities.