Bhutan budget lays stress on sustaining economic activities amid pandemic

Of the total outlay, the proposed capital expenditure is Nu 38.32 billion (USD 52,93,27,955) or 48 percent of the overall budget and the recurrent expenditure is Nu 35.598 billion (USD 49,17,27,989) or 44 percent of the total budget. The remaining budget has been appropriated for repayment of loans.

The capital budget for the fiscal year comprises 33 percent of the total 12th plan capital outlay, which is one of the highest during the plan period.

Presenting the budget, Finance Minister Namgay Tshering said as the pandemic continued to pose serious risks to health and the livelihoods of people, the government provided necessary funds for ensuring public health and safety, maintaining public confidence and macro-economic stability.

Accordingly, the government has earmarked a budget of Nu 3 billion (USD 4,14,40,080) for Covid-19 related activities, including maintenance of quarantine facilities, purchase of test kits, and vaccines.

Fiscal deficit, which signifies the gap between the government’s revenue and expenditure, is estimated to widen to 8.59 percent of the Gross Domestic Product (GDP). The government’s expansionary fiscal measure is aimed at helping economic recovery besides responding to containment measures.

“As a prudent financing strategy and to ensure debt sustainability, the government shall resort to borrowings at lowest possible costs only after exhausting the possibilities of obtaining the required financing in the form of grants,” Namgay Tshering said.

The government has estimated its total resources for the fiscal year at Nu 56.765 billion (USD 78,41,15,380) This includes domestic revenue of more than Nu 35.6 billion (USD 49,17,55,616), other receipts of Nu 640.27 million (USD 88,44,280) and external grants of Nu 20.525 billion (USD 28,35,19,214).

The domestic revenue is expected to grow by seven percent during the fiscal year mainly on account of estimated growth from income taxes, followed by increased consumption taxes.

The economic growth for the fiscal year 2021-22 is projected at 4.1 percent.

The social service (health and education) sector has been allocated the highest budget allocation, constituting 30 percent of the total oulay followed by 27 percent each for economic and public services sector (agriculture, communications, housing, energy, mining, manufacturing and roads) and 24 percent for general public services.

The budget also aims to transform the health and education systems.

The major activities under the health sector include development of health infrastructures such as ancillary works at Gidakom, an additional hospital wing at Jigme Dorji Wangchuck National Referral Hospital (JDWNRH) and a dedicated water supply for JDWNRH.

Besides the flagship programs, the government has provisioned budget to provide scholarships to Class XI and XII students in private schools, undergraduate scholarships, and capacity development for the universities.