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Cabinet approves Nu 47B budget for 2018-19

The Cabinet in its last meeting endorsed Nu 47B budget for the first fiscal year of the 12th Plan (2018-19) against Nu 43.7B interim budget approved by the last Parliament despite the loss of six months’ time in the electoral process.

The first fiscal year of the 12 Plan is supposed to begin from July 1 this year for the period until June 30 next year. However, the previous government’s tenure gobbled up the first month of the 12th Plan. By the time election was called and the new government was formed, half the period of the 12th Plan’s first fiscal year was wasted.

For this reason, the former government had also proposed a budget for the 2018-19. However, the Opposition Party questioned whether the government had the authority to pass the budget of the 12th Plan, which was the new government’s priority.

Following an extensive debate in the last session of the second Parliament, a consensus was arrived at approving an interim budget of Nu 43.5B for 2018-19. The current budget was allotted Nu 29B and the capital budget, which comprised of the spillover activities from the 11th Plan, was estimated at Nu 10.7. The remaining Nu 3.6B and was earmarked for loan repayment and another Nu 288M for lending.

The lapse in planned period will continue in future.

During the meet-the-press session yesterday, Agriculture Minister Yeshey Penjor said the government was working to address the issue.

In the 2018-19 budget, which is subject to the approval of the Parliament, the status quo on the current expenditure of Nu 29B is being maintained. However, the capital expenditure has increased from Nu 10.7B to Nu 18B. This means besides spillover activities from the 11th plan, the new government will initiate a few new projects in the current fiscal year.

Lyonpo Yeshey Penjor said that the country would see substantial investments and activities in the 2019-20 and 2020-21 fiscal years since the 12th Plan outlay was Nu 319B, the highest in the history.

Compared with the 2017-18, the last fiscal year of the 11th Plan, domestic revenue in the first fiscal year, 2018-19 is projected to increase by 4.4 percent to Nu 35.8B. However, revenue from the indirect tax is expected to decline by 25 percent since the government will not get excise duty refund from India after the implementation of GST.

External grant too is on account of ongoing externally funded projects. India’s assistance on financing for construction of Sarpang and Pemagatshel Dzongs, Gyaltsuen Jetsun Pema Mother and Child Hospital, and Northern East-West highway widening project.

As per the interim budget, the domestic revenue and grants, which forms the total resource available for the fiscal year 2018-19, comes to about Nu 40.7B.

The second Parliament resolved that the new government would have the authority to amend the interim budget.

The government in the 12th Plan will change the Gewog Development Grant to annual grant for the local governments.

Lyonpo Yeshey Penjor said that in the earlier framework, the local leaders had to come to the capital to discuss the budget every quarter and Gross National Happiness Commission (GNHC) and finance ministry dictated the budget utilisation and activities.

He said that under the new framework, finance ministry would release the budget every quarter without the officials having to visit the GNHC and finance ministry. The local government will have the authority to use the funds as per their convenience but within the specified projects and activities.

Tshering Dorji

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