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GoI assures early release of funds

Reiterates continued support in the 11th plan

Bilateral Relations: The government of India has assured the Bhutanese government that the remaining funds for the 10th plan, amounting to Nu 5.7B, will be released at its earliest.

Indian foreign minister, Salman Khurshid, who was in Thimphu on January 14-15 to review bilateral relations and strengthen existing co-operation, gave this assurance, economic affairs minister Khandu Wangchuk said yesterday.

Salman Khurshid also assured the Bhutanese government that the Rs 4B from the government of India standby credit facility, the ceiling for which was raised to Rs 10B last year, will also be released at the earliest.

“We requested GoI to release Nu 5.7B at the earliest because, although the 10th plan goes on until June, there won’t be much work on the development front after March, with everyone in election mood,” Lyonpo Khandu Wangchuk said.  The minister said the government wants to complete the 10th plan activities ahead of time.

Records with the Gross National Happiness Commission show that, of the Nu 34B committed by government of India for the 10th plan, Nu 28.2B (83 percent) has been received so far.  The remaining Nu 5.7B has been pending for more than six months for projects with the Royal University of Bhutan, education, roads, civil aviation and judiciary.

“The Indian external affairs minister’s visit at a time of sensitive economic and political situation in India shows the importance of the two governments’ relations,” Lyonpo Khandu said. “GoI suggested to look at innovative ways to enhance economic cooperation and partnership, in addition to development cooperation, given the changing circumstances, both in India and Bhutan.”

To this end, both governments decided to create a forum that would specifically work toward business and industrial development. “GoI expressed that Bhutan’s peaceful and secure environment is viable for their investment,” Lyonpo Khandu Wangchuk said.

During the visit, the Bhutanese government also requested for the early release of INR 3B excise duty for 2010-11 and INR 9B additional fund for the 1200MW Punatshangchu I, 1020MW Punatshangchu II and 720MW Mangduechu hydropower projects, which are under construction.

“We also asked GoI to accelerate the implementation of the six hydropower projects that are yet to start construction, and signing of agreements soon would be the first step towards the acceleration,” Lyonpo Khandu Wangchuk said. “Amochu (540MW) and Sankosh (2585MW) will be implemented within the first half of the year.”

The two governments also agreed to do away with the double taxation system, sign a memorandum of understanding for the Bhutan institute of medical sciences for GoI’s financial and technical support, and establishing 11 new land custom stations. “Of the 11, seven will be seasonal, like during orange season, benefiting trade between the two countries,” said Lyonpo Khandu.

Bhutan and India over the years have been trying to hammer out a solution to the double taxation system, so that businesses operating in both countries do not end up paying taxes twice.

The Indian delegation that was invited by the government also not only assured that development activities will not be hampered or slowed down on account of non-availability of funds, but also expressed continued support for the 11th plan development activities.

By Passang Norbu 


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