Central bank’s advice to govt. with regard to restrictions on housing and transport loans
RMA: The government could lift restrictions imposed on housing and transport loans by June this year, provided it is followed by what central bank officials call “prudent fiscal measures”.
The central bank, Kuensel learnt, had advised the government to look into lifting the restrictions soon. This might possibly happen after the June parliament session.
“We’re in favour of lifting the restrictions as soon as possible, but with proper taxation measures, which the government must work out soon,” said a central bank official.
He said, restrictions were put in place as a short-term measure, but it has been in place for almost two years. Outright banning of public facility is not doing anyone good, and, as of now, the economy has stabilised to some extent, he said.
Although details were not revealed, the central bank had suggested raising import tax, “by a huge margin”, on vehicles to the government.
Today, vehicles above 1,800 cubic capacity (cc) are levied 45 percent sales tax and custom duty, and another 20 percent green tax. Sales tax differs according to vehicles engine power or cc.
According to the revised sales tax and customs duty, 2011, vehicles up to 1,500cc, are levied a 40 percent sales tax and customs duty, 45 percent for vehicles between 1,501 and 2,500cc and 50 percent for vehicles above 2,501cc.
Bhutan enjoys one of the lowest taxes in the world. Its tax to GDP ratio, as of 2012-13, was around 15 percent, which is one of the lowest. Tax to GDP ratio, according to the central bank official, should be at least 45 percent.
“We don’t have a fiscal policy because of that,” he said.
Early last year, a United Nation’s survey reported that countries like Bhutan, Bangladesh and Nepal enjoyed one of the lowest taxes in the world. While this has been constraining government revenue, it has also not helped in reducing inequality.
“Luxury items, like vehicles, must be taxed heavily, and tax money should be used to provide better public transportation services to the lower and middle classes,” he said.
Meanwhile, local economists say that, if restrictions were to continue for another indefinite period of time, it will be difficult for the government to achieve a 10 percent annual average economic growth rate, as pledged in their manifesto.
The economy achieved only 4.6 percent growth rate in 2012, which was largely attributed to the restriction. According to the National Statistics Bureau, the meagre growth rate was because of a decreased investment in the economy, as a result of freeze on credit.
The World Bank has also said that economy will grow at an average rate of 6.9 percent, only if the government addresses the present challenges facing the economy, like the freeze on credit.
However, economists also argue that lifting the restrictions would mean going back to square one, where the economy will once again experience huge shortage of rupees and enter into costly borrowings from India.
An economist said, although the central bank has managed to save Rs 6.9B in its reserve, it was mainly because the government was yet to start off on its major capital works, and once capital investment takes place, it will start draining the rupee reserve.
By Nidup Gyeltshen
The increasing number of dried/drying up sources has numerous worrisome implications
Resource: The drying up of water sources for the last few years in Trashigang has begun to worry both villagers and district officials.
Gewog statistics show that about 12 gewogs, including Sakteng, Phongmey, Bartsham, Yangnyer and Lumang, have reported dried and drying water sources.
The volume of four water sources in Kosphu Gonpa and Khothorong in Lumang have reduced, say villagers, while five villages in Yangnyer, including Changzey, Lungdama and Demkhar, have also reported a similar trend. Six water sources in Taktapa under Yangnyer, including Chaypheyri, Draksingri and Shokangri, have also dried up in recent years.
“The source in Braksingri that provided both drinking and irrigation water dried up naturally in 2008,” Taktapa tshogpa, Seldon, said.
Draksingri, which once supplied enough water to irrigate over 20 acres of paddy fields, besides drinking water for 40 households, is today barely enough to serve one household.
“Similarly, other water sources in villages like Shokangri have also dried up now,” Seldon said.
Bartsham gup, Sonam Dorji, said water sources in his village dried naturally. He said the drying of water sources is not because it was winter, or an increase in the number of people.
“While some sources dried up permanently, the remaining ones are drying up by the year,” Sonam Dorji said.
The drying of water sources in Taktakpa has left over 20 acres of wetland barren since 2007. “We had to leave the fields fallow after Braksingri water source dried up,” a villager from Taktapa, Sangay said.
Drying of water sources, Sonam Dorji said, would have serious implications on the import-driven Bhutanese economy.
“More people would be pushed to depend on imported rice, when an increasing number of people are forced to leave their wetlands fallow,” Sonam Dorji said.
If water sources dry up, more villagers will be forced to migrate to make a living, he said.
“Worse would be resettling villages,” he said.
Impact of water sources drying up could also stress the government coffers when, for instance, the government invests millions in getting a new rural water supply for Taktapa from Ngambenang. “Getting water from nine kilometre distance incurred millions,” Yangnyer gup, Karma, said.
It also exerts labour pressure on villages struggling with labour shortage, since getting water supply mandates labour contribution. The villagers of Taktapa contributed 235 days of labour for the village’s water supply.
Bartsham health assistant, Kezang Phuntsho, said the lack of water could also hinder growing of green vegetables mandated for every household by the health ministry to improve their diet. “If these’s no water, people could suffer from a series of anaemic diseases,” Kezang Phuntsho said.
Lack of water can also reverse the trend of decreasing poor hygiene-related diseases like diarrhoea and skin infections, he said. “Treating both preventable diseases like diarrhea, and poor dietary, illnesses would cost the government so much more,” Kezang Phuntsho said.
Dzongkhag forest office (DFO) attributed the drying of water sources to poor management; lack of conservation efforts at the village level; and indiscriminate construction of farm roads. “Natural calamities like earthquake could also be one of the causes,” an official from DFO said.
Meanwhile, the dzongkhag has initiated a survey on dried up water sources for interventions.
By Tempa Wangdi, Trashigang
There has been words the central bank officials have advised the government to lift the ban on vehicle import and construction loans.
Although just an exchange of words, the news will make happy many, who have been waiting for such a move.
Initially, the previous government when it imposed the ban, it had said the move was a temporary one, in response to growing Rupee shortage and pressure on existing infrastructure of roads among other reasons.
In the mean time, the government then was considering and working out other arrangements to make up for what it denied its citizens, improved public transports.
That measure having stretched far too longer than what the term “temporary” actually denoted, perhaps an intervention was called for.
But this time, as has always been the proposal and suggestion from various sections of the Bhutanese population then, instead of the ban, it probably will be the tax to be jacked up.
For all the poor road conditions to improve which the government had no budget, people plying them have contributed very minimal in terms of tax towards that purpose.
From what little it contributed, a significant chunk would be diverted elsewhere.
Although to what percent tax on vehicles would be increased is unknown, words doing the round is, vehicle cost would probably shoot up thrice the amount at which they were bought so far.
What would be worth considering is how vehicle types would be taxed.
Besides power of a vehicle’s engine, which guzzles much fuel that has to be imported from other countries, taxes have to be considered on those that choke the existing road infrastructure because of their sheer numbers.
It is hoped the additional revenue generated from the tax hike, if there ever will be one, would be pumped into improving public services, including public transport and with a modicum of transparency of where and how the tax money is actually used or channeled.
Going by the experience today, if improving public transport services in the capital city poses such a challenge, imagine how amplified that task would be in other parts of the country that are still in need of development.
Coming to housing, instead of lifting the ban on loans for the purpose, like many economists suggested, perhaps it is time to consider lowering loans for people wishing to build, not commercial buildings, but homes for themselves to live in.
Now doesn’t that sit well with His Majesty’s vision of a roof over heads of every Bhutanese, a home to call their own?
Scrap dealers have formed an association to supply empty bottles to Bhutan Brewery
Recycling: Thousands of empty beer bottles that scrap dealers across the country have collected over the years will now be returned to the beer factory.
The plan is make all scrap dealers bring their empty beer bottles to Phuentsholing and hand them over to one particular scrap dealer. This scrap dealer will in turn supply the empty bottles to the only beer factory in Pasakha, which is 18km from Phuentsholing.
Members of a partially formed scrap dealers association reached this decision, after they met to discuss what should be done with the bottles lying inside their scrapyard for decades.
The association has about 40 registered members. The issue of empty beer bottles came up last year, when scrap dealers griped that Bhutan Brewery private limited in Pasakha that brews Druk 11,000 beer imported bottles instead of buying from them.
Scrap dealers had no option then but to sell at a lower rate to dealers in the adjacent Indian border town of Jaigaon.
On an average, dealers sell about three Eicher truckloads of bottles to dealers in Jaigaon in a day. A truckload has 120 bags, each containing 90 bottles.
Scrap dealers said, after they sold the bottles to India, the company imported the same by paying INR.
“They’re paying INR, when they can pay Ngultrum and buy from us,” a dealer said. “The company instead buys bottles from two agencies in Jaigaon.”
Dealers said, they also requested Bhutan Brewery to buy from them, and to import bottles, if their supply wasn’t enough. Initially, they sold the bottles directly to beer factories in Sikkim.
But the factories stopped buying bottles from Bhutanese scrap dealers, after Bhutan stopped the import of Sikkim beer, with the ban on import of liquor.
The scrap dealers also said they wrote to many authorities to request the company to buy bottles from them, but in vain.
However, the company has now accepted their request of allowing one scrap dealer to collect all beer bottles and supply to the factory.
Tashi Norbu, a scrap dealer based in Phuentsholing, and the one who will be supplying bottles to the factory, said it has been agreed to supply about 500,000 bottles a month.
“We decided the bottles should be supplied directly to the factory instead of selling to Jaigaon,” he said. “The bottles are consumed and produced inside Bhutan, then why should empty bottles go outside?”
He said the association was formed, following this complaint, among others.
“But we have to pay two percent tax and three percent would be deducted for breakage while supplying,” he said. “We don’t understand why is this being applied to us, when it’s not applied while importing.”
Tashi Norbu said, he would buy empty bottles at Nu 2.50 a bottle, and supply at Nu 3 to the company. Today, the company buys at INR 3.50 a bottle, while scrap dealers sell each bottle for Nu 2.50 in Jaigaon.
But many dealers said that, although on a trial basis, about 500,000 beer bottles were supplied to the company in December 2013, they are yet to be paid for the supplies.
Bhutan’s brewery’s deputy managing director, TR Sharma, said payments were made on time. “We’re even accepting bottles from them now,” he said. “They can supply as much as they can and any time.”
But he added the company has to import from India, because the scrap dealers do not have the capacity to meet their requirements.
“We need 3M bottles everyday, a quantity they can’t supply,” he said. “That’s why we’ll have to still import.”
Bhutan Brewery supplies about 6,000 cases of Druk 11,000 beer a day within the country. “Only about three percent goes to India,” brewery officials said. “During summer, they sell about 5,000 cases of beer a day to India.”
Yangchen C Rinzin, Phuentsholing
Additional reporting by Meera Ghalley
While Bhutan Telecom has yet to reduce 3G service fees, Tashi Cell officials believe their rates are already affordable
Mobile: Unlike its competitor, Tashi Cell has no plans of reducing its 3G (third generation) mobile internet rates in 2014.
The private telecommunications provider introduced 3G in November, last year.
Depending at what time you use Tashi Cell’s 3G service, its pay-per-use data rate is either cheaper or significantly more expensive than Bhutan Telecom’s pay-per-use data rates.
If used between 6AM-11PM, it costs Nu 0.0006/KB (kilobyte), which is about Nu 630/GB (Gigabyte). This is double the price for a GB worth of data compared to Bhutan Telecom, which charges Nu 0.0003/KB for its one rate pay-per-use data plan, which is Nu 315/GB.
However, if downloaded between 11PM-6AM, Tashi Cell’s data rate gets cheaper than Bhutan Telecom’s at Nu 0.0002/KB, which is about Nu 210/GB.
The two telecommunications companies also offer data plans. Based on rates published on their websites, Tashi Cell offers data plans that are already cheaper than Bhutan Telecom’s, although the latter is planning to introduce more packages this year.
The closest for comparison is Bhutan Telecom’s Nu 99 plan which buys 333MB (Megabytes), and Tashi Cell’s Nu 100 plan which buys 400MB. At the top range, Bhutan Telecom’s Nu 999 plan buys 5.4GB, while Tashi Cell’s Nu 777 plan gets 7.77GB.
“Our mobile internet rates were revised at the end of November, 2013, when we launched 3G service, with the new mobile internet packages available, we feel the rates are already very affordable,” said Tashi Cell general manager for network operations, Ganga R Dhungyel. “Further downward revision would not sustain either our operations or the investments made.”
While Bhutan Telecom will be further reducing its mobile internet rates, this year, the company did not provide specifics on how low its rates may go.
Tashi Cell is also gradually expanding its 3G coverage. Two months after its introduction, it is currently available in Thimphu, Paro, Punakha town and surrounding areas, Wangduephodrang Bajo town and surrounding areas, Gedu and Phuentsholing town, according to Ganga R Dhungyel.
There are about 5,000 subscribed to the Tashi Cell 3G service. In comparison, there is a little over 100,000 subscribed for Bhutan Telecom’s 3G and coverage is available in the main towns and core areas of fifteen dzongkhags.
On whether Tashi Cell will match Bhutan Telecom’s coverage this year, Ganga R Dhungyel pointed out that expansion plans are subject to funds availability. “Plans are largely dependent on credit availability and also financial viability, we are also getting affected by the liquidity crisis, ” he said.
He added that while plans to cover additional towns do exist, it is not finalised. “We are concentrating on improving our service capacities in already covered areas while also looking at expanding to a few new areas,” he said. “We are improving our 2G (GPRS/EDGE) service throughout the country and we should be able to see much better performance of 2G data after March 2014,” he added. “This we are doing since we cannot cover all town or dzongkhags with 3G service immediately.”
Ganga R Dhungyel explained that using 3G, users should be able to obtain a speed of up to 21Mbps (Megabytes per second) and up to 244 Kbps for GPRS/EDGE. However, he pointed out that this is subject to ideal conditions being met such as acquisition of a strong signal and determined by the number of people using that signal. Realistically, he said that for 3G, a speed between 1-7Mbps should be expected, and for GPRS/EDGE, 100Kbps-128.
By Gyalsten K Dorji
A male barking deer was rescued from a labour camp in Changjalu yesterday morning after two boys informed forestry officials. Officials from the Wildlife Conservation Division released the deer in the Kuenselphodrang nature park.
The monastery is a shining example for the national long term goal of food self sufficiency
Agriculture: Monks studying in Phajoding monastery will now make fewer trips of the arduous three-hour journey from Thimphu vegetable market carrying their mess supplies.
In the absence of a road, older monks of the monastery, which overlooks Thimphu valley, take turns to walk down to Thimphu city on weekends to buy groceries and transport them manually and on the monastery’s seven horses.
Teachers decided to grow vegetables in their own backyard.
The monastery’s initiative to grow their own vegetables last year was a big success, producing more than a thousand kilograms of radish and turnips, and an equal number of spinach bundles.
Head teacher of the monastery, Namgay Tenzin, said the monastery’s endeavour was rewarding, as students got better nutrition in fresh, organic vegetables, using only horse and yak dung as manure.
“We didn’t have to buy so much for about five months since the first harvest,” Namgay Tenzin said. “It saved us some money.”
The 40 monks are still feeding on the left over turnip and its dried leaves (lom) they saved from the harvest.
The monks enjoyed hoentey, a delicacy of the people in Haa and Paro, made from turnip they grew, to celebrate Lomba, an occasion that marks the beginning of a new year.
In the past, providing fresh vegetables was a problem, as green vegetables withered and decayed soon after.
Monks complained of being unable to concentrate on studies during exams after returning from vegetable shopping in Thimphu. In summer, the footpath turned slippery during rainy days and the uphill journey took hours more.
The monks grew radish, turnip, peas, spinach, and carrot in a plot a little larger than the size of a basketball court.
An Australian tourist, seeing the impressive progress on the farm, donated a power tiller to the monastery.
“This new machine has been very handy in tilling land, and transporting things around,” Namgay Tenzin said.
There is no dearth of drivers, with more than 10 monks experienced in handling the tiller, and even in maintenance.
“These monks work in the fields at home during winter break, so we have no problem with drivers,” Namgay said.
The monastery will add potato to its cultivation list from this year.
Council for RNR research of Bhutan (CoRRB), which provided a one-day training in farming, tools and seeds, will conduct trainings in post harvest methods.
CoRRB’s program officer, BB Rai, said the council would encourage other monasteries and institutions on taking up similar projects.
“We’d render all support necessary, if the monasteries come forward with proposals,” he said.
By Tshering Palden
Thromde: Gelephu town’s residents and business owners had the last laugh, when the contractor, who won the bid to start the parking fee system in the thromde, surrendered his contract last week.
Residents criticised the thromde’s decision to start the parking fee in October, and complained that it was too early for Gelephu thromde.
Last week, citing loss, the contractor, Khabab Construction, surrendered the business. Khabab Construction was awarded the business, after they quoted the highest, about Nu 8M for two years. Contractor Bijay Chhetri said he quoted the amount, seeing a good business prospect, going by the number of cars parked in the town. “After the fee system was started, the number of cars decreased, and we had to surrender, as we were running into loss,” he said.
The contractor, who employed 14 collectors, said collection was barely enough to cover salary for his collectors. “The monthly return was only about Nu 20,000 after deducting the collector’s monthly salary of Nu 7,000. So we had to surrender, along with the loss of security deposit of Nu 800,000.”
Gelephu thromde officials said the contract had to be terminated, after the contractor failed to make timely installment. “He failed to pay the monthly installment of Nu 333,000, the amount he quoted, which comes to around Nu 11,000 a day,” said the thromde’s head of road and drain, dy. executive engineer, Tikaram Kafley, said.
Meanwhile, he said, the document for the retender is ready and it would start selling from tomorrow. More than 10 contractors applied in the initial tender, where the lowest quotation was slightly over 1 million.
Gelephu town has about 250 parking slots, while the vehicle number is estimated at about 1,000.
Meanwhile, businessmen in Gelephu said their business has suffered after the introduction of parking fee collection system.
By Tshering Namgyal, Gelephu
Two villagers involved also sentenced to prison terms
The royal Bhutan army’s military court in Lungtenphu, Thimphu sentenced eight soldiers and two villagers of Yangthang in Haa to prison terms, ranging from three years to three years six months.
The eight soldiers were convicted for accepting a bribe of Nu 900,000 from the two villagers.
Of the eight soldiers, the non-commissioned-officer was given three-year six-month prison term, while seven soldiers were given three years each.
The two Yangthang villagers were found guilty of bribing the soldiers and illegal trading, and convicted to three years imprisonment.
Initially, 10 soldiers were arrested for taking bribes, however, after prosecution, two were acquitted. Sources said one of the two acquitted was rewarded for refusing to accept a bribe.
The incident happened some time in September last year, when the two villagers were returning from a bordering town in the north, along with 23 horses laden with goods. The soldiers on patrol apprehended them. The horses were carrying carpets (dramzi dhen), brocades and Nu 500,000 concealed within the goods, one said.
The soldiers, in their statements, claimed the two villagers offered them Nu 500,000 if they were to be released. However, the two villagers claimed the soldiers demanded Nu 100,000 for each of them, after knowing they were carrying a huge amount of cash.
On reaching Haa, the two villagers approached the RBA Damthang wing commandant. “The soldiers admitted to taking the money from us, but produced only Nu 900,000 to the commandant,” said one.
The case was then forwarded to the RBA court in Lungtenphu.
Meanwhile, soldiers in Damthang on January 20 caught another group of villagers returning with goods and eight horses. The case was forwarded to police in Haa.
By Staff reporter
Update: Thimphu police arrested the 23-year old detainee, who escaped from Thimphu district court premise on the morning of January 20. The man, Thimphu city police’s officer-in-command Captain Wangdi said, was arrested yesterday evening from the town. “Most police personnel know him and our search team found him loitering in town,” he said. Captain Wangdi said, the man was arrested at 5am of January 20 for suspected burglary in two houses and was taken to court to seek remand order.