The 2017-18 financial year, the last year of the 11th Plan, which begins from July 1, has the largest allocation in the current plan with a budget Nu 60.7 billion.
Of the total, Nu 29.3 billion is for capital expenditure, Nu 28.6 billion for current expenditure and Nu 2.8 billion to service loans.
Presenting the budget to the National Assembly on May 8 the finance minister, Namgay Dorji, said the allocation was higher for the last year mainly to achieve the targets and identified goals of the 11th Plan.
The proposed budget is also expected to maintain non-hydro debts at 35% of GDP and cease borrowings for recurrent expenditures. One key target of the current plan is to reduce income poverty to five percent by June 2018.
Sector-wise, Economic and Public Services has been allotted the highest budget with 34%, followed by Social services with 26% and general public services with 23%.
Agriculture has been allocated Nu 5.4 billion to improve irrigation channels, construction and rehabilitation of farm roads, completion of integrated Livestock Farm at Samrang and the National Yak Breeding Farm at Chanaphu, Haa. The development and management of 10 National Parks and Reserves has been allocated Nu 240.9 million. An Endowment Fund for Crop and Livestock conservation to compensate farmers for crops and livestock damaged by natural calamities and wildlife is to be established as a new initiative under the sector.
Industrial estates in three dzongkhags and fuel depots in 140 gewogs will be developed in the last year of the current plan.
For the tourism sector, a separate budget has been allocated for road shows, travel fairs, development of online promotional programs, development of trekking routes and ‘Bhutan Tourism Monitor’.
In the communication sector budget has been allocated for monsoon restoration works and resurfacing and blacktopping of gewog connectivity roads.
The old terminal building in Paro Airport will be modified, a parallel taxi way constructed and a terminal building established at Bumthang domestic airport.
To support the film industry a film studio and five cinema halls will be constructed in Sarpang, Mongar, Tsirang, Trashigang and Wangdue Phodrang
A total of Nu 24.050 million has been allocated for capacity development of media professionals, awareness programs and developmental of regulatory frameworks.
Under the energy sector, the major activities include the preparation of Detailed Project Report for Kuri-Gongri project and construction of 132 KV transmission line between Kanglung and Phuntshothang. According to a report by the finance ministry, with on-going project nearing completion and consequent increase in electricity exports trade deficit, estimated to be 15% of GDP in 2016-2017, will be reduced to 9% of GDP in the subsequent three years. The current account deficit with India is projected to improve to 8.2% of GDP in FY 2019-2020 from 27.2% in FY 2015-16.
Under the cultural services major activities includes renovation and construction of dzongs in Trashigang, Gasa, Wangdue Phodrang and Phajodhing Monastery among other on-going renovation activities. The registered Keonyers or caretakers of the Lhakhangs under Zhung Dratshang will be paid a salary from July 1 this year.
The finance ministry report states that Druk Holding and Investments (DHI) earned Nu 7.3 billion in 2016 as income of which, 97% was dividend income from its subsidiaries. Its total income increased by 17.4% from 2015. Overall DHI earned a profit after tax of Nu 5 billion. Taxes and dividends from DHI to the government constituted 22% of total domestic revenue.
The Property Assessment and Valuation Agency (PAVA) rates used for acquiring land for government since 2009, was revised from April 2017. The report also stated that the government’s Performance Management System (GPMS) has helped in optimizing use of public resources as budget has been linked with objectives and targets of the Annual Performance Agreements (APA).