Adequate funds secured to finance the fiscal deficit: Finance Minister

Two questions were addressed to the Finance Minister yesterday during the National Assembly session regarding what the government plans to do to make up for the deficit from the total projected budget of Nu 310 bn in the 12th FYP, off which the total deficit of Nu 29 bn was recorded and Nu 15.34 bn deficit being reported in the Fiscal Year 2020-21.

 Lyonpo stated that as presented in the FY 2020-21 Budget Report the Government meets its fiscal deficit through domestic and external borrowings.

Of the total fiscal deficit for FY 2020-21 is estimated at Nu 15.329 bn Lyonpo said that the requirement for the FY 2020-21 is Nu 14.012 bn.

He said this will be financed as net external borrowing of Nu 420 mn, and net domestic borrowing of Nu 13.592 bn.

Lyonpo addressed the house that the Government has so far mobilized Nu 3 bn through issuance of Domestic Bond and Nu 3 billion through issuance of Treasury Bills.

Reportedly the Government has also mobilized Nu 4 bn from external sources through project tied assistance from Asian Development Bank (ADB), Japan International Cooperation Agency (JICA) and The International Fund for Agricultural Development (IFAD).

Lyonpo addressed the house that the Government is at an advanced stage of agreement signing for Project tied assistance from the World Bank (WB) of Nu 4 bn.

Lyonpo added, “Therefore, the total fund secured for financing the fiscal deficit is Nu 14.047 bn which is more than sufficient to finance the fiscal deficit.”

 “However, experiences have shown that towards the end of the Financial Year, fiscal deficit

narrows down because of the absorptive capacity of the implementing agencies.” Lyonpo added.

Lyonpo concluded that measures of health and safety protocol have hampered implementation of capital activities in the agencies, which could also improve the fiscal situation.

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