The Bhutanese Leading the way.
The Annual Budget Report for the Fiscal Year 2015-2016 was referred to the Finance Committee of the National Assembly (NA) for the first time in the Bhutan’s history. The step is in accordance to the Section 240 of NA (Amendment) Act 2014, which states the budget and the appropriation bill as well as the supplementary appropriation bill shall be referred to a relevant committee by a speaker after the presentation by the Finance Minister.
Chairperson of the Committee, Karma Tenzin, presented the review of the budget and 11 recommendations of the Committee for discussion in the house on 9th June.
The Chairperson presented a total of six observations and 11 recommendations. The observations include increase in growth of expenditure which was more than the increase in the growth of revenue and exclusion of Foreign Direct Investment in the budget report among others.
Some recommendations of the committee states that the budget allocation of the resources should be strictly in line with resource envelope, the government should review the formula for budget allocation for balanced development and review policy on how to contain the growing deficit.
Deliberating on the national budget for the financial year 2015-16, the House so far resolved on chapter one on fiscal performance in financial year 2013-14 and chapter two on revised budget for financial year 2014-15.
Submissions were made on revised estimate on domestic revenue which includes Nu. 150 million generated from Thai tourists last year under relaxation of minimum daily package rate. It was submitted why similar package rate was not applied to tourists of other nationalities and if it had affected the tourism sector in any way.
The Prime Minister informed that the minimum daily package rate was relaxed for Thai tourists in 2014 mainly to commemorate the 25th diplomatic anniversary between Bhutan and Thailand. He said that the special package given to Thai tourists last year has benefited with increasing number of Thai tourists visiting Bhutan this year. Expressing similar views, the Minister for Home & Cultural Affairs informed that relaxation of minimum daily package rate for Thai tourists last year was followed by positive feedbacks from tourism stakeholders.
On the issue of BOiC the Prime Minister set forth that the government would deal accordingly if it was told clearly on what basis the BOIC was illegal. The Prime Minister also informed that the Cabinet would be holding discussions on BOIC as its legality was being questioned. The recommendation includes that the budget allocation of the resources should be strictly in line with the resource envelope. It also addresses the annual resource gap is within the limit of international benchmark for the FY 2014-15. However, the resource gap must be reviewed as it cumulative in nature that could add to the debt stock.
The recommendation, which is in order to achieve the fiscal policies, defines that the non-hydropower debt needs to be maintained below 35% of GDP. The Committee insisted this ceiling to be incorporated in the public debt policy.
Another recommendation is on the tourism budget, describing the Ministry of Finance, in consultation with Tourism Council of Bhutan, to review the requirement of a large fund for market promotion such as travel fair and whether such amount can be used for other advertisement materials. The Finance Committee also recommended that the underutilization of the budget should be avoided through the more diligent planning and holdings concerned agencies accountable through the Annual Performance Agreement (APA).
The Minister of Finance, Namgay Dorji, said, “there are 11 recommendations, but I cannot support FDI inflow both in the government and private sector over the past years to be included in the budget report as it will be additional work.” Whereas, the Bartsham Shongphu representative, Wangdi Norbu, said, “I have support for all the recommendation by the committee and FDI could be included as we would know the status of FDI.”
The Minister also said that the government will be more diligent in budget planning and minimizing supplementary appropriations. Though it is also recommended that the supplementary appropriation bill can be submitted in the winter, he pointed out it wouldn’t be possible as there was only six months left for the winter session and the preparation would require more time.
As for the hydropower-related budget, the Minister expressed his objection clearly. “I am not supporting the committee’s recommendation about providing the budget utilization for hydropower projects including revenue projection.” The government simply cannot make the projection because of the nature of those projects such as the delay of construction, according to the Minister.
Deliberating on the annual budget for the financial year 2015-16, the House deliberated on budget allocation to various sectors at length. Budget allocation for construction of roads and hydro power projects were some of the issues which drew overwhelming submissions from the Members. The Minister for Finance underscored that Nu. 996 million alone was allocated for renovation and construction of new farm roads in the financial year 2015-16. He also added that as in the past, the annual budget was prepared based on the 11th five year plan with the goal to achieve self reliance. Similarly, the Minister for Economic Affairs informed on the progress made by various hydropower projects in a bid to achieve the goal of generating 10,000 megawatt of electricity.
However, eight recommendations were resolved by the house and the Committee was directed for review and reporting on the remaining three during the winter session. Those three pertain to inclusion of FDI inflow in both the government and private sector, possibility of presenting the Supplementary Budget Appropriation Bill in the winter session and inclusion of budget utilization for the hydropower projects in the budget report.
Except for one no the NA unanimously passed the supplementary the annual budget for FY 2015-16 which amount to Nu.50, 713.707mn.
