This would push the total fund amount to nu 4.7 bn of the nu 5 bn esP
Bhutan will be getting an additional Nu 1 bn for the Economic Stimulus Plan by the end of this month. This would take the total ESP fund to Nu 4.7 bn from the existing Nu 3.7 bn.
This was communicated by the Indian Prime Minister Manmohan Singh to Lyonchhen Tshering Tobgay during their bilateral meeting held in Myanmar along the sidelines of the BIMSTEC summit.
India had recently given a cheque of Nu 1.2 bn in addition to the Nu 2.5 bn they had given earlier for the ESP taking the current ESP fund up to Nu 3.7 bn.
The Finance Minister Lyonpo Namgay Dorji said, “This is good news as it will mean that we can pre-pone the implementation of some of our ESP programs.”
The Finance Secretary Lam Dorji said that the additional 1 bn would help with the rupee situation.
This new announcement has come as a pleasant surprise since the government was only expecting a total of Nu 4.2 bn which were supposed to be released in the economy.
Of the Nu 5 bn fund, Nu 4 bn would be given to Financial Institutions (FIs), to give as loans to jump start various businesses.
Of the Nu 4 bn up for loans, the government will inject Nu 2.1 bn into the banks as subordinate debt for 10 years at six percent interest.
As per this, Bank of Bhutan would get Nu 500 mn, Bhutan National Bank would also get Nu 500 mn, Bhutan Development Bank would get Nu 430 mn, Royal Insurance Corporation of Bhutan would get Nu 250 mn, T- Bank would get Nu 150 mn, Druk-PNB would get Nu 150 mn, and Bhutan Insurance Limited would get Nu 120 mn.
Nu 1.9 bn will be pumped into a revolving fund of which Nu 1.5 bn will be for cottage and small industries and Nu 400 mn for non-formal rural activities to be looked after by the Business Opportunity and Information Center (BOIC).
There will be Nu 1 bn in special support schemes which include student concession education loans, retirement allowance for senior citizens and pre-employment support scheme for unemployed youth looking for employment.