This is the second release of funds by GoI for the ESP
The Ambassador of India to Bhutan, V.P. Haran handed over a cheque amounting to Indian Rupee (INR) 1.5bn to Finance Minister Namgay Dorji yesterday for the government’s Economic Stimulus Plan (ESP), in the presence of Prime Minister Tshering Tobgay.
The Government of India (GoI) has committed INR 5bn for the ESP and the first release of INR1bn was made on October 29, 2013. Bhutan has now received INR 2.5bn for the plan.
Talking to The Bhutanese, Lyonpo Namgay Dorji said the government shall wait for another release of the fund from GoI to implement the ESP.
“We are grateful to the GoI and hoping for some more releases of the fund to meet the objectives of the ESP, which has been recently approved by the cabinet,” Lyonpo said.
The government, on December 4, approved the Implementation Strategy of the ESP and will lend Nu 2.1bn, almost half of the total ESP fund to local commercial banks. The government will charge banks an interest of six percent, which the banks would then provide as loans to clients at their normal interest rates.
The government will be seeking the approval of the Parliament to use ESP fund during the next session of Parliament. The ESP budget would be allocated and used with the consent of the ESP Task Force.
The overall objective of the ESP is to re-invigorate the economy through Special Support Schemes (SSS), easing the rupee situation and improving balance of payments, and by restarting loans.
Apart from the Nu 2.1bn which will be loaned out to local banks, the ESP fund shall be injected in various schemes.
The likely impact of the ESP, as stated by the government, would be increased economic activity, import substitution and export promotion, employment generation, and return from the fund.
The expected outcomes are reduction in rupee imports, savings in rupee interest payment, new businesses/projects, interest earnings and funds being available for re-deployment.
The Finance Minister said the total amount received till date amounting to Nu 2.5bn will not be able to stimulate the economy or meet the objectives of the ESP and that the government will need to wait.
Lyonpo said, “The GoI, through the Indian Ambassador, has assured the early release of the balance ESP amount.”
The assurance, Lyonpo said, was made by the Indian Ambassador while handing over the cheque yesterday.