The Bhutanese Leading the way.
During the Question-and-Answer session at the National Assembly, Member of Parliament (MP) from Kengkhar-Weringla Constituency, Dorji Wangmo questioned the Minister of Finance on the pledge made by the ruling party and opposition party on increasing the rural life insurance from Nu.30,000 to Nu.150,00.
According to the MP, the current rural life insurance scheme of Nu. 30,000, revised seven years ago in 2017, is inadequate, barely covering funeral expenses and not enough for other traditional death rituals. This is especially challenging for people in rural areas and low-income groups.
Both PDP and BTP pledged during their election campaigns to increase the rural life insurance to Nu. 150,000. The MP urges the government to act on this promise promptly, as the current budget does not indicate any immediate plans to increase the life insurance amount. The MP seeks clarification on when the government plans to fulfill this pledge and what steps will be taken.
In response, the Minister of Finance, Lekey Dorji, stated, “We are still recovering from the pandemic, and our top priority is to strengthen the fundamentals of our economy. Our public debt may increase further, and there is a risk of an increasing fiscal deficit. On the fiscal front, internal resource mobilization needs to be enhanced while ensuring prudent public investments. The government also needs to work closely with the central bank to ensure that monetary and fiscal policies align to achieve our long-term national objectives.”
Lyonpo shared that to cover all Bhutanese 8 years and above for 150,000, with each paying Nu. 87 and the Gov providing the rest, it would cost approximately Nu. 600m for this budget year.
“We can implement from this budget year but we have to cut budget from somewhere – school, road, water, hospital, etc. The Government’s pledge to increase life insurance from Nu 30,000 to Nu.150,000 is still a work in progress. The Ministry is working on how best to implement this rural life insurance but we can only operationalize this when our financial situation improves in future. However, for the FY 2024-25, we don’t have plan to increase the rural life insurance.”
As per the Budget Report for FY 2023-2024, the provision for rural life insurance subsidy is kept at Nu.67.730 million and for FY 2024-2025, it is Nu.69.083 million.
The rural life insurance was revised from Nu. 10,000 to Nu. 15,000 in 2009, with an annual premium of Nu. 45. It was further revised from Nu. 15,000 to Nu. 30,000 in 2017, with an annual premium of Nu. 195, where individuals pay Nu. 87 and the government subsidizes Nu. 108 per person.
The 13th FYP is under deliberation in the 1st Session of the Third Parliament for implementation from July, 2024.
