The Bhutanese Leading the way.
The National Council (NC) in a press release alleged that the National Assembly (NA) had unilaterally removed the Priority Development Fund (PDF) from the Annual Budget Appropriation Bill after the Supreme Court declared it unconstitutional but the NA did not consult with the NC or seek consensus before submitting for Royal Assent.
The NC called for an emergency meeting of the relevant committees of both the houses to seek formal explanation on the steps taken, reinforcing NC’s mandate as house of review and ensuring Parliamentary accountability.
National Assembly (NA) in reply said the PDF, initially proposed at Nu 2 million (mn) per constituency totaling Nu 94 mn was incorporated in the FY 2025–26 budget following a motion adopted in the first session of the Fourth Parliament. The House Committee’s motion for a Constituency Development Grant (CDG) received majority support, with 33 Members voting in favour and 12 abstaining.
According to the NA, the proposal was supported by a legal opinion from the Office of the Attorney General (OAG), which stated that while there was no existing law on CDG, inclusion in the Budget Bill would provide a legal basis for the PDF. The Ministry of Finance (MoF) accordingly proposed that the fund be drawn from gewog-level allocations in the 13th Five-Year Plan, with implementation guidelines to be finalized upon parliamentary approval.
The Budget Appropriation Bill, including the PDF allocation, was passed by the NA on 13th June 2025 and forwarded to the National Council (NC).
NC, however, recommended removing the Nu 94 mn for the PDF, citing constitutional provisions on separation of powers, decentralization to local governments, and the principle of free and fair elections.
NA voted to retain the PDF and other contested allocations, maintaining the budget as passed earlier.
The Bill was then submitted for Royal Assent on 2nd July 2025, accompanied by an appraisal note summarizing the views of the OAG, the Election Commission of Bhutan, the Royal Audit Authority, and the NC.
On 14th July 2025, NA received a judicial opinion from the Supreme Court, issued under Article 21(8) of the Constitution, declaring the inclusion of the PDF in the budget as “not constitutional.”
NA immediately complied with the binding interpretation. In its 8th Plenary Meeting on 16th July 2025, attended by Cabinet Ministers and its MPs, the House decided to exclude the PDF from the budget. The revised Budget Appropriation Bill with the Nu 94 mn allocation removed was re-submitted for Royal Assent and approved on 22nd July 2025.
The NA’s press release emphasized its exclusive constitutional authority over Money Bills, citing Articles 13(2) and 14 of the Constitution and reaffirming the Supreme Court’s 2011 judgment that matters of fiscal policy, taxation, and public finance fall within the NA’s legislative prerogative.
The NA stressed that the NC’s role in reviewing Money Bills is non-binding, and once a Bill is finalized and no dispute arises under Article 13(8), further concurrence from the NC is not required.
NA also rejected the NC’s call for an emergency joint committee meeting on the PDF issue, saying there was “no legal or procedural basis” for such a meeting. It noted that joint sittings can only occur under Article 13(8) with His Majesty’s consent in cases of disputed provisions, and that informal inter-house committee meetings are not provided for under current laws.
Further, NA, in the press release, expressed concern that some individual members had mischaracterized the PDF issue and politicized a matter already resolved through the constitutional process.
“Legislative supremacy on money matters must rest with the National Assembly, and any encroachment by the House of Review must be viewed as inconsistent with the separation of powers doctrine,” it stated.
