Several recommendations by NA for Local Govt budget allocation in 13th plan but none are binding on Govt

The Chairperson of the Economic and Finance Committee (EFC), Rinchen Wangdi, presented the review report on the 13th Five-Year Plan (FYP), which included ten recommendations.

These recommendations focused on the resource allocation formula, advocating for uniform criteria across Dzongkhags, Thromdes, and Gewogs. The EFC proposed reducing the weight of the GNH Index in these formulas and recommended avoiding the use of standard deviation to prevent disparities in resource distribution.

The 13th FYP delineates seven Local Government Key Result Areas (LGKRAs), which reflect the eight national outcomes of the plan. These LGKRAs aim to transform local economies and elevate the quality of life for Bhutanese citizens.

A key feature of the 13th FYP is its refined Resource Allocation Framework (RAF), which ensures fair and strategic distribution of resources.

The plan allocates a total indicative budget of Nu. 72 billion, with Nu. 34 bn dedicated to block grants for Thromdes, Dzongkhags, and Gewogs, and Nu. 38 bn earmarked for project-tied works. This allocation is based on principles of objectivity, transparency, equity, and predictability, addressing local development needs effectively.

Samtse district receives the highest Annual Grant Allocation, amounting to Nu. 617.57 million, with Wangdue Phodrang and Trashigang receiving Nu. 519 million and Nu. 590.99 million respectively.

On the other hand, Haa district received the smallest grant of Nu. 405.70 million, followed by Bumthang with Nu. 417.66 million and Gasa with Nu. 426.16 million.

The total allocation for the four thromdes is Nu. 11 bn. Thimphu received the highest allocation at Nu. 6.212 bn, followed by Phuentsholing at Nu. 2.194 bn. Gelephu and Samdrup Jongkhar received Nu. 1.456 bn and Nu. 1.136 bn, respectively.

The allocation criteria encompass resident population, geographical area, poverty distribution, climate change vulnerability, GNH Index, unemployment distribution, and transportation access. This comprehensive approach aims to address local development challenges and maximize the impact of allocated resources.

Notably, the new criteria lead to significant shifts in resource distribution among Dzongkhags. Thimphu, Punakha, and Sarpang are among the top gainers, while Mongar, Zhemgang, and Samtse experience reductions.

The Gewogs also see considerable changes in allocation, with Hoongrel in Paro, Tareythang in Sarpang, and Ge-nyen in Thimphu receiving the highest increases, while Bongo, Lunana, and Draagteng face decreases. These adjustments reflect the plan’s commitment to addressing disparities and ensuring that resources are directed where they are most needed.

Out of the ten recommendations by the EFC, Recommendation 1 and Recommendation 5  did not get though.

Recommendation 1 suggests using uniform criteria for Dzongkhags, Thromdes, and Gewogs, reducing the weightage of the GNH Index, and eliminating the use of standard deviation in the Resource Allocation Formula.

Recommendation 5 proposes allocating PTA and SDP resources for Local Governments (LGs) through a resource allocation formula similar to the one used for block grant allocation.

The recommendations that were accepted are using a middle path approach in the RAF, an average of resident population and registered population is proposed in place of resident population, a separate budget like four Thromdes for at least completing the activities included in the Local Area plan, develop sector wise resource outlay similar to allocation framework reflected in the National Budget document of the Financial Year 2024 -2025 to enable the decision makers and implementers in comprehending the resource allocation trends and guide in projecting the future resource requirement and the plan also has major projects and its indicative resource outlay to ensure transparency, predictability and consistency of the plan and its implementation

The others accepted points are to make it a mandatory policy to allocate 1% of GDP on R&D to carry out Basic Research, Applied Research and Experimental Development, to develop a detailed Human Development Master Plan with dedicated resource allocated for the 13th FY and to enhance resources allocation for HRD from 0.81% (Nu. 2 billion) to 2% (Nu.4.9 billion), allocation of dedicated resources for out of school and unemployed youth to develop sport facilities, the government to include ESP in the main fiscal framework of 13th FYP for transparency, responsibility and accountability as mandated by Article 14, section 2 of the Constitution and consistent budget allocation figure for the RNR sector.

However, while the NA passed the above resolutions unlike a money bill they are not binding on the government and the government can choose what it wants to pick or not.

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