Deliberation on the Budget Appropriation Bill for the FY 2025-26 and Supplementary Budget Appropriation Bill for the FY 2024-25
The Chairperson of the Economic and Finance Committee (EFC), Member from Bartsham-Shongphu constituency, presented the Committee’s Review Report on the Budget Appropriation Bill for the FY 2025-26 and Supplementary Budget Appropriation Bill for the FY 2024-25 today.
The Committee made the following 15 recommendations on the National Budget for FY 2025–2026 and the Supplementary Budget for FY 2024–2025:
Supplementary budget appropriation for FY 2024 - 2025- The committee recommended the supplementary budget of Nu. 1,588.023m for approval as proposed.
Fiscal Deficit- The Committee recommended that the government reduce the fiscal deficit to 5% of GDP or below to adhere to the fiscal policy objective, prevent inflationary pressure and ensure adequate borrowing space for the private sector.
Chirup and Commercial Farm Initiatives- The Committee recommended the removal of Nu. 149.12 million allocation for commercial Chirup and strawberry farms under the Ministry of Agriculture and Livestock from the Budget Appropriation Bill 2025-26, as it contradicts government policy and international best practices. Similar past projects have also failed to deliver adequate returns..
General Reserve and Legal Compliance- The Committee recommended that the Nu. 4,312.5 million allocated under the general reserve must be clearly stipulated that it should be used strictly for its intended purpose, in line with the provisions of the Public Finance Act, to prevent misuse or unauthorized reallocation.
Rural Life Insurance Scheme- The Committee recommended removal of the Nu. 263 million allocation for the Rural Life Insurance Scheme under General Reserve due to the lack of clarity on target beneficiaries, benefit amounts, and premium details. A proper study should be conducted before implementation.
Third child policy- The Committee recommended exclusion of the Nu. 31.5 million allocated for the Third Child Policy from the budget until a proper study and review are carried out.
Centrally Executed LG Capital Programs and Division of Responsibilities- The Committee recommended allocation of the Nu. 11,321.4 million under respective LGs unless centrally executed if its absolutely necessary. It also urges the government to develop or revamp a clear Division of Responsibility Framework to avoid overlaps and inefficiencies.
Internet Bandwidth Subsidy-The Committee recommended withholding the Nu. 343.7 million allocation until the government provides a clear justification and implementation plan. It should not be used to subsidize telecom operators without proper rationale.
ESP Fund Integration- The Committee recommended completing the integration of all aspects of the ESP fund to ensure proper accounting and financial treatment.
Tourist Airfare Subsidy- The Committee recommended discontinuing the Nu. 49.5 million airfare subsidy, as it contradicts the high-value, low-volume tourism policy and lacks evidence of positive impact.
Priority Development Fund (PDF) -The Committee recommended that the government either mobilize additional resources or adjust the Nu. 94 million allocation from the overall capital outlay of the 13th FYP, rather than from the limited Gewog Annual Grants.
Capital Budget Underutilization- The Committee urged Parliament to take note of persistent capital budget underutilization and consider fixing accountability to uphold budget credibility.
Budget to National Land Commission to correct anomalies arising out of Property Tax Act of Bhutan 2022- The Committee recommended that the government allocate adequate budget to the National Land Commission to fulfill its commitment to correct anomalies arising from the Property Tax Act of Bhutan 2022.
Mini Hydropower Project in Lunana- The Committee recommended that the government initiate dialogue with DHI and DGPC to adopt the standard funding and execution modality for the Nu. 337.280 million Lunana mini hydropower project, in line with existing practice.
Local Government Budgeting and Autonomy- The Committee recommended revising the ceiling for cultural and religious preservation spending from 10% to 20% of annual grants, especially for Gewogs with lower RAF-based allocations, to enable more effective support of local cultural priorities.
The House during the deliberation on the recommendations endorsed all recommendations except for the following:
With regard to the budget for the Chirup and Commercial Farm Initiatives, the Committee is to review further based on the MoF’s Action Taken Report on the recommendations adopted last year and additional information to be provided by the MoAL and submit its recommendation tomorrow before the adoption of the Budget Appropriation Bill.
With regard to recommendations on Internet Bandwidth Subsidy, the Committee is to review further based on the additional information to be provided by the MoF and submit its recommendation tomorrow before the adoption of the Budget Appropriation Bill. .
A general recommendation to revise the ceiling for cultural and religious preservation spending from 10% to 20% of annual grants, especially for Gewogs with lower RAF-based allocations, to enable more effective support of local cultural priorities was not endorsed by the House.
