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 2024-25 and Supplementary Budget Appropriation Bill for the  FY 2023-24 today. 

Presenting the observations of the Committee, the Chairperson submitted the following 16 recommendations on the National Budget for the FY 2024-2025 and the Supplementary Budget for FY 2023-2024:

1. The supplementary budget for the FY 2023-24 were incorporated in keeping with the relevant laws and regulations of the country. Therefore, the committee recommended the supplementary budget incorporation of Nu.3,224.924m for adoption by the House as proposed by the MoF;

2. The Government to adjust and allocate an additional budget of Nu.140.200 million to enhance the capacity of the National Food Testing laboratory and improve the certification services for facilitating export and import of food and food products;

3. The Government to carry out technical feasibility studies and business viability of crops under commercial farming. If found viable, the Government needs to draw a clear production, processing, logistics and marketing plan with proper delineation of responsibilities and accountability to all the stakeholders. For Chirup farm, the Government rather than providing budgetary support must provide as equity injection directly to FMCL to fix accountability and accord ownership of the Chirup commercial venture;

4. The Government to identify Dzongkhags based on its importance and estimated risk of human-wildlife conflict for Nu.45.000 million budget for the construction of chain-link fencing project;

5. The Government to streamline installation of solar PVs in the country to reap benefits of economies of scale, quality assurance and most importantly the sustainability of such initiatives and accordingly allocate the budget to rightful authority - which is the Department of Energy for implementation, ownership and maintenance;

6. The Government to offload the allocation of Nu.77.055 million under CARLEP loan financing for Kofuku International from the National Budget and transfer the debt liability to DHI with proper accounting treatment as on-lending from the government;

7. The Government to prioritize Dzongkhags and regions that have relatively lesser access to good quality roads with double lanes and other roadside amenities, and Nu.867.380 million allotted for development and maintenance of Dzongkhag Roads to be specified with location and detailed activities to be carried out in a year under the Road sector;

8. The Government to drop the budget allocation of Nu.25.990 million for Green Bhutan Corporation from the National Budget in keeping with the requirements of forming state enterprises stipulated under chapter 5 of the Public Finance Act 2007;

9. The Government to formulate an appropriate guideline to allocate project-tied grants with the objective to maximize returns from the investment and also taking into consideration the need of regional development as enshrined in the Constitution. The guideline to be shared with the Economic and Finance Committee for necessary review and to report to the House. The Government is also to institute an institutional mechanism to vet all major activities to enhance the quality of investment and accordingly reap optimum benefits;

10. The Government to run less fiscal deficit (possibly less than 3% of GDP) in the first year and accordingly smoothen the same in the subsequent years;

11. The Government to institute proper mechanisms to ensure optimal utilization of the capital budget. The Government may reduce the capital budget based on the implementation capacity of the budgetary bodies;

12. The Government to allocate a proportionate budget for Human Resource Development and for Research and Development based on the recommendations of the House;

13. Recognizing that inflation impacts the poorer section of the society the most, the Government has to institute appropriate measures to mitigate inflation risk in the country; 

14. The Government to closely liaise with RMA and explore new ways to manage excess liquidity to avoid negative impact to the economy; 

15. The Government has to emphasize more on export promotion and on import substitution to avoid negative impact on the international reserve. The Government also needs to focus on enhancing the supply and value chain within the country; and 

16. Realizing the fact that inflation decreases the purchasing power and that the purchasing power of the ngultrum decreased by 4.8% as of April 2024, the Government has to adjust inflation in the recurrent budget of all budgetary agencies to carry out their responsibilities effectively and efficiently.

During the day-long deliberation held today, the House unanimously endorsed all recommendations except for recommendation 2, which the House directed the Committee to review further and report back to the House tomorrow.

The adoption of the Budget Appropriation Bill for FY 2024-25 and Supplementary Budget Appropriation Bill for FY 2023-24 in entirety will be held tomorrow.