Bhutan’s plan to boost its economy with a Nu 15 billion program, called the Economic Stimulus Programme (ESP), will now be part of India’s financial assistance package of INR 100 billion for Bhutan’s 13th Plan.

Vinay Mohan Kwatra, the Indian Foreign Secretary, shared this news during a press conference held in Thimphu yesterday.

He also said that India has been Bhutan’s biggest supporter in development since Bhutan started its first five-year plan back in 1961. He highlighted that the assistance for Bhutan’s 13th Plan has doubled compared to the previous support given during the 12th Plan, which was Nu 50 billion.

Vinay Mohan Kwatra said that the help given is a sign of strong partnership and India’s commitment to increase aid for the 13th Plan, which is a significant part of the collaboration between the two countries. “Our support plan plays a crucial role in working together to improve our relationship in areas of common priorities.”

The government has formed a high-powered task force, an economic development board, chaired by the prime minister, will oversee the planning and execution of to develop the implementation of the 15 billion ESP.

The ESP is expected to boost the economy with injection of liquidity in the banking sector, enabling loan deferments, reducing interest rates, and creating other loan schemes to boost the economy.

Additionally, there are also plans to set up a special loan scheme to support special groups like farmers, women, youth, persons with disabilities and special investments for economic growth of rural areas and creation of specialised credit windows dedicated for the cottage and small industries.

Bhutan aims to become a wealthy nation by 2034 and is entering a new phase of economic growth.

In the 13th Plan, the budget is set at Nu 512.48 billion, with Nu 250 billion allocated for capital and Nu 262.48 billion for current expenditure. This budget marks a 30 percent increase compared to the 12th Plan’s budget of Nu 394.84 billion.

For fiscal year 2024-25, India has already allocated Nu 20.68 billion as an external aid.

Funding sources for the 13th Plan include domestic resources amounting to Nu 318.89 billion and grants totaling Nu 140 billion. These grants come from various sources, including the government of India (Nu 100 billion), the EU, Japan, and international organizations like the UN. Additionally, there’s an allocation of Nu 10 billion from green or climate financing, which includes contributions from the Bhutan Trust Fund for Environmental Conservation.

Scheduled to begin in July of this year, this plan sets ambitious goals with the aim of raising the country to a high-income status. The main economic objectives include doubling the Gross Domestic Product (GDP) from USD 2.5 billion to USD 5 billion by 2029 and reaching USD 10 billion by 2034.

The plan also strives to increase GDP per capita from USD 3,833 to USD 4,256 by 2029 and exceed USD 12,000 by 2034.