… education allocated the highest share at Nu 21.7 billion or 22 percent

The fiscal year 2024-25, the first year of the 13th Plan, was allocated a 19 percent share of the Plan’s budget with  the government allocating Nu 97.65 billion.

This is an increase of 14.21 percent or Nu 12.15 billion compared to the previous fiscal year 2023-24.

Of the total allocated budget for the fiscal year 2024-25, expenditure is estimated at Nu 89.15 billion—Nu 50.81 billion in recurrent and Nu 38.34 billion in capital expenditure. Recurrent and capital expenditure constituted 57 percent and 43 percent of the total expenditure, respectively.

The expenditure is Nu 12.77 billion more than the revised expenditure of the previous fiscal year. Both recurrent and capital expenditure increased by Nu 5.26 billion and Nu 9.03 billion, respectively from the approved budget of the previous fiscal year.

As current expenditure has to be met by the domestic revenue, the domestic revenue is estimated at Nu 54.75 billion—Nu 39.25 billion from tax, Nu 15.5 billion from non-tax, and remaining from other receipts for the fiscal year.

The capital expenditure will be financed through 43.1 percent grants, 41.6 percent borrowings, and 15.3 percent through surplus generated from domestic resources.

With the total resources available at Nu 73.18 billion and total outlay of Nu 89.15 billion, it leaves a fiscal deficit of Nu 15.97 billion equivalent to 5.2 percent of GDP.

Presenting the budget to the National Assembly yesterday, Finance Minister Lekey Dorji, said that the objective of fiscal year is “accelerating prosperity and social transformation.”

He said that the budget for the fiscal year is aimed at ensuring that the resources are strategically invested to achieve key performance areas identified in the 13th Plan and efficiently utilised to achieve the development goal to lay the foundation of a healthy, prosperous and secure Bhutan.

He added that the government targets to contain the fiscal deficit within 5 percent of the gross domestic product (GDP) and tax to GDP ratio of at least 13 percent in the fiscal year.

Additionally, to contain recurrent expenditure within 90 percent of the internal resources, and central government debt below 45 percent of GDP.

The economy is projected to grow at 6.3 percent in 2024 and 8.9 percent in 2025.

Lyonpo Lekey Dorji said that the growth is anticipated because of the  commissioning of the Puna-II hydropower project, expansion in manufacturing sector, construction, tourism sector, and stimulative effect of the economic stimulus programme (ESP) in the economy.

With India’s economy projected to maintain a strong growth at 6.8 percent in 2024 and 6.5 percent in 2025, he added that Bhutan’s economy will benefit since the economy is closely linked, and export accounts over 80 percent while  70 percent of tourist arrivals in last year were from India.

The budget report has been referred to the Economic and Finance Committee to prepare for a review for on June 21 this year.

Education

The education sector was allocated the highest share with Nu 21.7 billion equivalent to 22 percent of the total budget.

In line with the 13th Plan, the budget will enhance teacher professional development, upgrading infrastructure for safe and inclusive learning environments, revising curricula, promoting health and wellbeing, exploring sustainable financing, intensifying research, and providing lifelong learning opportunities.

For early childhood care and development (ECCD), a budget will be allocated to ensure completion of 44 new ECCD centres to enhance early childhood education from 38.7 percent to 51 percent. Plans include upgrading facilities in 20 central schools and increasing the number of inclusive schools from 39 to 44.

The budget will prioritise improving access to quality tertiary education through investment in expansion of facilities for a safe and inclusive learning environment and technologically-enabled learning environment (laboratory and ICT equipment).

Health

To enhance the health and wellbeing of Bhutanese in the 13th Plan, the health sector is allocated 11 percent or Nu 11.06 billion of the total budget.

Initiatives in the health sector are expected to strengthen health service delivery through investments in infrastructure and equipment and building a competent health workforce resulting in an increase in accessibility to improved quality health from 90 percent to 91 percent.

In addition, the accelerating mother and child health programme will be initiated to improve the health and well-being of mothers and children across the country.

RNR

The renewable natural resources (RNR) sector is allocated a budget of Nu10.23 billion, 10 percent of the total budget.

This investment is expected to increase the GDP by the agriculture and livestock sector from Nu 27 billion in 2022 to Nu 50 billion by 2029.

The continued implementation of the million fruit tree and high value fruit seedlings project will increase the production of high-value fruits and nuts from 37,997 MT to 73,862 MT in fiscal year 2024-25 towards fulfilling the 13th Plan target of 104,024 MT.

Similarly, the allocation for construction of various irrigation canals and installing chain link fencing is expected to achieve rice self-sufficiency through enhancement in production of 54,040 MT of paddy over the next five years, with an annual target of 45,087 MT of paddy for FY 2024-25.

Mining and manufacturing

The sector is allocated a budget of Nu 1.96 billion equivalent to 2 percent of total budget.

In order to achieve the 13th Plan outcome of enhancing productivity and diversifying markets and products, the mining sector will focus on increasing the GDP output targets from Nu 4.01 billion to Nu 9 billion.

The capital budget allocation of Nu 79.1 million for the tourism sector will support events, product development, roadside amenities, community-based tourism, and ecotourism. Additionally, to promote Bhutan as a high-end destination and achieve the 13th Plan target of increasing GDP from Nu 2.2 billion to Nu 13 billion by 2029, major tourism development initiatives will be implemented through the ESP.

Transport

The sector is allocated a budget of Nu 5.85 billion. Surface transport is allocated Nu 3.11 billion for improvement and maintenance of national highways and dzongkhag roads. Air transport to get Nu 292.63 million to support enhancing airport infrastructure, including security and surveillance systems.

Housing and community

To increase the livability index of urban centers and towns, the sector gets Nu 3.87 billion to promote energy-efficient and disaster-resilient buildings and settlements, strengthening transport and mobility and developing green open spaces.

Communications and technology

The sector is allocated Nu 2.56 billion, which is 3 percent of the total budget. This budget is aimed to strengthen the digital ecosystem towards increasing the citizen satisfaction rating for online services to 4.5 by 2029 from 4.1, GDP output from Nu 10 billion to Nu15 billion by 2029 and reduce the cost of internet by 50 percent.

Towards enhancing the percentage of rural areas connected to the network from 97 percent to 99.5 percent by 2029, Rural Communication Project Phase VII will be implemented under Universal Service Fund.

Energy

The sector will see Nu 1.74 billion to implement  projects such as construction and installation of 17.38 MW Sephu photovoltaic solar project, the Alternative Renewable Energy Pilot Project (AREP), the feasibility study of an Integrated Multipurpose Hydropower Project (IMPH) in the Paro Chhu Basin, and the Detailed Project Report (DPR) for the 1800 MW Integrated Gongri and Jerichhu Pumped Storage Hydropower Project.

By 2029, the sector aims to increase renewable energy-generating capacity from 2.1 megawatt peak (MWp)  to 500 MWp and GDP contribution from Nu 29.307 billion to Nu 71.4 billion, and enhance electricity accessibility and reliability.