Bhutan – Budget 2016-2017

·         Budget Estimates for FY 2016-2017 :-

The budget for FY 2016-17 is formulated considering the implementation momentum of the agencies gained over the past three years of the 11th FYP. It has also taken into account the Government’s priority and importance of having to complete the FYP activities in the next two years. Therefore, the Government has approved 28.8% of the 11th FYP capital outlay for capital expenditure. This budget also features integration of Budgeting System with the Government Performance Management System (GPMS) linking the agencies targets and objectives to the budget, which is expected to enhance the agencies’ performance in achieving the desired goals. Towards further strengthening the decentralization process and enhancing good governance at the grass roots level, the Government has initiated a system of Dzongkhag Development Grant (DDG) and allocating a share of HRD budget to the Dzongkhags for professionalizing civil service. In addition, the budget for centrally executed activities usually allocated in the central agencies is now decentralized to the Dzongkhags to the extent possible. The Government continues to focus on development of quality education, efficient health services, improving connectivity of road networks and ICTization, food security and poverty alleviation, and preservation of culture. The budget estimates for FY 2016-17 is summarized in the table below.

Budget Estimate Summary for FY 2016-17

·         Resources :-

The total resources estimated for the FY 2016-17 is Nu.41,605.862 million of which the domestic revenue is Nu.27,247.169 million and external grants is Nu.14,338.693 million.

A.    Domestic Revenue :- The estimated domestic revenue of Nu.27,247.169 million represents about 3.6% increase from the previous fiscal year. Tax revenue constitutes 72% and non-tax revenue constitutes 28% of the total domestic revenue estimate for the year. Tax revenue is estimated to increase by 6.6% mostly on account of CIT from DGPC and DHPC. Indirect tax is expected to grow by 7.1% mostly from sales tax, excise duty and green tax. However, non-tax is expected to decrease by 3.2% mostly on account of lower surplus transfer from RMA and interest receipt of Nu.415.051 million from Kurichhu and other loans to corporations.

Revenue Summary for FY 2016 – 2017

B.    External Grants :-  The external grant for the FY is estimated at Nu.14,338.693 million of which the program grant is Nu.1,700 million and project-tied grant of Nu.12,638.693 million. This external grant is estimated to cover 27.6% of the total expenditure. The project tied grant from the Government of India is Nu.9,925.441 million. The other major external grants are Nu.545.263 million from ADB, Nu.425.016 million from UN agencies, Nu.171.008 million from the Government of Netherlands, Nu.252.457 million from EU, Nu.134.419 million from WHO, Nu.116.451 million from World Bank and balance are from various other development partners.

·         Total Expenditure :-

The total estimated expenditure of Nu.51,884.364 million consists of about 49% current and 51% capital expenditure. With negative net lending of Nu.1,902.780 million, the outlay for the FY is Nu.49,981.584 million.

A.    Current Expenditure :- The current expenditure is estimated at Nu.25,387.034 million which is 93.2% of the domestic revenue and 16% of the GDP. The composition of current expenditure is as provided in the table below :-

The increase in current expenditure is mainly due to upward revision of pay and allowances for Royal Bhutan Police, provident fund and pension for armed forces, establishment of additional central schools and revision of stipend and daily allowances for mask and folk dancers in the Dzongkhags.

B.    Capital Expenditure :- The estimated capital expenditure of Nu.26,497.330 million is about 51% of the total expenditure. Of the total capital expenditure, 54.1% (Nu.14,338.693 million) is from external donors, 13.5% (Nu.3,567.345 million) from external borrowing and the rest from domestic revenue and internal borrowings.

C.    Subsidies, transfers & Equities :- The total expenditure also includes subsidies, transfers and equities to autonomous agencies and State Owned Enterprises amounting to Nu.2,264.453 million. Of the total, Nu.1,266.303 million is for current subsidies and Nu.998.150 million is for capital subsidies to various agencies detailed in the table below.

The capital subsidies includes Nu.609.500 million to four Thromdes for the development of urban roads, water supply, sewerage systems, and other developmental activities and Nu.60.850 million to BBSCL for procurement of transmission equipment and construction of five new FM/TV stations.

A sum of Nu.200 million is also provisioned for equity injection to Green Bhutan Corporation Ltd., Menjong Sorig Pharmaceuticals, Royal Bhutan Lottery Ltd. and Farm Machinery Corporation Ltd.

In order to solve the severe housing crunch in Phuentsholing, the Government has initiated construction of affordable housing units for which Nu.50 million is allocated for ancillary facilities and Nu.50 million as an interest subsidy in the FY.

Details of Subsidies, Transfers & Equities

D.   Net – Lending :- To achieve the Rural Electrification (RE) program by the end of 11th FYP, the Government has availed concessional loans from bilateral and multilateral development partners. During the FY, Nu.120.766 million will be on-lent to BPCL to continue the RE works.

Total recoveries from the corporations are estimated at Nu.2,023.546 million. Since the recoveries are more than on-lending, the net lending is negative Nu.1,902.780 million.

The details of the on-lending and recoveries are in the following table.

Net – Lending for FY 2016 – 2017

·         Financing :-

A.    External Borrowing :- The estimated total external borrowing is Nu.3,567.345 million comprising of project-tied borrowing of Nu.920.745 million and program borrowing of Nu.2,646.60 million (Nu.1,320 million from the World Bank for Development Policy Credit and Nu.1,326.60 million from ADB for Strengthening Economic Management Program II). The project-tied borrowings are mainly from ADB, World Bank and Japan International Cooperation Association for developing urban infrastructures, rural electrification, strengthening regional cooperation for wildlife protection, commercial agriculture and resilient livelihood enhancement programme and remote rural community development.

External Borrowings during FY 2016 – 2017

·         Public Debt Stock :-

A.    External Debt Stock :-

Based on the planned disbursements for the ongoing projects and anticipated new loans, the external debt stock is estimated to be Nu.164,253.438 million by the end of FY 2016-17. This is about 104.2% of the estimated GDP.

The external debt stock is expected to grow by 14.9% on account of disbursement for ongoing hydropower projects (Puna I, Puna II, Mangdechhu, Nikachhu and Kholongchhu).

Of the total external debt stock, Nu.130,045.678 million is on account of hydropower projects. Since these projects are considered to be commercially viable, they could service their debt through export of their own proceeds. The non-hydropower loans, which is 21.7% of the estimated GDP is borrowed from multilateral financial institutions and bilateral countries at concessionary terms.

B.    Domestic Debt Stock :-

The domestic debt stock is estimated to be Nu.57.344 million by the end of FY on account of loan availed by the Government from the National Pension and Provident Fund (NPPF) for the construction of staff quarters of Phuentsholing hospital.

The estimated resource gap of Nu.7,631.475 million will be financed through issuance of Treasury bills of various maturities and longer term bonds to promote debt and capital market.

C.    Debt Servicing :-

The total debt services for the FY 2016-17 is Nu.8,236.420 million of which Nu.4,815.416 million is through the budget.

The principal repayment through the budget is Nu.2,823.098 million of which Nu.2,813.904 million is on account of external loans and Nu.9.194 million is for domestic loans.

The interest payment through budget during the FY is estimated to be Nu.1,992.318 million of which Nu.1,887.338 million is on account of external loans and Nu.104.980 million is for domestic loan. The interest payment for GoI hydropower loans is estimated to be Nu.1,243.714 million which constitute about 62.4% of the total interest payment through budget.

The total debt service ratio for the FY 2016-17 is estimated at 16.3% and is expected to improve over the period at the end of FY owing to expected increase in exports. Similarly, the debt service ratio through budget for the FY is estimated at 9.4%.

Statement of Debt Service through Budget for the FY 2016 – 2017

The total allocation including lending and repayment is Nu.54,828.228 million, of which the current expenditure is 46%, capital expenditure is 48%, lending is 1% and repayment 5% as indicated in the table below.

Expenditure Classification

·         Sector Allocation :-

Sector Allocation for the FY 2016 – 2017

A.   Health Sector :-

The government accords priority in providing equitable and free health care services including referral outside. The sector is being confronted with varied challenges related to rising health care expenditure due to changing lifestyle and disease pattern, shortage of human resources and new health technologies. Therefore, Nu.4,505.796 million is allocated to address these challenges and towards achieving the sector’s objectives.

In order to create better health infrastructure for improved access to health facilities and providing better services, budget provision of Nu.393.448 million has been made for construction of Haa district hospital (20 beds), Gelephu central regional referral hospital (150 beds), Tsirang district hospital (20 beds), Dewathang hospital (40 beds), Gyaltsuen Jetsuen Pema Mother and Child Hospital (150 beds) and additional wing at JDWNRH. Further, a sum of Nu.11.500 million is allocated for epidural labour analgesia services.

A sum of Nu.81.25 million is allocated for procurement of ambulances, strengthening health help centre and for safe and quality health technologies. As the availability of adequate and skilled human resources is imperative for providing quality service, Nu.310.050 million is allocated for capacity building. Health programs are also being implemented to combat both communicable and non-communicable diseases for which Nu.160.931 million is allocated.

In order to continue providing indigenous health services, Nu.13.316 million is budgeted. A new Local Healing and Spiritual Heath Division has been created under Department of Traditional Medicine (MoH) for treating mental health, local healing practices, spiritual health, spa and wellness services.

For providing continued primary health care services and uninterrupted supply of drugs and equipment, Nu.466.800 million is allocated for purchase of drugs/ non-drugs/reagents, Nu.202 million for referral of patients outside, Nu.141.860 million for procurement of medical equipment and its spare parts and accessories. Promoting access to safe, clean and convenient drinking water is one of the priorities of the Government. A sum of Nu.388.120 million is provided in various Dzongkhags and Gewogs for construction and maintenance of RWSS and water source protection. Further, to ensure that this basic service is accessible by all the people, the RWSS status and activities is closely monitored and evaluated by the Ministry of Health.

Of the total health sector allocation, Nu.1,489.967 million is allocated under Dzongkhags and Gewogs for implementing various health related programs and activities.

Major Activities in the Health Sector

B.   Education Sector :-

In view of the importance of quality of education and in line with the Bhutan Education Blueprint 2014-2024, Nu.10,924.282 million is allocated to bring reforms to enhance access and quality of education.

As part of the school reform programme, 24 central schools were established in 2015 and 27 in 2016 and a provision for another eight central schools is earmarked to be established in 2017 academic year. A sum of Nu.1,623.18 million is allocated for operation and maintenance of central schools and Nu.1,352.659 million for development of additional infrastructures and facilities. Of the total allocation for infrastructure development, Nu.661.569 million is budgeted under Dzongkhag Education Sector.

Enhancing quality of education emanates from a set of good faculties and facilities in all educational institutes. As such Nu.116.848 million has been allocated for professional development of teachers in schools and Nu.22 million and Nu.10.820 million for faculty development of Royal University of Bhutan (RUB) and Royal Institute of Management (RIM) respectively.

In addition, Nu.30 million is provided for setting up of computer laboratories for introduction of IT courses in schools where it has not been initiated yet. RUB is also allocated with Nu.437.872 million to improve infrastructure and other facilities in all the colleges. Further, Nu.23 million is earmarked to initiate preparatory works for establishment of three colleges in Mongar, Trashigang and Trashi Yangtse.

In order to provide opportunities to pursue higher studies, a sum of Nu.1,006.471 million is allocated for various scholarships both within and outside the country and Nu.25.8 million for assistance to privately enrolled medical students. Further, Nu.37.620 million is allocated for providing interest free education loans to economically disadvantaged students to pursue higher studies. To improve the facilities and access to education for differently abled students, about Nu.24 million is allocated for infrastructure development and training. Moreover, Nu.43.651 million is allocated to strengthen Early Childhood Care and Development (ECCD), Nu.82.189 million for Non-Formal Education (NFE) programme.

Improving quality and maintaining relevance of curriculum is imperative in the education sector. The Royal Education Council is allocated with Nu.37.155 million to develop curriculum/text books, conduct seminars/workshops, review, selection and approvals of teaching and learning material.

Of the total allocation for this sector, Nu.6,373.264 million is budgeted under Dzongkhag Education Sector.

Major Activities in Education Sector

C.    Renewable Natural Resources ( RNR ) Sector :-

The sector is allocated Nu.6,604.791 million towards achieving sustainable social and economic well-being through enhancement of access to food and natural resources. Therefore, the sector continues to focus on sustainable agriculture and livestock practices and production, conservation and management of forest resources and biodiversity.

To enhance crop production and ensure markets for RNR products, the government is making efforts to improve agriculture infrastructure. Therefore, Nu.433.806 million is allocated for development and improvement of irrigation channels, Nu.1,260.873 million for construction and rehabilitation of farm roads and Nu.47.500 million for establishment of farm shops in Dzongkhags and Gewogs and cold storage at Nganglam. In addition, Nu.50.356 million is allocated to strengthen FCBL for value chain development and marketing.

Nu.12 million is also allocated to continue the works on development of Royal Agriculture and Research Development Centre which will serve as a forum for demonstration of improved crop production system and promote farming as an occupation. Further, Nu.50 million is allocated for continuing the works on development of Phuentshothang Agriculture Rehabilitation Project. This project is expected to substitute import of rice. To enhance the agriculture productivity, the Government distributed 252 powertillers to the Gewogs as of May, 2016.

On the livestock front, the sector seeks to enhance self-sufficiency of livestock products through various on-going initiatives. Since the progress of Livestock Project is on track, Nu.241.262 million has been allocated for the sector. Besides, the sector also undertakes various Commodity Development Programs for which Nu.113.072 million is allocated. For providing effective livestock support services, Nu.21.350 million is also allocated for completing the on-going construction and establishment of National Animal Hospital at Thimphu and Nu.34.300 million for procurement and distribution of veterinary medicines, vaccines and equipment.

With regard to promotion of sustainable management and conservation of natural resources and biodiversity, Nu.75.916 million is earmarked for implementing projects on REDD+ (reduce emissions from deforestation and forest degradation) strategy to reduce carbon emission through sustainable forest management. In addition, the sector is also allocated Nu.47.690 million for plantations to increase the areas under afforestation and reforestation.

For enhancing national bio-security and bio-safety, Nu.27.200 million is allocated for ongoing construction of BAFRA office in Trashigang, bio-security office in Phuentsholing, quarantine station in Nganglam and procurement of incinerators

Of the total allocation for the sector, Nu.2,886.799 million is allocated under Dzongkhag RNR sector mainly for the construction and maintenance of farm roads, irrigation channels, RNR centres, livestock and forestry development programmes.

Major Activities of RNR Sector

D.   Mining & Manufacturing Industries :-

This is the sector where the government could enhance and develop export, diversify and expand the economy by promoting cottage and small industries, and entrepreneurship. As such a sum of Nu.1,235.148 million is allocated to support the sector.

The effort to develop Special Economic Zones (SEZs) will be continued to enhance economic expansion and diversification and Nu.382.831 million is allocated for ongoing SEZ works at Jigmeling (Sarpang), Dhamdum (Samtse), Motanga (Samdrup Jongkhar) and Bondeyma (Mongar).

To support trade facilitation, Nu.80.367 million is allocated for ongoing developmental works for mini-dry port at Phuentsholing and Nu.26.162 million for marketing, exhibition, Brand Bhutan, etc.

For the development and promotion of cottage and small industries, a sum of Nu.60 million is allocated for the construction of indigenous Craft Bazar, Nu.4.500 million for capacity building of potential entrepreneurs and Nu.2.500 million for Rural Enterprise Development Scheme. Also, Nu.22.900 million is allocated for the construction of business incubation center to create an enabling environment for the entrepreneurs.

Under Geology and Mines, Nu.33.548 million is allocated for geological mapping of mineral exploration and mineral development in sustainable and environment friendly manner and Nu.10.121 million for mitigating risks associated with Glacial Lake Outburst Flood.

Major Activities in Mining & Manufacturing Industries

E.    Tourism :-

Tourism is one of the important sectors which generates revenue, employment and earns convertible currency. Nu.113.390 million is allocated for development of tourism infrastructures and public service delivery to promote Bhutan as an exclusive and year-round tourist destination.

To address the tourism related impacts, it is important to have standards put in place that can ensure sustainability of the industry. Therefore, Nu.1.950 million is allocated for development of “Bhutan Tourism Monitor” and Nu.0.855 million for carrying out tourism related research.

Nu.10 million is also allocated for construction of roadside amenities, development and maintenance of trekking routes, campsites and trail bridges.

In order to promote Bhutan as an exclusive travel destination in international markets, Nu.25.514 million is allocated for organizing road shows, participation in travel fairs and development of online promotional programmes.

Major Activities in the Tourism Sector

F.    Vocational Training & Employment :-

The Government has been taking various initiatives to provide gainful employment to all Bhutanese jobseekers. In order to support the initiative of achieving optimal employment, Nu.364.251 million is allocated for the sector.

Nu.166.782 million is allocated for enhancing quality and diversification of Technical and Vocational Education Training which is one of the major initiatives undertaken by the sector.

A sum of Nu.10.76 million is allocated to encourage youth to undertake entrepreneurship as a preferred career option and Nu.82.481 million to execute Guaranteed Employment and Overseas Program. Further, Nu.80 million is also provided for youth employment skills and development of human resources in private sector.

Major Training in Vocational Training & Employment

G.   Roads Sector :-

A sum of Nu.5,817.692 million is allocated for the road sector towards enhancing road connectivity, ensuring reliability and commuter’s safety through double-laning of Northern East-west highway, maintaining national highways, Dzongkhag roads, Gewog Connectivity (GC) roads and bridges across the country.

To promote balanced economic development, Nu.1,470 million is allocated for double-laning of Northern East-West Highway and it is expected to be completed by December 2017. Also, Nu.1,157.046 million is allocated for ongoing constructions of Gyalpoishing-Nganglam, Gomphu-Panbang, Mamung-Digala, Dalbari–Dagapela (Dagana) and Haa-Samtse, Samtse-Phuentsholing, Pasakha access road and Refe-Khosala highways.

Nu.268.875 million is allocated for continuation of construction of GC roads, permanent works and bridges. In addition, Nu.1,261.182 million is allocated for blacktopping of 77 GC roads including 32 which are ongoing.

Regular maintenance of roads and bridges are carried out annually for which Nu.310.121 million is allocated.

Major Activities in the Road Sector

H.   Urban Development, Housing & Public Amenities Sector :-

For developing sustainable urban plans and urban amenities, a sum of Nu.3,513.919 million is allocated. The allocation includes Nu.29.9 million to initiate preparatory works for Yenglag Thromdes and Nu.6 million to carry out studies and research to develop appropriate housing framework, creating enabling environment for well-functioning housing market, enhance access to affordable housing and home ownership.

The ongoing major activities include Langjophakha Local Area Plan (LAP), Taba LAP, central water supply scheme and construction of waste water treatment plant at Babesa, urban infrastructure development of Bumthang, Kanglung, Nganglam, Phuentsholing, Samdrup Jongkhar, Pema Gatshel, Mongar, Tsirang and Samtse for which Nu.814.530 million is allocated.

National Housing and Development Corporation Limited is allocated Nu.65 million in the form of interest subsidy for construction of housing colony at Phuentsholing and maintenance of Government quarters.

Major Activities in Urban Development, Housing & Public Amenities

I.    Communication Sector :-

Nu.1,382.806 million is allocated for maintaining a well-developed communication network and good transportation facilities which is an integral part of socio-economic development.

The air transport continues to receive substantial allocation under the sector to enhance safe and reliable air transport services. For this, Nu.70 million is earmarked for re-shaping of obstructing hills, construction of access road and car park at Yonphula Domestic Airport, Nu.99 million for construction of parallel taxiway at Paro International Airport, Nu.25.2 million for construction of terminal building at Bumthang Domestic Airport and Nu.10 million for construction of security quarters at Gelephu Domestic Airport.

To improve access to reliable and affordable ICT services, Nu.59.5 million is kept to revamp Thimphu Wide Area Network and extension to Dungkhags and Gewogs, Nu.13.53 million for Online Collaborative Suite Project and Nu.21.43 million for G2G project.

Further, Nu.23.847 million is allocated to support professionalization of media personnel and industry through public awareness, trainings/seminars/ workshops and media impact study.

Major Activities in the Communication Sector

J.    Energy Sector :-

A sum of Nu.418.666 million is allocated to accelerate hydropower development and enhance energy security, improve access to clean and affordable energy and improve weather & climate monitoring services.

Preparation of reconnaissance studies of three projects (Amochhu-I & II and Samechhu) will be undertaken for which Nu.1.297 million is allocated and Nu.10 million for human resource development to strengthen the energy sector.

Nu.44.62 million is allocated for the construction of 132 KV-MotangaPhuentshothang (Bangtar) line (22 KMs) and Nu.38.48 million for the construction of 132 KV Kanglung-Phuentshothang line (52 KMs) to strengthen transmission network.

For rural electrification of Soe and Lingshi Gewogs, a sum of Nu.14 million is allocated and Nu.39 million to bring off-grid households into on-grid.

To support the initiative to move towards diversification and promotion of alternate renewable energy, Nu.8.840 million is allocated for providing fuel efficient stoves in rural areas and demonstration of biomass energy technologies to the industries.

Further, to develop effective hydro-meteorological and flood warning services network and database, Nu.118.105 million is allocated for site development, procurement and installation of Automatic Weather Stations.

Major Activities in the Energy Sector

K.   Religion & Cultural Services :-

In order to preserve and promote culture through conservation of tangible and intangible cultural heritage and to support the continuity and development of significant cultural expression, Nu.2,330.764 million is allocated.

A sum of Nu.128.659 million is allocated for re-construction of Wangdue Phodrang Dzong, Nu.102.415 million for construction of Pema Gatshel Dzong, Nu.40.792 million for construction of Sarpang Dzong and Nu.50 million for construction of Drugyel Dzong.

The ongoing renovation and re-electrification works for Trashigang, Gasa, Trongsa and Paro Rinpung Dzongs will be continued with Nu.114.941 million. The sector budget also includes construction and renovation of Lhakhangs and temples that contributes towards promotion and preservation of tangible cultural heritage sites. A sum of Nu.150.762 million is allocated for Phajoding Conservation project, renovation of Paro Ta-Dzong, renovation of Wangdichoeling Palace, restoration of Tango Monastery and Wangditse Dzong and reconstruction of Chari Monastery.This sector budget includes Nu.805.290 million allocated in the Dzongkhags and Gewogs.

Major Activities in the Cultural Services

L.    Law & Order :-

A sum of Nu.2,455.705 million is allocated for Law and Order sector. This includes allocation for Judiciary, Royal Bhutan Police, Office of the Attorney General, Bureau of Law and Order, Royal Institute of Law and Bhutan National Legal Institute.

Royal Bhutan Police is allocated with Nu.1,846.804 million for operation and maintenance, infrastructure and professional development.

The sector allocation also includes Nu.45.400 million for construction of common check posts at Nganglam, Samtse and Raidak. The allocation for the Judiciary is presented separately in the later part of this chapter.

Major Activities in Law & Order

M.   General Public Service :-

This sector includes local government (civil sector), finance, foreign, constitutional bodies, immigration, civil registration and some autonomous agencies and commissions for which a sum of Nu.10,702.477 million is allocated. In order to enhance efficiency, effectiveness, transparency, accountability and compliance in the government system, Nu.10.70 million is allocated to the Ministry of Finance for development of online Electronic Government Procurement (e-GP) system. This system is intended to improve and modernize procurement procedures of the Government leading to competitive prices for goods and services.

Under the Ministry of Foreign Affairs, Nu.100 million is kept for the construction of chancery building and ambassador’s residence at Royal Bhutan Embassy (RBE), Bangkok and Nu.1.500 million for preparatory works for chancery building at RBE, Dhaka. Also, Nu.36.377 million is allocated to complete the ongoing construction of staff quarters at RBE, New Delhi.

The third phase of National Cadastral Re-survey Project is underway for which Nu.37.200 million is allocated for data correction exercise and resurveying of pending and absentee cases in all 20 Dzongkhags.

Nu.13.050 million is allocated for Rural Economy Advancement Programme (REAP) for various income generating activities in 33 identified villages. The activities include training, supply of equipment, materials for construction of sheds, market linkages and transportation. Also, Nu.5.500 million is allocated for targeted interventions in the poorest households which include improvement of housing, sanitation and human wild-life conflict management.

Nu.31.051 million is allocated for ongoing construction and site development of office building for Department of Civil Registration and Census and Department of Immigration.

Major Activities under General Public Services

N.   General Reserves :-

A provision of Nu.2,830 million has been kept as general reserve. The allocation will be transferred to the agencies on actual basis subject to fulfilling established criteria and formalities.

The reserve also includes provision of Nu.300 million for purchase of vehicles to replace for those eligible to dedicated vehicle as per relevant laws, rules and policies and agencies involved in crucial service delivery.

Details of General Reserve

O.   Human Resource Development :-

A total of Nu.1,024.190 million has been allocated for capacity development activities under various agencies. The details are provided in table below:

Major Activities for Human Resource Development

P.   Sports :-

A sum of Nu.311.219 million is allocated to the Bhutan Olympic Committee (BOC), Ministry of Education and Dzongkhags to support development and promotion of sports in the country. It includes development of sports infrastructures, youth programs, participation in the international events and trainings. Of the total allocation, Nu.146.314 million is for BOC, Nu.75 million for National Sports Federations, Nu.2.800 million for Bhutan Indigenous Games and Sports Association and Nu.87.105 million for development of sports facilities and programs in various schools.

Q.   Gender Responsive Budgeting :-

As an initiative to institutionalize Gender Responsive Planning and Budgeting, a study was carried out to examine the policies and programmes of agriculture, health and education sectors from gender perspective. The study recommended future action in the three sectors for engendering the national planning and budgeting processes. Towards this, the budget call circular for FY 2016-17 notified the three pilot sectors to state Ministry’s policies and Key Result Areas and their contribution to gender related goals.

R.   Local Government :-

The total budget allocated to Dzongkhags and Gewogs is Nu.15,305.735 million, of which Nu.12,643.912 million is for Dzongkhags and Nu.2,661.823 million for Gewogs.

Sector wise distribution of Dzongkhags and Gewogs allocation is as provided in the chart below.

Sector wise Dzongkhags and Gewogs budget distribution (Nu. in millions)

The above allocation for LG includes Dzongkhag Development Grant (DDG) of Nu.7 million for each Dzongkhag initiated from this FY in line with the policy of Wangtse Chirphel to further deepen the decentralization process. This initiative is expected to bring about autonomy and flexibility for Dzongkhags towards achieving their objectives. It also includes Nu.100 million for strengthening human resource development in the Dzongkhags.

Besides the above allocation, there are centrally executed activities which benefitted the people and communities of the Local Government. For the FY, a total allocation of Nu.3,183.330 million is kept with the central agencies meant for the Dzongkhags and Nu.1,904.326 million for Gewogs. Similarly, a sum of Nu.2,751.065 million is kept with the Dzongkhags for executing activities meant for Gewogs. Considering the above allocation from central agencies, the Local Government receives about 47% of the total capital allocation as against their plan allocation of 27%.

The table below shows the actual allocations of Dzongkhags and Gewogs. This is excluding the provision kept for activities to be executed by the central agencies on behalf of the Dzongkhags and Gewogs.

With inclusion of the provision kept in the central agencies, the total allocation for the Dzongkhags and Gewogs is as shown in the table below.

The details of capital allocation from central agencies to Dzongkhags are in Annexure 1 and allocation from central agencies and Dzongkhags to Gewogs are in Annexure 2.

In addition to the above allocations to the Local Governments, four Thromdes will receive Nu.1,656.506 million to implement their planned activities and Nu.960.912 million for schools under Thromdes. With the inclusion of provision for the Thromdes, the share of LG is about 44.4% of the total allocations for FY 2016-17.

S.    Legislative, Judiciary & Constitutional Bodies :-       

1)   National Assembly  ( NA ) :-

A budget provision of Nu.105.292 million is recommended for the National Assembly. The current expenditure includes Nu.1.400 million for maintenance of security system and fire services for Gyalyong Tshokhang and Nu.9.206 million for Parliamentary Exchange Programme.

Under the capital budget, Nu.0.880 million is recommended for training of Committee Secretaries on basic interpretation of legal provisions and for the purchase of office equipment and accessories.

However, the proposed amount of Nu.28.550 million for establishment of parliamentary radio station and Nu.3.342 million for procurement of pool vehicle is not recommended.

2)   National Council ( NC ) :-

A provision of Nu.84.191 million is recommended for the National Council. The current budget includes Nu.1.800 million for printing of acts and resolutions, Nu.0.650 million for maintenance of x-ray machine and Nu.0.350 million for advocacy program on the roles and functions of the Parliament.

A sum of Nu.7.610 million is recommended for capital activities. This capital budget includes Nu.1.500 million for procurement of x-ray machine and Nu.2.600 million for procurement of explosive vapour detector.

The proposal for construction of additional NC office is not recommended.

3)   Judiciary :-

To strengthen structural and institutional independence of the Judiciary and to enhance equal and unimpeded access to justice, the Judiciary is recommended Nu.317.394 million.

Nu.20 million is recommended for the ongoing construction of two Dzongkhag Courts at Wangdue Phodrang and Punakha. In addition, Nu.13 million is recommended for the construction of courts in Haa and Sarpang. Further, Nu.2 million each is recommended for construction of Drangpon’s residence at Wangdue Phodrang and Punakha Dzongkhags.

Nu.18 million proposed for construction of Drangpon’s residence at Samdrup Jongkhar and Bumthang is not recommended. However, the procurement of vehicles for Drangpons is being taken up separately.

4)   Anti – Curruption Commission ( ACC ) :-

Towards achieving their annual performance targets, Nu.123.194 million is recommended.

Of the total recommendation, Nu.5.7 million is recommended to implement media strategy, conduct advocacy programs in Gewogs, agencies and schools, development of information, education and communication materials, publish annual report with an objective to enable society to widely apply high moral principles and act against corruption.

To mainstream Anti-Corruption measures effectively in sectoral plans and in public and private institutions, Nu.18.3 million is recommended to implement business code of conduct, corporate integrity pledges and other integrity instruments in private firms, coordinate integrity programs related to youths, etc.

Nu.52.747 million is recommended to enhance case management system, preparatory works for construction of ACC office building in Phuentsholing, strengthen surveillance infrastructure, implement Human Resource Development Master Plan 2015-2020 and amend gift rule towards achieving a credible and effective institution. Nu.46.477 million is also allocated for meeting administrative and other operational costs.

5)   Election Commission :-

A sum of Nu.75.917 million is recommended to achieve the annual performance targets set for the FY.

 From the total recommended budget, Nu.20.188 million is for updating and preparation of electoral rolls for election, delimitation of Parliamentary Demkhungs, bye-election for parliamentary and local government Demkhungs, conduct of LG election and functional literacy test in vacant Demkhungs.

Nu.7.457 million is recommended to improve participation in electoral and political processes through Bhutan children’s parliament session, electoral experience sharing and collaboration network, Bhutan Democracy Dialogue training of party functionaries and members, study tour and conference.

To strengthen the institute and enhance electoral system through developing e-library, research and publication, review of electoral documents, learning from experience program and ECB conference, Nu.13.658 million is allocated.

6)   Royal Audit Authority ( RAA ) :-

Royal Audit Authority has the recommended budget of Nu.311.051 million to achieve their annual performance target set for the FY 2016-17.

To improve public resource management and accountability system through participation in trans-regional audits, outsourcing of audit services, capacity building, carrying out audit awareness and advocacy in selected Gewogs, engaging external expertise in auditing, Nu.18.462 million is allocated.

Nu.31.848 million is recommended for strengthening capacity and Nu.92 million for ongoing construction of professional development center and site developments and Nu.10 million for furnishing of training center at Tsirang.

For operation and management services of Head Office and four regional offices, printing of annual audit report, mandatory meetings, conference and workshops, Nu.164.241 million is recommended.

7)   Royal Civil Service Commission ( RCSC ) :-

The recommended budget for RCSC is Nu.286.954 million to achieve their Annual Performance Target set for the FY 2016-17.

Nu.16.672 million is to strengthen Bhutan Civil Service system through conduct of Bhutan Civil Service examination, improve web based services and HR auditing and Bhutan civil service reforms. Nu.14.7 million is allocated to ensure quality and sustained leadership in the civil service by providing both in-country and ex-country trainings to executives and conduct executive forums.  

To enhance civil service efficiency and effectiveness, Nu.5.496 million is allocated for development of online system for managing excellence.

Nu.0.750 million is for enhancing civil service well-being and Nu.191.726 million for professionalizing civil service, Nehru-Wangchuck scholarship, Young Professional Leadership program and other HRD programs.

For administration and management services, organizational development exercise, civil service award, consultative meeting on BCSR 2016 and commission meetings, a sum of Nu.57.610 million is allocated.

·         Tax Measures :-

As part of the fiscal measures, the Government is proposing few tax measures to ensure fair, uniform and efficient tax system.

The tax measures are proposed as a Money Bill.