13th Five-Year Plan with Nu512 BN outlay to be deliberated

13th Five-Year Plan with Nu512 BN outlay to be deliberated

Focus on People, Progress and Prosperity

Bhutan sets its sights on a future of robust growth and prosperity with the approval of its 13th Five-Year Plan (FYP), outlining a comprehensive strategy to propel the nation towards development by 2034. The 13th FYP will be presented to the parliament on June 18th, 2024 for deliberation.

The 13th FYP, with an impressive outlay of Nu 512 billion (B), emphasizes the pivotal themes of People, Progress, and Prosperity, envisioning a Bhutan that is not only economically prosperous but also socially and environmentally sustainable.

A key fiscal policy objective within the plan is to ensure resilient, inclusive economic growth while upholding fiscal prudence and macroeconomic stability. Among the targets set are maintaining the fiscal deficit at an average of three percent of GDP, achieving a tax-to-GDP ratio exceeding 15 percent, and constraining non-hydro debt to below 55% of GDP.

With total resources estimated at Nu 456,345 million (M), the plan relies on domestic revenue of Nu 327,346M alongside grants totaling Nu 125,000M, a substantial portion of which is sourced from external entities, notably the Government of India. Tax revenue is projected at Nu 230,623, with non-tax revenue estimated at Nu 96,723M.

Allocations within the plan prioritize both current and capital expenditures, with a total expenditure estimate of Nu 512,283M. Current expenditure stands at Nu 267,283M, while capital expenditure is earmarked at Nu 245,000M.

Despite meticulous planning, the government faces a resource gap of Nu 15.9B for the budget year, prompting a search for alternative means to address the fiscal deficit.

Critical to the effective execution of the 13th FYP is a robust Monitoring and Evaluation (M&E) system, with efforts underway to strengthen existing frameworks. Spearheaded by the OCASC in collaboration with relevant ministries and agencies, the enhanced M&E system aims to ensure accountability and optimize outcomes across the plan’s objectives.

The 13th FYP encompasses four interlinked objectives aimed at fostering a healthy, prosperous, and secure Bhutan, ultimately culminating in the long-term vision of attaining a “High Income GNH Economy” by 2034. Economic development serves as the cornerstone, supported by a reformed governance ecosystem crucial for successful plan implementation.

Furthermore, a Schedule of Supplementary Budget Appropriation for the FY 2023-2024 has been approved, reflecting a nuanced approach to financial management and adaptability within the broader fiscal framework. The revised budget stands at Nu 88,747.460M, reflecting adjustments to accommodate evolving priorities and exigencies.

By Sangay Rabten, Thimphu