This is Nu 0.01bn more than the original estimate
The fiscal deficit in absolute figures has increased to Nu 15.33bn from the original estimate of Nu 15.32bn due to incorporation of loan-funded activities.
However, this impact on the net internal borrowing as equivalent amount was realized through external borrowing.
The first quarter budget performance report 2020-21, a first kind of report on the budget performance that the Ministry of Finance has published, states that the overall resource has increased by about 2% while the expenditure increased by about 1.7% from the original budget of FY 2020-21.
The increase is attributed to incorporation of donor support of Nu 1.19bn which is exclusive of National Resilience Fund of Nu 4.34bn.
However, the fiscal balance as percentage of GDP (7.36%) remains unchanged at the end of first quarter due to equivalent receipt of funds.
The total resource realized in the first quarter is about 21% against the estimates. The domestic revenue realized in the first quarter against the estimate is about 25% whereas the domestic revenue realized in the first quarter of last FY 2019-20 was 17% only. The increase in the revenue realized was due to receipt of outstanding revenue collection from Mangdechhu Hydro Power Project.
Against the release of Nu 13.3bn the expenditure spent is Nu 8.8bn of which 13% of the total expenditure was released at the end of the first quarter.
The increase in the capital expenditure is about 3.34% whereas the current expenditure has decreased by about 0.05%. The increase in the capital expenditure compared to original estimates was due to incorporation of Nu 1.19bn funded by donor agencies. Similarly the decrease in the current expenditure is mainly due to apportionment of current budget to capital budget by the budgetary agencies as permissible by the Financial Rules and Regulation 2016.
The total budget of Nu 1.07bn has been provided to budgetary agencies for COVID-19 containment measures. Of the total Nu 714.318mn was transferred from General
Reserve and Nu 362.342mn was supported under external funding.
Of the total budget, Nu 745.279mn was used for procurement of Personal Protective Equipment, drugs and non-drugs and Nu 131.695mn for quarantine facilities as of September 30.
The total revised budget appropriation at the end of first quarter stands at Nu 70.34bn including lending and repayment. Of the total revised budget, a sum of Nu 13.3bn which is 19% had been released and the expenditure spent is Nu 8.8bn which is13%.
Despite the nationwide lockdown during the first quarter, the overall budget utilization has not been impacted much as compared to the first quarter of last FY which was 14%.
The revised current budget at the end of first quarter has decreased to Nu 32.88bn from Nu 32.9bn. From the total revised budget, around 25% has been released and expenditure reported is 20%.
The revised capital budget amounts to Nu 37.84bn and the release against the revised budget is Nu 4.93bn which is 13% and the expenditure reported is Nu 2.11bn which is 6%.
As per the past trends, the capital budget utilization for the first quarter is approximately 10%. This is mainly on account of preparatory works and procurement process being carried out in the first quarter except for spillover and previous year advance adjustments.
During the FY, Nu 3.33bn was allocated under the General Reserve to be transferred to the agencies after fulfilling the established criteria. At the end of first quarter, about 28% of the budget worth Nu 933.502mn has been transferred to various agencies as compared to 8% in the first quarter of last FY. Most of the fund transfer from General Reserve was for the COVID-19 containment measures.
The total amount of external borrowings received in the first quarter is about 0.87%.During the first quarter of the last FY, 25% of the estimated external borrowing was received. As of first quarter, the total amount received is Nu 35.211mn of the total amount borrowing Nu 4.032bn.
On the domestic borrowing, the opening balance of T-bills during the first quarter was Nu 1,600mn. During the quarter N 4,000mn worth of T-bills were issued to finance the resource gap and Nu 3,600mn worth of outstanding T-bills was redeemed during the quarter. The outstanding T-bills at the end of first quarter is Nu 2,000mn. Compared to the first quarter of last FY, the T-bill outstanding is reduced by 39%.
The report states that difference between actual expenditure and releases can mainly be attributed to unadjusted advances which will be adjusted during the course of the FY. Further with the improvement of the COVID situation and necessary interventions from the government, the implementation of the capital activities is expected to pick up thereby improving the budget utilization.
It states that the launch of the Budget Monitoring System (BMT) from this FY is also expected to enhance budget utilization as it will enable monitoring the implementation of the activities on real time basis.
Dechen Dolker from Thimphu