During the State of The Nation, Prime Minister, Dasho Tshering Tobgay said that currently, the total national debt stands at Nu 171bn, a major part of which funded hydropower construction.
However, Lyonchhen assured that “while we should be concerned, hydropower debt will be paid back by hydropower earnings.”
As of today, non-hydropower loan has decreased to Nu 34.5bn.
Lyonchhen added that the government has adopted a National Debt Policy, which will ensure that governments are not irresponsible.
The World Bank and International Monetary Fund have predicted that Bhutan will continue to be one of the fastest growing economies in the world even as the Gross Domestic Product grew by 6.5% in 2015 and 6.9% last year.
“On the other hand, our foreign currency reserves are healthy,” said Lyonchhen Dasho Tshering Tobgay. As of June 2 this year, the foreign currency reserve reached US$ 1.067bn of which US$ 792.4mn is foreign currency and 17,789.88mn is INR.
Lyonchhen said proper management of foreign currency reserves has addressed INR shortage problems. In addition, Royal Monetary Authority (RMA) surplus has increased rapidly and this year, RMA is expected to contribute Nu 1bn as domestic revenue.
The reduction of interest rates on loans from 12.61% to 11.24% has benefitted people by Nu 2.03bn.
Around 73,148 people with up to a maximum of Nu 10,000 benefited due to increase in basic exemption limit and 42,002 tax filers were fully exempted from paying Personal Income Tax for income year 2016.
Lyonchhen also said that pilgrimages are one major source of INR out flow. INR 969.85m was provided to 50,127 pilgrims for the period of April 2016-March 2017.
Lyonchhen Dasho Tshering Tobgay said that so far, 89 gewogs have black-topped roads, 71 gewog center roads are under construction, 66 are being blacked-topped and 24 roads will be black-topped this year.
“I am pleased to announce that the government will be providing each dzongkhag one excavator, one backhoe and one compressor each. This investment will enable local governments to build, upgrade and maintain the farm roads,” said the PM.
In the last four years 2,766kms of farm road have been built and 1,146.29kms renovated. In total 3,566km of farm road will be constructed in the 11th Five Year Plan (FYP).
Lyonchhen also said that the government has achieved 99.8% of rural household electrification. As of February this year, 46,578 households were electrified.
About 94% of rural Bhutan has mobile connection. This year, 64 more villages will be connected achieving almost 100% cellular coverage in the country.
Lyonchhen said that people in rural areas are grateful for farm shops. They can buy rice, cooking oil, powdered milk and other supplies at FCB rates.
So far, the government has built 119 farm shops and 35 are under construction. This year, 51 farm shops will be built.
Currently 65 gewogs have access to fuel and this year, fuel outlets will be built in 140 gewogs.
Around 198 gewogs banks have been established and 11,697 accounts created with a total of Nu 271mn transaction and Nu 75mn of savings.
Lyonchhen said that understanding the expenses incurred when a life is lost, the cabinet approved the revised rural life insurance with effect from July 1. Under the new scheme the insurance cover has increased from Nu 15,000 to Nu 30,000. Further, the insurer is required to pay Nu 87 and government provides premium subsidy of Nu 108.
Last year, the five hydropower plants under Druk Green Power Corporation generated 7,573.84MUs of electricity, an increase of 2.3% from the 2015 generation.
Earnings from hydropower is expected to increase as loans from 60MW kurichhu project have been cleared. Kurichhu loan was liquidated in January 2016
Similarly, the loan for the 1,020 Tala project will be cleared by December 2018.
Currently, there are 30 active mines and 36 active quarries in the country covering an area of 3,456.52 acres. Revenue generated from the mining sector excluding contributions from business or corporate income taxes and any other taxes in 2016 was Nu 336mn.
The revised royalty rates increased the domestic revenue by Nu 36mn in the last six months.
Lyonchhen said that the government will ensure that tourism in the east grows after completion of the Yongphula Airport and introduction of helicopter services. Similarly, the expansion of the East-West highway would help this.
Human-wildlife conflict is the biggest challenge faced by farmers, according to the PM.
“I am happy to report that the government has started a new endowment for crop and livestock compensations,” said Lyonchhen. Guidelines are being developed and it will be announced this year.
“Most of the targets of the 11th plan have been met and 90% of the plan goals have been realized. By the end of the plan period, the government is on road to achieve, even exceed, all of the plan targets,” said Lyonchhen.
Dechen Dolkar from Thimphu