Government allocates Nu 97.63B for FY 24-25

The government has approved a revised budget of Nu 97.63 billion (B) for the fiscal year (FY) 2024-2025. The revised budget was adopted by the house after removing the allocation of approximately Nu 25 million (M) for Green Bhutan Corporation Limited from the FY 2024-2025 budget. This decision followed the recommendations of the Economics and Finance Committee (EFC) of the royal government.

The total estimated expenditure for FY 2024-2025 is about Nu 89.15B. This includes a recurrent allocation of about Nu 50.80B and a capital allocation of about Nu 38B, which constitutes 57% and 43% of the total expenditure, respectively. Of the total capital expenditure, approximately 43.1% is financed through grants, 41.6% through borrowings, and 15.3% through surplus generated from internal resources.

The total estimated budget of Nu 97.63B is divided as follows: about 52% for current expenditure, 39.3% for capital expenditure, 2.4% for lending, and 6.3% for repayment.

The estimated recurrent expenditure for FY 2024-2025 is about Nu 50.80B, an increase of about Nu 5.2B from the approved recurrent budget of FY 2023-2024. This increase is mainly attributed to the operational budget for Gyalsung, interest payments, and the reclassification of proposed capital activities of a recurring nature under recurrent expenditure. The total recurrent allocation also includes interest payments of Nu 7.1B, consisting of Nu 2.6B for internal payment and Nu 4.4B for external payment.

Recurrent expenditure will continue to be allocated as block grants under mandatory and controllable budget heads to ensure prioritization, optimal utilization of resources, and fiscal prudence.

The estimated capital expenditure for FY 2024-2025 is about Nu 38B, an increase of about Nu 9B from the approved capital budget of FY 2023-2024. Of the total capital expenditure, 43.1% is financed through grants, 41.6% through borrowings, and 15.3% through surplus generated from internal resources.

The total on-lending estimated for FY 2024-2025 is about Nu 2B, comprising Nu 774.279M for the Phuentsholing Township Development Project, Nu 920.592M for the Green and Resilient Affordable Housing Sector Project, Nu 267.3M for the Rural Finance Sector Development Project, and Nu 356.4M for the Green Power Readiness Enhancement Project.

For FY 2024-2025, the total repayment for external borrowings amounts to about Nu 6B. This repayment encompasses loans obtained by the government in previous years to finance various socio-economic development projects, including hydropower projects.

Of the total budget allocation of about Nu 97.63B for FY 2024-2025, the Social Services Sector has been allocated the highest share with about Nu 32B, corresponding to 34% of the total allocation. This is followed by the Economic and Public Services Sector, which has been allocated about Nu 26B, corresponding to about 27% of the total budget.

The budget for FY 2024-2025 aims to ensure that resources are strategically invested to achieve the key performance areas identified in the 13th Five Year Plan (FYP). The efficient utilization of these resources is intended to lay the foundation for a healthy, prosperous, and secure Bhutan.

By Sherab Dorji, Thimphu