Government estimates more than Nu 16 Million in external grants for FY 2024-25

During the first session of the Fourth Parliament on 13 June, Finance Minister Leki Dorji reported that for the Fiscal Year 2024-25, the government estimated external grants totaling Nu 16,521.623 million (mn).

These grants consist of project-tied and program grants from various development partners. The largest portion of the external grants is from the Government of India (GoI), comprising Project-tied Assistance and Small Development Projects (SDP), followed by contributions from the Asian Development Bank (ADB), European Union (EU), World Bank, and others.

The external grants have been revised upwards by Nu 1,296.804 million due to the inclusion of externally funded projects and activities committed and signed with development partners during the fiscal year.

As of 30th April 2024, a summary of external grants incorporation for the fiscal year 2024-25 indicated significant support received by the Royal Government of Bhutan from various agencies and organizations, totaling Nu 1,664.321 mn. The largest contributor was the Government of India (GOI) with Nu 795.525 mn, followed by the Green Climate Fund (GCF) with Nu 283.545 mn and the United Nations Development Program (UNDP) with Nu 107.698 mn. Additionally, the Government of Austria (GoA) contributed Nu 72.529 mn.

Despite this generous support, a rationalization deduction of Nu 367.517 mn was applied, resulting in a net total of Nu 1,296.804 mn. These grants signify a collaborative effort between Bhutan and international partners to address various developmental and environmental challenges within the country.

Meanwhile, the governmentโ€™s internal resources have been revised upwards, with domestic revenue increasing from Nu 46,245.776 mn to Nu 52,132.561 mn, primarily due to higher profit transfers from the Royal Monetary Authority (RMA) and improved tax revenue.

Additionally, other receipts have been revised to Nu 1,536.317 million, marking a 70.7% increase from April 30, 2024, driven by the inclusion of funds from the Universal Service Fund, Bhutan Health Trust Fund, Bhutan Trust Fund for Environmental Conservation, and the channeling of CD accounts funds through the budgetary process.

The revised fiscal deficit stands at 5.6 percent of GDP, attributable to additional receipts from the RMA.

In FY 2022-23, grants received amounted to Nu 14,363.319 million.

The total budget has been revised upwards by Nu 1,516.584 mn, primarily due to a 0.4% increase in current expenditure, incorporating CD account funds totaling Nu 160.197 mn, and a 4.6% rise in capital expenditure due to the inclusion of project-tied loans and grants amounting to Nu 1,356.387 mn.

The original budget for FY 2022-23 was Nu 74,807.887 million, with estimated resources of Nu 51,925.754 million, resulting in a projected fiscal deficit of Nu 22,882.133 million, to be financed by domestic borrowings of Nu 20,356.410 million. The budget was later revised to Nu 79,360.850 million, with resources increasing to Nu 60,935.132 million, resulting in a revised fiscal deficit of Nu 18,425.718 million and domestic borrowing of Nu 15,803.236 million.

Total resources for FY 2023-24 increased by 14.6 percent, with corresponding expenditure rising by 2 percent from the approved budget.

By Sangay Rabten, Thimphu