Indian support sought for the Economic Stimulus Fund

Indian support sought for the Economic Stimulus Fund

One of the main pledges of the Peoples Democratic Party (PDP) was the mobilization of the Nu 15 billion economic stimulus plan, which the party had said was ready to be injected as a means to resolve Bhutan’s macroeconomic issues. Speaking to the Bhutanese mainstream media during the new government’s first Meet the Press, Prime Minister (PM) Tshering Tobgay said that the task force behind the stimulus plan has already begun to work and that the findings have been presented to the Cabinet, which would be discussed in a later date. The media was also informed that the government will be seeking support from the Indian government.

Speaking more about the plan, the PM said that the Indian government has already extended an invitation to the Prime Minister for a visit to India.  It was also informed that a substantial portion of the stimulus fund will be allocated to support the revival and growth of the private sector. These funds will be utilized for various initiatives aimed at empowering and rejuvenating private businesses.

The PM added that the fund will be injected as liquidity in financial institutions. This is to provide loan deferment and introduce special loan schemes tailored for businesses that are yet to fully rebound from the adverse impacts COVID-19 pandemic, in addition to maintaining the foreign reserve.

As per the Party’s pledge, the government will establish and execute programs initiated by the Economic Development Board (EDB) and establish downstream industries essential for supplying goods and services to hydropower development and the 13th plan projects.

The fund will be also allocated to accelerate the establishment and up-scaling of start-ups and Cottage and Small Industries (CSIs). The fund is to promote and support export businesses and import-substitution enterprises, domestic manufacturing enterprises.

The PM noted that through the allocation of the fund, support would be received by women and youth entrepreneurs, farmers, CSIs, film and entertainment industry, construction sector, IT and tourism sector, hotels and restaurants, and the public transport sector.

The fund will also be used for Desuup Skilling Programmes and employment generation.

However, the government is not sure if the amount will be procured lumpsum or in different phases. The Prime Minister said that the country would want to get the fund all at once.

Meanwhile, in a continuation of the longstanding tradition of diplomatic engagements between Bhutan and India, Foreign Secretary Pema Choden of Bhutan is currently on an official visit to New Delhi. The visit, spanning from February 29 to March 2, 2024, comes in response to an invitation extended by Vinay Mohan Kwatra, the Indian Foreign Secretary.

Accompanied by senior officials from key departments including the Prime Minister’s Office, Ministry of Finance, and Ministry of Foreign Affairs and External Trade, Foreign Secretary Pema Choden is set to engage in discussions with her Indian counterpart and other government officials. The agenda of the discussions encompasses various issues of mutual interest between the two nations.

A pivotal event during this visit is the co-chairing of the Second Bhutan-India Development Cooperation Talks of the 13th Five Year Plan. This session, scheduled for March 1, 2024, will be jointly led by Foreign Secretary Pema Choden and her Indian counterpart, Vinay Kwatra.

The talks aim to further strengthen the developmental ties and cooperation between Bhutan and India. This visit underscores the commitment of both nations to regular and high-level interactions, solidifying the enduring diplomatic relationship shared between Bhutan and India.

By Sangay Rabten, Thimphu