Local government gets 100% capital funding

The capital grant allocation to the local governments in the 12th Five Year Plan (FYP) has increased by 100% to Nu 50bn from Nu 25bn in the 11th plan. This is to meet the increasing demand of public services from local governments.

The capital grant of Nu 20bn is allocated to 20 dzongkhags and Nu 19bn is allocated for 205 gewogs while Nu 10bn has been allocated to four thromde ‘A’s.

The resources in the LGs (dzongkhags, gewogs and Thromde ‘A’s) have been allocated according to the resource allocation formula (RAF). The RAF ensures equitable distribution of resources among LGs.

RAF was introduced in the 10th FYP and continued in the 11th plan. The RAF for budget allocation to dzongkhags, gewogs and the four thromdes was based on criteria such as population, geographical area, poverty and transport cost index.

However, based on government priority, the RAF has been revised. The 12th FYP additionally included thromde ‘A’s to use RAF for budget allocation. The revised formula takes into consideration the specific needs and priorities of different levels of LGs.

The 12th FYP report states that priority for gewogs are specified as agriculture and livestock, access to health and education, water and hygiene and household income.

Developing local economy and job creation, quality health and education, and waste and culture are the main focus of the dzongkhag. To enhance local economy and job creation, more resources are allocated to dzongkhags with lesser CSIs, more unemployed people and more people employed in agriculture.

To improve quality of education, higher resources have been allocated to dzongkhags with lower student performance in BCSE.

Thromde ‘A’s focus is on urban facilities, safety, water, sanitation, pollution, quality of education and congestion. More resources are allocated to thromde ‘A’ with higher number of resident population and lower population density.

The report states that the formulation of 12th FYP takes into consideration the present socio economic challenges and the principal priority of ensuring “the future independence, sovereignty and security of our nation-state.”

Phub Dem from Thimphu