Druk Nyamrup Tshogpa (DNT) won the 2018 elections and formed the government with the slogan of narrowing the gap. At the end of the tenure, has the gap been narrowed? What does the Prime Minister (PM) Dr. Dasho Lotay Tshering feel about it?
Replying to this question asked during the government’s last Meet the Press session on 27th October 2023, the PM said “Narrowing the Gap” is the redistribution of wealth to reduce income inequalities and that the people should look at the footprints of the DNT government to see if the gaps have been narrowed or not. According to the PM, some of the main areas, where the gaps have been narrowed are in the areas of digitalization, health care services, and property tax. However, Business Bhutan takes a look at some areas where the government initiated mechanisms that narrowed the gap directly and indirectly.
Education and Social Reforms
Education lies at the heart of any nation’s development, and the DNT government recognized this. They removed the “cut-off” point for the Class X examination, giving more than 4,000 Bhutanese children the opportunity to advance to Class XI. This decision not only expanded educational opportunities but also opened doors to brighter futures for countless young minds which have narrowed the gap according to the Prime Minister.
In an unprecedented move, the DNT government revised pay scales, narrowing the income gap. The lowest levels of public servants received the highest pay revision of 35 percent, accompanied by a monthly allowance of Nu. 3,500. Teachers, those who mold the future of the nation, were recognized as the highest-paid profession in the civil service, followed by healthcare workers. This acknowledged the crucial roles played by these sectors, directly impacting every Bhutanese family.
Economic and Financial Initiatives
The DNT government aimed to strengthen local governance by providing a 50 percent block grant for local governments, nearly tripling the size of past initiatives. This initiative granted financial autonomy to local authorities, empowering them to address community needs more effectively.
The government also initiated major tax reforms, introducing the Goods and Services Tax and removing a five percent tax on mobile phone vouchers. These reforms aimed to enhance the nation’s financial stability while facilitating economic growth. The taxation will contribute to the GDP.
Healthcare and Infrastructure Development
In the realm of healthcare, the government has taken significant strides. They commenced work on delivering incentives for breastfeeding mothers through the “Accelerating Mother and Child Health 1,000 Day Plus” project. The proposal and detailed project report for a Multidisciplinary Super Specialty Hospital were also rolled out, indicating a commitment to improving healthcare services. 11 hospitals in the country have endoscopy machines and CT scan services are available in Dewathang and Samtse hospitals.
Cardiovascular treatment centers now will be available in the country where otherwise huge chunk of the budget is spent on heart-related disease referrals.
A nationwide assessment of the cancer elimination program reflected the government’s holistic approach to public health.
Moreover, the addition of 12,800 students in 115 schools to the National Feeding Program ensured that Bhutan’s youth received adequate nourishment, with 41,706 boarding beneficiaries receiving three meals a day and 13,105 day-feeding students enjoying two meals a day.
Digitalization
His Majesty, during His Address on the 112th National Day, emphasized the need for Bhutan to capitalize on emerging technologies. In line with this, the government launched the Digital Drukyul Flagship program, which aims to use Information and Communication Technology (ICT) to transform Bhutan.
In a bid to prepare the next generation of tech-savvy professionals, the Gyalpozhing College of Information Technology (GCIT) has bben established which has set its sights to be the champion in the fields of software technology and interactive design. With a resolute commitment to academic excellence, innovation, and social responsibility, GCIT strives to shape graduates who are well-prepared for the future.
GCIT’s mission is clear: to empower the upcoming generation with the skills and knowledge needed to excel in the ever-evolving world of technology. By focusing on software technology and interactive design, the college aims to produce graduates who are not only well-versed in cutting-edge technologies but also dedicated to academic rigor and social engagement.
Meanwhile, ICT flagship took shape with coding introduced as a compulsory subject as the ICT curriculum rolled out; One computer lab for each school underway with completion of 72 and the remaining 48 at various stages; 120 new ICT labs constructed and 11,000 computers supplied to schools, including extended classrooms, bringing the student to computer ratio to 1:15; Enhancing digital connectivity across all government offices, 1,359 agencies of the target of 1,396 (97 percent), including schools and hospitals, connected with fiber optic to the government network.
Infrastructure development was also a significant focus, with 120 new ICT labs constructed and 11,000 computers supplied to schools, creating a favorable student-computer ratio of 1:15.
Hydropower
The completion of the 720MW Mangdechhu hydropower plant and the revision of power tariffs, designed to benefit highland communities and the urban poor, underscored the government’s commitment to sustainable energy. There are several other hydropower projects that are being established. Hydropower projects benefit the rural economy.
Meanwhile, other small phase one hydro power projects include the 54 MW Burgangchhu Hydropower Project with the cost Nu 3.957bn in Nangkor Gewog, Zhemgang, followed by 32 MW Yunngichhu Hydropower Project located in Maedtsho Gewog, which is about 34 km away from Mongar-Lhuentse national highway with the cost of Nu 110bn and the 18MW Suchhu in Sangbaykha gewog, Haa with the cost of Nu 2.336bn.
In the meantime, Bhutan is also developing a national hydrogen roadmap and strategy to attract investments and diversify energy resources.
Agriculture and Infrastructure Development
Intensified efforts to boost agriculture production during the pandemic showcased the government’s commitment to ensuring food security. Initiatives to promote winter vegetables and strengthen supply chains are indicative of a forward-looking approach to agriculture.
The Food Corporation of Bhutan Limited (FCBL) explored and managed to find customers for more than 50 Metric Ton (MT) of cardamom that was bought from the farmers through buy-back scheme. FCBL sold this through intermediates though it did not have much time and scope for better marketing.
The government had directed FCBL to procure the produce from farmers and explore marketing opportunities when the price for cardamom hit record low last season.
Cardamom was exported to Bangladesh through an agent, which they say has recovered the expenses incurred without much profit. The government was allocated Nu 50mn to start the buy-back scheme. As of now, FCBL has spent more than Nu 30mn to complete procuring and packaging procedures. They have deployed four teams across eight dzongkhags to buy back the cardamom from the farmers providing services as nearest as possible for them to reach their produce.
The government supported the Food Corporation of Bhutan Limited (FCBL) to purchase 50.2 metric tonnes of cardamom worth Nu 20.75 million (M) using the Nu 50M Over-Draft Facility last year.
This scheme benefited some 549 farmers from eight cardamom-growing districts, according to the department of agricultural marketing and cooperatives’ annual report 2018-2019. Cardamom was then exported or sold locally by the FCBL.
The buy-back scheme is a contingency strategy to provide support to farmers at times of market failures. The commodities are then included in the scheme and buy-back price is determined annually by a technical committee representing various stakeholders.
Auctioning of Cordyceps were done at 10 different sites, involving a total of 1,746 collectors and 35 buyers took last year. A total of 346.75kg Cordyceps worth Nu 175.945M were auctioned.
The Build Bhutan Project, aimed at creating a domestic workforce for the construction industry, and the establishment of specialized firms promoted construction as an attractive employment sector, boosting the economy.
Reforms and Initiatives for a Brighter Bhutan
The DNT government introduced and endorsed the historic Civil Service Reform Bill, aiming to restructure the civil service for greater accountability, productivity, and coordination among agencies. The clean wage system eliminated hidden benefits and fostered performance-based incentives.
Property Tax
Bhutan has undergone tremendous progress, including transition in the form of governance. However, one important component which has not changed since 1992 is the Property Tax, with taxes levied on buildings, houses and land, still following the Taxation Policy of 1992. While house rents in urban areas continue to increase, a building owner in Thimphu who has a building with ten units, pays just Nu 1,000 as building tax in a year. And even if the lowest margin of Nu 10,000 per month is taken as house rent, the owner earns Nu 100,000 a month, which is Nu. 1,200,000 per year. Moreover, land tax per square foot in Thimphu is just 50 chetrum for commercial areas and 25 chetrum for residential areas, while current land prices in the capital have crossed Nu 1,200,000 and more for a decimal (435.6 sq.ft). What would have been relevant in 1992 is obsolete now, and if the government is serious to narrow the gap and increase funds for local governments, one of the necessities is to increase Property Tax.
The DNT government introduced the Property Tax Bill which became the Property Act Tax of Bhutan 2022. The value-based taxation policy was passed by the Parliament during the 8th Session of the Third Parliament.
Sangay Rabten from Thimphu
