The highest transfer of the general reserve during the second quarter was made for the acquisition of properties
During the fiscal year (FY) 2022-2023, Nu 8.05bn was provisioned under the general reserve in meeting unforeseen expenditures, which are transferred to different agencies upon fulfillment of the established criteria.
As of December 31, 2022, about Nu 1.87bn of the general reserve has been transferred to agencies for different activities. Of this, about Nu 0.507bn was transferred as the current general reserve budget and about Nu 1.3bn as the capital general reserve budget.
According to the Budget Performance Report, FY 2022-2023, the general reserve is mainly kept for activities such as new appointments establishment, hospitality, and entertainment, retirement benefits, third country travel, national events, helicopter services, ad-hoc works, acquisition of properties, rehabilitation program, GSB Phase II second priority, chain link fencing, disaster contingency, covid-19 response, national council election, bye-election, retirement benefits of local government members, transformation initiative, amongst others.
Out of 17 activities, the highest transfer of the general reserve during the second quarter was made for the acquisition of properties followed by the transformation initiative amounting to 27% and 25 % respectively of the total transferred from the general reserve.
However, the general reserve was revised to Nu 6.17bn, which, the current budget stood at about Nu 1.7bn and the capital budget of about Nu 4.4bn as of 31st December 2022.
According to the Department of Planning, Budget and Performance (DPBP), the least transfer of general reserve was about Nu 0.54mn for activities required in bye-elections. No transfer of general reserve was made for activities such as rehabilitation programs and retirement benefits of local government members.
Meanwhile, the government continued to provide support for the covid-19 containment measures and post covid-19 measures.
In the second quarter of the FY 2022-2023, a total budget of about Nu 30.77mn was provided to various budgetary agencies for covid-19 related activities by transferring from the budget provisions kept under the general reserve, according to the ministry of finance.
The budget allocation for covid-19 during the 2nd quarter decreased by 49% compared to the 1st quarter of FY. The reduction in the budget is attributed due to the reopening of borders on 23rdSeptember 2022 and the lifting of mandatory quarantine for inbound travelers.
Meanwhile, the total external borrowing has increased to about Nu 5.75bn from the initial estimate of about Nu 5.47bn. According to the Ministry of Finance, the increase is mainly due to the receipt of Nu 3.07bn under the program borrowing from the Asian Development Bank (ADB) during the quarter against the initial estimate of Nu 2.80bn because of fluctuations in the foreign exchange rate and an increase of project tied borrowing amounting to about Nu 13.517mn.
Similarly, in the domestic borrowings, the opening balance of T-bills stood at Nu 15bn at the beginning of the FY2022-2023, which, during the period the royal government issued T-bills worth Nu 5bn for cash management, and the same has been redeemed leaving outstanding T-Bill balance of Nu 15bn.
Meanwhile, the overall resources have increased by 7% due to the incorporation of external grant support of Nu 3.25bn. However, the ministry stated that the overall fiscal balance has increased by about Nu 13.51mn due to the incorporation of loan-funded activities.
Sherab Dorji from Thimphu
