Nu 29B allocated for LGs in FY 2024-2025

Nu 29B allocated for LGs in FY 2024-2025

The government has allocated Nu 29 billion (B) to Local Governments (LGs) and Thromdes for the Fiscal Year (FY) 2024-2025, according to Sherab Dorji from Bhutan.

Of the total budget outlay of Nu 29.7B, Nu 14B is designated as the current block grant for LGs to cover mandatory and controllable expenses. Additionally, Nu 168.895 million (M) is allocated for routine maintenance of Dzongkhag Roads (GC roads) under the Department of Surface Transport’s centrally executed activities.

Furthermore, Nu 3,833.761M is allocated as the Royal Government of Bhutan (RGoB’s) capital block grant, aimed at achieving the seven key deliverables outlined for LGs in the 13th Five Year Plan (FYP).

This approach of allocating capital block grants aims to enhance LGs’ autonomy and flexibility in prioritizing and addressing grassroots-level needs. However, implementation will strictly adhere to revised annual grant guidelines issued by the Ministry of Finance (MoF).

Moreover, the allocation of block grants for FY 2025-2026 will depend on the performance of FY 2024-2025 budgets, with criteria to be announced and sensitized during the fiscal year.

Additionally, Nu 3B under Project-Tied External includes Nu 1.5B earmarked for Government of India (GoI) Small Development Projects (SDP). These funds are intended to empower LGs to initiate impactful projects such as Chiwog roads, irrigation systems, drinking water supply, waste management, sanitation facilities, bridges, tourism development, land management, flood protection, and chain link fencing.

Similarly, lump sum budgets of Nu 11.25M per Dzongkhag, Nu 5.122M per Gewog, and Nu 56.25M per Thromde have been allocated, pending approval of projects and activities by the government during FY 2024-2025.

Based on designated focus areas, LGs will formulate projects and activities within funding limits ranging from Nu 5M to Nu 50M per activity.

Furthermore, Nu 637.500M under Dzongkhags is allocated for chain link fencing for Chiwogs (GoI/PTA), with an additional Nu 1.5B allocated for Dzongkhags and Thromdes based on approved Annual Workplans and Budgets (AWPB) for respective donor-funded projects.

The overall LG allocation also includes Nu 7.68B allocated to central agencies for major initiatives planned for LGs. This allocation mechanism aims to ensure timely implementation of significant programs to benefit LGs expeditiously.

Finally, the total LG budget allocation corresponds to 35.6% of total expenditure, excluding General Reserve (GR) provision, with capital allocation constituting about 44% of the total capital allocation.’

By Sherab Dorji, Thimphu