PM says Bhutan should thank India for 13th FYP support

PM says Bhutan should thank India for 13th FYP support

Replying to questions from the media during the new government’s second Meet the Press on March 29, 2023, Prime Minister (PM) Dasho Tshering Tobgay said that Bhutan should be happy about the government of India’s (GoIs) support for the 13th Five Year Plan (FYP). During the Indian Prime Minister, Shri Narendra Modi’s visit earlier, he pledged Nu 100 billion (B) as Indian support for the 13th FYP.

PM Dasho Tshering Tobgay said that the GoI provided Nu 45 B for the 12th FYP and added that what is being right now is double the amount provided in the last FYP. The PM also explained that during discussions with government bureaucrats their expectations were about Nu 70 B only. Additionally, the GoI had not committed anything prior to the PM’s visit to India on March 14th, 2024. The PM explained that he had to discuss the plan and request for the support.

Further, the PM explained that from the Nu 100B, Nu 15B is for the stimulus plan. However, he asked the media not to confuse people on this subject. In order words, GoI support for the 13th FYP is Nu 85 B and Nu 15 B is for the stimulus plan. When the Indian PM declared the Nu 100 B support, he had not categorically mentioned about the division and portion provided for the stimulus plan. However, the Indian Foreign Secretary Vinay Mohan Kwatra, during a press brief with the media during PM Modi’s visit had clarified that the 15 B stimulus plan is part of the Nu 100 B support from the GoI.

The PM also spoke about the need to use the money that has been given judiciously and effectively. Referring to Indian support, the PM said the GoI is providing Bhutan almost half of Bhutan’s GDP as support. Bhutan’s GDP is only Nu 220 B and the Indian support (in total) is Nu 100 B.

The media was also informed that the Nu 15 B will be received by the government earlier than the other portions of GoI support.

Meanwhile, the PM while not revealing the source said that an additional Nu 50 B would be given to the government of Bhutan for the 13th FYP. He also added that the GoI would be expending support in several areas like the GyalSung Program, the Gelephu Mindfulness City (GMC) and others, which will be out of the gamut of the 13th FYP.

For instance, the GoI on January 21nd, 2024, announced a concessional loan of 15 billion INR to support the Royal Government of Bhutan in the development of infrastructure for the GyalSung Project. The memorandum of understanding was signed by Dasho Chhewang Rinzin, interim advisor of the Ministry of Foreign Affairs and External Trade, and Ambassador of India to Bhutan, Sudhakar Dalela, during a ceremony held in Thimphu on January 21st, 2024.

The financial support of 15 billion INR is designated for the advancement of infrastructure associated with the GyalSung project. “The financing arrangement will be in addition to the Government of India’s plan assistance to the Royal Government of Bhutan,” stated the press release. The press release stated that it will build on the earlier collaboration between the Government of India and GyalSung.

Bhutan received the second tranche of Nu 5bn from the Government of India for the GyalSung Project on March 26, 2024. The Indian Ambassador to Bhutan, Sudhakar Dalela handed over the amount to the Foreign Affairs and External Trade Minister, D.N. Dhungyel.

Under the MoU for the GyalSung Infrastructure Project, the Government of India has disbursed a total of Nu 10bn so far. The first tranche of Nu 5bn was released in January of this year. The MoU outlines Nu 15bn in concessionary loans for the development of infrastructure for GyalSung academies. This is in addition to India’s plan assistance to Bhutan.

The Government of India had extended a grant assistance of 2 billion INR for the DeSuung for GyalSung programme in February, 2023.

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 last month, Dasho 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.

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 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 DeSuung Skilling Programmes and employment generation.

By Sangay Rabten, Thimphu