RAA’s review of development activities in Bhutan
A recent review by the Auditor General’s Advisory Series has highlighted significant disparities in the allocation and use of Gewog Development Grants across Bhutan’s 20 Dzongkhags, raising concerns about prioritization and effective planning in developmental activities. While some key result areas received substantial funding, others have been starkly under-resourced, leading to inadequate progress in crucial sectors such as education, health, and livestock development. These findings were reported in the Auditor General’s Advisory Series on the Review of Local Government Development Grants, March 2025.
Inadequate Planning and Oversight
The review revealed lapses in the allocation and utilization of Gewog Development Grants over the past three financial years (2021-2024). Budget documents indicate inconsistencies in spending patterns, highlighting a lack of proper planning and oversight. The Annual Grant Guideline mandates the prioritization of projects with significant economic or social returns while limiting expenditures on cultural and religious heritage to no more than 10%. However, these guidelines have not been followed, as evidenced by the analysis of governmental expenditures.
Farm road development emerged as the most prioritized area, commanding the lion’s share of financial resources, totaling Nu 2,880.149 million. This was followed by expenditures on Lhakhang development activities (Nu 834.03 million) and agricultural support (Nu 634.895 million). In contrast, health initiatives (Nu 589.329 million) and education (Nu 482.924 million) lagged significantly behind, and investment in livestock support was minimal, totaling only Nu 220.367 million.
Interestingly, farm road development dominated expenditures in nearly all Dzongkhags, except for Haa and Gasa, where Lhakhang development took precedence. The lack of alignment with the intended definitions of farm road projects raises concerns about the appropriateness of these expenditures. For instance, projects such as the road connecting Pangringku to TherichuGoenpa failed to adhere to guidelines meant to connect agricultural land or human settlements.
Declining Investment in Critical Sectors
A worrying trend was observed regarding livestock development, with budget allocations decreasing significantly from Nu 101.77 million in 2021-2022 to just Nu 30.03 million in 2023-2024. This represents a troubling shift away from livestock activities, which hold considerable economic promise for the region.
Moreover, education and health initiatives have consistently received insufficient funding. In Shumar Gewog, Pemagatshel, legacy infrastructure from the 1980s highlights the issue of underfunding, with only Nu 2.4 million allocated for education—just 4% of the total budget. Equally concerning is the fact that, over the past three years, funding for health development has remained alarmingly low, with only Nu 0.199 million allocated in 2022-2023 for the basic health unit in Merak Gewog, Trashigang.
Recommendations
The findings of the review clearly indicate a critical misallocation of resources, with health, education, and livestock development relegated to the bottom of the priority list. Livestock accounted for just 3% of total expenditures, education represented 7%, and health received only 8% over the three financial years. This misalignment in prioritization poses serious challenges for the overall development of the Gewogs, potentially stunting economic growth and hindering social advancement.
To address these disparities, urgent measures must be taken to ensure that funding is allocated based on comprehensive needs assessments. A reevaluation of goal-setting processes and an emphasis on strategic planning could help ensure that future budgets reflect adherence to guidelines and prioritize essential sectors that directly impact the welfare of the population.
As discussions around allocation strategies continue, the need for a more balanced and equitable approach to development funding in Bhutan becomes increasingly critical for fostering sustainable growth and improving the quality of life for all citizens.
The Auditor General’s Advisory Series findings serve as a crucial reminder of the importance of effective resource management in achieving the nation’s developmental goals.
Sangay Rabten from Thimphu
