Dissecting the National Budget 2024-25

New Budget Outlay Prioritizes Balanced Growth, Social Programs, and Environmental Stewardship

PEMA TSHOMO
Thimphu

In an audacious move that prioritizes both economic well-being and citizen happiness, Bhutan has unveiled its national budget for the fiscal year 2024-25.

The Nu. 89,154.218 million, of around USD 1.1 billion budget, strategically allocates resources across key sectors like healthcare, education, and agriculture, while also addressing social welfare programs and infrastructure development.

Recognizing the need for responsible fiscal management, the government remains mindful of public debt, prioritizing concessional loans and fostering the domestic capital market to ensure sustainable financial footing.

This approach aligns with the nation’s adherence to the Medium-Term Fiscal Framework (MTFF), which emphasizes mobilizing resources and managing expenditures for stable economic growth.

Healthcare takes center stage, with a significant portion of the budget dedicated to achieving Universal Health Coverage (UHC) through the Healthy Drukyul Program.

This program aims to improve access to essential medical equipment, reduce ambulance response times, and expand health service coverage nationwide. This focus on UHC ensures that quality healthcare becomes a basic right, not a privilege, for all Bhutanese citizens.

Education is another top priority. The budget allocates resources to boost Early Childhood Care and Development (ECCD) enrollment, aiming to reach 51 percent by 2024-25 from 38.7 percent in 2022.

This investment in early childhood education lays a strong foundation for future learning and cognitive development. Additionally, initiatives to enhance teacher training and modernize the school curriculum with international standards equip students with the skills and knowledge necessary to thrive in a globalized world.

Further recognizing agriculture’s vital role in Bhutan’s economy and food security, the budget allocates funds to support both subsistence and large-scale commercial farming. Specific goals include achieving rice self-sufficiency and increasing production of high-value crops like fruits, nuts, potatoes, and chilies.

This not only bolsters domestic food security but also positions Bhutan as a potential exporter of agricultural products, generating additional revenue for the nation. The budget also promotes sustainable agricultural practices, ensuring long-term productivity without compromising environmental integrity.

Where, infrastructure development receives a major boost, with a focus on upgrading national highways, Dzongkhag roads, and bypass roads. Improved connectivity facilitates the movement of goods and people, fostering economic growth across all regions.

Recognizing the environmental imperative, the budget prioritizes green transport options, minimizing the environmental footprint of infrastructure projects.

Additionally, airport infrastructure upgrades are planned, aiming to meet international safety standards and facilitate air travel, further enhancing Bhutan’s global connection.

To preserve the heritage and embrace technology, Bhutan’s rich cultural heritage finds its place in the budget as well. Resources are dedicated to restoring and preserving culturally significant structures and sites.

The budget acknowledges the transformative power of technology. The Communication and Technology sector receives a significant allocation, supporting ongoing projects like the Bhutan Integrated Taxation System (BITS), Electronic Patient Information System (EPIS), and National Digital Identity (NDI).

Expanding rural internet connectivity reflects the government’s commitment to bridging the digital divide. This improved access to technology is expected to empower citizens, enhance communication, and foster innovation across various sectors.

Beyond healthcare and education, the budget prioritizes social welfare programs, focusing on improving the lives of all Bhutanese citizens. Initiatives include developing a land lease information system and Geographic Information System (GIS) to streamline bureaucratic processes.

Additionally, investments in hydromet networks and forecasting services aim to enhance preparedness for natural disasters, mitigating potential risks and safeguarding lives and livelihoods.

The rollout of the Goods and Services Tax (GST) is another noteworthy initiative. This reform aims to create a fairer and more efficient tax system, potentially generating additional revenue for the government to invest in social programs and infrastructure development.

Furthermore, a substantial allocation for critical Human Resource Development (HRD) within the public sector signifies the government’s commitment to cultivating a highly skilled and motivated workforce capable of delivering exceptional public services.

Local governments (Dzongkhags, Gewogs, and Thromdes) will receive a substantial share of the budget, Nu.29,714.7 million. This decentralized approach will empower local communities to address their specific needs and priorities.

Women’s empowerment also receives focus through microfinance initiatives that will enable them to become entrepreneurs and contribute to the economy.

Additionally, the budget allocates resources for maternal healthcare services and early childhood education programs, ensuring a strong foundation for future generations.

Rural communities stand to benefit significantly from the decentralized approach. The substantial allocation to local governments empowers them to address rural infrastructure gaps, improve access to social services, and create income-generating opportunities at the local level.

A significant portion is dedicated to renewable energy projects, with a focus on exploring solar and wind power in addition to hydropower. This diversification of the energy mix is expected to ensure long-term energy security and minimize dependence on a single source. 

The budget recognizes the crucial role of the private sector in driving economic growth. Tax incentives and streamlined business registration processes are designed to attract private investment in key sectors like agriculture and tourism.

Additionally, the government plans to develop Special Economic Zones (SEZs) to create an attractive environment for foreign direct investment. Public-private partnerships (PPPs) are also encouraged, leveraging private sector expertise and resources to achieve ambitious infrastructure development goals.

By investing in education, healthcare, and infrastructure, the budget aims to create a skilled and healthy workforce capable of driving economic growth in the coming decades. The focus on sustainable development ensures that this growth happens in harmony with the environment, preserving Bhutan’s unique natural heritage for future generations.

The budget also recognizes the crucial role of the private sector in driving economic growth.  Tax incentives and streamlined business registration processes are designed to attract private investment in key sectors like agriculture and tourism.

Additionally, the government plans to develop Special Economic Zones (SEZs) to create an attractive environment for foreign direct investment. Public-private partnerships (PPPs) are also encouraged, leveraging private sector expertise and resources to achieve ambitious infrastructure development goals.

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