The economy took a battering in the past two years because of the pandemic and needs urgent redemption
SONAM PENJOR | Thimphu
The government will undertake targeted strategic interventions to accelerate the economic recovery process and develop it to ensure macro-economic stability to foster a secure and sustainable economic path.
According to the national budget report for Financial Year (FY) 2022-23, the economy took a battering in the past two years because of the pandemic and needs urgent redemption.
“To achieve these targets, investments in human capital development will be critical. Thus, this year’s budget focuses primarily on investing and developing the existing human capital base,” the report states.
The plans envision scaling up the development of critical infrastructures in the country, such as roads, energy, water, and technology. These measures are expected to not only achieve short-term economic gains but also to set a strong and robust economic base for the future.
Further, these measures are expected to enhance investments in key economic sectors by leveraging agricultural productivity, facilitating the growth of CSIs, creating an enabling environment for the growth of manufacturing industries, and opening the tourism sector. It will also help expand the existing work geared towards improving access to quality social services in health and education.
The report states that total resource is estimated at Nu 51.925 billion, of which domestic revenue is estimated at Nu 36.368 billion for FY 2022-23. Within the domestic revenue, tax revenue constitutes 70 percent and non-tax revenue constitutes 30 percent.
The tax revenue during FY 2022-23 is expected to grow by 10 percent as compared to FY 2021-22 while total expenditure for FY 2022-23 is estimated at Nu 74.807 B, which constitutes 37 percent of Gross Domestic Product (GDP).
From the total expenditure, the report states that Nu 36.34 B is allocated for recurrent expenditure and Nu 38.466 B for capital expenditure.
Finance Minister, Namgay Tshering while presenting the Annual Budget for FY 2022-23in the National Assembly on 6 June said the recurrent budget will be met from available domestic revenue at all times, and a controllable recurrent budget is provided as an annual block grant to agencies.
Lyonpo also said that agencies should ensure strategic capital investment in order to realize the desired outcome and the FY 2022-23 budget will ensure the optimum use of available domestic resources whilst ensuring non-essential imports are minimized.
“The local government must align their local priorities the with overall national priorities, which includewater, road, agriculture, health, and education to ensure better harmonization of priorities; and the budget FY 2022-23 is made more people-centric, while at the same time inculcating the sense of ‘fundamental duty to the state’ as a citizen of this country,” the finance minister said.
In view of the revenue mobilization challenges and significant expenditure demands, Lyonpo said that spending in the FY 2022-23 will focus on critical areas with the highest impact on the well-being of the Bhutanese people and in support of the economic recovery process.
Lyonpo further said that this year’s budget will continue to adopt an expansionary fiscal policy with initiatives mainly focusing on the theme; of “accelerating economic recovery through strategic investments in the areas of food self-sufficiency, human capital development, sustainable infrastructure development, and improved social security.”
Meanwhile, the fiscal deficit for the FY 2022-23 is estimated at Nu 22.882 billion, which is 11.25 percent of the GDP.
With net lending of Nu 2.795 B, the net financing requirement amounts to Nu 20.086B, which will be financed through net external borrowings of Nu 270 million and net internal borrowings of Nu 20.356 B.
Finally, the total public debt stock is estimated at Nu 268.708 B for FY 2022-23, which is 132.1 percent of GDP.