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FINANCIAL YEAR 2012-13

NATIONAL BUDGET

MINISTRY OF FINANCE JUNE 2012

..........13 2......................... ....13 2.......... ......................... .4 1..............................2....1 Gross Domestic Product (GDP)................8........2 Actual Budget Outcome.... ...........................7 1........ ...........................4 1.....................................10 2..............................2 Employment...................10 2.......2........................................................2 Domestic Revenue.............................Table of Contents INTRODUCTION...............................................................13 2............8............... ................................................................................................... .........15 CHAPTER III: REVISED BUDGET ESTIMATES OF FY 2011-12........6 1...............7 Prices .......................................................................................9 1..................4 Debt................4 Foreign Exchange Reserves................................. .................... .....12 2..6 Exchange Rate........18 3............11 2...18 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 i ................................1 Expenditure estimate......................................................10 2...3 Balance of Payments (BoP)..........13 2................................1 Expenditure.............8 Banking and the Financial Sector:.............................. ........1......................... ........................2......9 CHAPTER II: PAST MACROECONOMIC DEVELOPMENTS...8 1........................3 Foreign Exchange Implications on Account of Government Budgetary Operations..........2 Non-performing Loans (NPLs).....................................................3 Grants....1 Credit.............6 1......................1 CHAPTER I: OPERATIONAL RESULTS OF THE BUDGET FOR THE FINANCIAL YEAR 2010-11.......................................... 16 3.........................1 Current expenditure.5 Debt & Debt Service................................... .......................................................1 Overall financial position.......2..........................10 2..................................

...5 3....................34 4...30 4........2 3...............................................18 Domestic revenue estimate.3 Financing ................................3 Renewable Natural Resources (RNR) sector...... industry and private sector development......................47 4....... .......................................50 4..................................................................25 Fiscal deficit & resource gap......................................................................... ................7 3.......................1...............31 4..........................................................................................................................2..................2 Expenditure outlay.......3 Net lending.............4......23 External grants.......1 Current expenditure....48 4...................2 Capital expenditure.1.........6 3....................................4 Sector Allocation.....4......................................4 Vocational training and employment.....44 4...........3.............................................................25 Borrowings......................26 Foreign Exchange Implications on Account of Government Budgetary Operations..................................2 Education.......................1 External borrowing........37 4..32 4...............................34 4...............29 4...35 4..................4...27 4.....................................................1 Resources.........35 4.26 CHAPTER IV: BUDGET ESTIMATES FOR THE FY 2012-13............................3.........................................1..............................54 ii NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 ..............................................................................35 4.....8 Trade................. ...............................................3................1 Health........................................................ ..31 4.......2 Grants.25 Debt and debt servicing.................................4.........4 3...2 Internal borrowing.............................2 Capital expenditure.....4....................34 4.................................................................. housing and public amenities.........4................................1 Domestic revenue..................................3 3...2....................7 Communications and transport..4....5 Roads.......34 4............................4...............3.....52 4..40 4................ ......................................................................3 Debt principal repayments......6 Urban development.......2.................

....................................................68 CHAPTER V: TAX MEASURES.........................65 4.64 4.......2 Inflation .....4............4....... Judiciary and Constitutional bodies.. .......67 4...............................................6 Balance of Payments (BoP) and Foreign Exchange Reserves.............................67 Foreign Currency Implications on Account of Government Budgetary Operations....................................................80 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 iii ...................64 4.....................7 Royal Civil Service Commission.......69 CHAPTER VI: MACRO-ECONOMIC OUTLOOK IN THE MEDIUM TERM.....................................4........................................5....77 6......5.........4 Election Commission (EC)......1 Economic Growth.........................55 4..77 6......................... ................65 4..........5 Debt Stock and Debt Service........................................................................10 Energy...3 Anti-Corruption Commission.................................................................2 National Council (NC)..........................66 4............59 4........... .76 6....................................................4........................... ......................70 6...........5................. .....5.................3 Fiscal Balance...................6 4.............1 National Assembly (NA)...........................5 Judiciary.......................................4.......5 4....72 6...................75 6..................................................................................................11 Cultural services.......9 Tourism sector.....................................2 Expenditure...................................3 Employment.....4...........64 4..................4 Fiscal Outlook..................................................5...........61 Budget for Legislative...........70 6...................56 4.........4.................1 Domestic Revenue and External Grant Assistance..........13 General public service........................................................4..73 6.....60 4.......6 Royal Audit Authority (RAA)..................5........................12 Law and order.................................73 6..4..... ........................................................5..

.....................4 Universal Service Fund for ICT...............................................................................2 Bhutan Health Trust Fund (BHTF).......................................................2... ...........................2.....2...............1 Earnings & Profitability......... ........97 9...... ....................................83 7..............................1 Trust Funds. (BTFEC).................4 Subsidy and Grants.................97 9................................................84 7...............95 CHAPTER IX: REPORT ON TRUST FUNDS...........................1...3.... ..............................83 7............2....................1 Government Portfolio in the SOEs and Linked Companies......3 Government’s revenue from SOEs................1 DHI’s Assets and Equity.............1......................................................................1.... ..........3 Cultural Trust Fund...97 CONCLUSION ..............................CHAPTER VII: REPORT ON STATE-OWNED ENTERPRISES AND COMPANIES WITH GOVERNMENT SHAREHOLDINGS........93 8..93 8............................1........... ..97 9.........................83 7.........97 9................90 7.........1 National Pension and Provident Fund (NPPF)...........................91 7.....2 Assets & net worth........................99 ANNEXURES ..........92 7................2 Investments.............................................3 Report on financial and operational performance of Druk Holdings & Investments.......88 7..................2 Royal Monetary Authority (RMA)........................................92 CHAPTER VIII: REPORT ON THE NATIONAL PENSION AND PROVIDENT FUND AND THE ROYAL MONETARY AUTHORITY..........100 iv NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 ......................................3..................90 7...............97 9.......2 Financial Overview of SOEs and Linked Enterprises.......1 Bhutan Trust Fund for Environmental Conservation ....................................

and thus there are bright prospects of the rural poverty levels being reduced. in spite of heavy investments in the past. With regard to the Rupee shortage problem. keeping in mind the shortage of Indian Rupees the economy has been facing. electricity and communication. I offer my sincere felicitations to the Honorable Members of Parliament for their exemplary stewardship in guiding the state of affairs of our country. It is appropriate too now that our rural areas have almost all been provided with the basic infrastructure of roads. As we mark the beginning of the final year. Rural incomes are set to rise. For one. I wish to submit that this problem has also offered us opportunities in developing our domestic industries especially in the agricultural sector. they have been even better. In that sector. I submit that our budgets have always been prepared fully keeping in mind the resources available and keeping the fiscal deficits within reasonable limits. As I present our last budget. This budget too has been prepared along those sound principles. It coincides with the final year of the first democratically-elected government in our country. Today with the difficulty in imports. In terms of actual results. we could never really encourage our farmers to increase their output as products could be simply imported. and that has many benefits. our farmers are encouraged to produce more. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 1 . rural livelihood is set to become more attractive and the rural-urban migration trend now seeing the possibility of slowing down.INTRODUCTION The Royal Government’s budget for the financial year (FY) 2012-13 is the last budget of the 10th FYP. a separate report has been circulated. We have taken more care to ensure that the deficits are in fact even lower than in the past.

9 on the Richter scale destroyed homes. an earthquake measuring 6. and public infrastructure alike. I would like to dedicate this budget in prayers for peace. Last October. devastating the lives of many. religious monuments. Haa. Past Macroeconomic Development. and Samtse began rebuilding their lives confidently. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . the United Nations. So while the outlook for the global economy is improving. As testament to His Majesty’s enlightened leadership. continues a steady growth although slow. Honourable Lyonchhen Jigmi Y. The United States’ economy on the other hand. Notwithstanding the adverse state of the world economy. the economic environment remains fragile. It was again with the compassionate leadership of His Majesty the King that the people in the affected areas of Paro. Against this background. I also take this opportunity to pay tribute to His Majesty the Fourth King as the father of our guiding philosophy of Gross National Happiness. upon the proposal of our Prime Minister. happiness and long life to Their Majesties. growth in Asian economies are doing moderately well. the various aspects of the Government’s Budget Report for FY 2012-13 will be presented in the following order: Chapter I: Chapter II: 2 Operational Results of the Budget for the Financial Year 2010-11.This past year has not been the best of years. unanimously adopted “Resolution 65/309” placing ‘Happiness’ as a new global development paradigm in July 2011. The IMF remains cautiously optimistic of the future as there were risks which could affect both advanced and emerging economies. Thinley. Closer to home. the European economy continues to face crisis. the year of the Rabbit has been one of immense joy and celebration for the people of Bhutan. In September. On the global front. rooted in deep concerns over the fiscal sustainability of some of its member countries. the colours of autumn burned brightly as His Majesty the Druk Gyalpo wed Her Majesty Gyaltsuen Jetsun Pema Wangchuck in a sacred ceremony in Punakha Dzong.

Chapter VII: Report on SOEs and Government’s Share-holdings. Chapter IV: Budget Estimates for the FY 2012-13.Chapter III: Revised Budget Estimates for the FY 2011-12. Chapter VI: Macroeconomic Outlook in the Medium Term. Chapter V: Tax Measures. Chapter VIII: Report on NPPF and RMA. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 3 . Chapter IX: Report on Trust Funds.

706 m. 31. 14.759 m against the actual outcome (expenditure) of Nu.CHAPTER I: OPERATIONAL RESULTS OF THE BUDGET FOR THE FINANCIAL YEAR 2010-11 The actual outcome of the Royal Government’s budgetary operations for the FY 2010-11 is detailed in the Annual Financial Statement (AFS) report circulated to the Honourable Members.842.812.727 m while the net borrowings amounted to Nu. the FY ended with a lower fiscal deficit of Nu.458.171.774. However. the key fiscal policy objective of the Government and the Constitutional requirement had been achieved.19% and 1. 26. 29. 1. 4 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .9% of the capital expenditure. The total current expenditure of Nu. The statement of the comparison of approved budget with that of actual outcome and financing of the balances is presented in Table 1. projecting a fiscal deficit of Nu. The fiscal deficit and resource gap is 2.058 m was fully covered by the internal revenue of Nu.735.808.1 below.586. with a total realized resources of Nu. 3.538 m.797 m.968 m.376. 4. These financed about 72.674 m and a lower resource gap of Nu. take this opportunity to present the summary of the operational results. 10. With the coverage of the current expenditure by internal revenue at 118%.497.433 m. however.670. 17. 1.80% of GDP respectively. 1.241 m and a resource gap of Nu. 28. I shall. The Government received a total grant of Nu. 293.494 m.1 Overall financial position The approved budget for the FY was Nu.779 m with estimated resources of Nu.

700 1.3% -65. Total Expenditure i.358 53.632.398 15.3% -70.097.Table 1.586.112 13.348.0% -65.113.139.494) Revised Budget 30.427.430.995 1.962.658 16.180 2.905.334 10.400.433 29. Capital III.566 6.6% -3.883.110.80 2.797 11.747 3.886 5.665 273.670.497.059 (3.8% 0.808. Current ii.1% -2.593.781.869 17.000 483.171.968 3.687.706) % VARIANCE Original Vs Actual 5.6% -3.241.568.779 32.727 1.1: COMPARISION OF ORIGINAL BUDGET.774.97 6. Tax ii.668.369 2.905 14.976 5.235 10. Domestic Revenue i.400. Other Receipts (Net) III.430 758.29 76.138 1.237.0% -24.551 11.786.794 1. Advance/Suspense (Net) II.812.2% 10. ACTUAL OUTCOME AND FINANCING FOR THE FY 2010-2011 Table 1: FINANCING AND VARIANCE FOR THE FY 2010-2011   A                       B           C D           RESOURCES I.010 2.929.268.2% -5.066 10.7% -6.161 1.529 (840.905.003.161 8.9% OVERALL BALANCE FINANCING Net Borrowings i.735.258 31. Programme grants a) GoI b) Other Donors ii.000 505.584 (876.674) 1.469 3.700 8.311 215.8% -14.864. in millions Original Budget 26.482.538 15.674 293.4% 14.557 15.158.430) 4.310 3.768 2.351.549.5% 0.521.348.438 6.9% -63.806 2.331.842.227.8% -4.812. Repayments RESOURCE GAP GDP Estimates Overall balance as % of GDP Resource gap as % of GDP 76.486 5.816.201 7.816.999.0% -2.3% 3.865.759 17.059 (3.670.794 11.7% -7.847 (906.088 36.716. Non-Tax II.676.400.042 (1.798 29.241) 4.605) 1.687.973 20. Net Lending Nu.106.732 35. Borrowings ii.861.19 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 5 .4% 7. Project-tied grants a) GoI c) Other Donors OUTLAY I.058 14.376.241 1.120) Actual Outcomes 28.260 1.458.233.619) (4.469) (4.000 381.2% 19.313.5% -9.556.767 4.133 (1.480.3% 305. Grants i.

nonexecution of works due to non-confirmation of estimates and drawings. delays in submission of bills and reports by consultants and contractors and thereby non-adjustment of advances. The current expenditure was Nu. The increase was due to revision of pay and allowances of public servants and related expenditure and travel expenses.682 m or 14. The increase was mainly due to increase in expenditure on structure .1. an increase by 14. 6 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . The increase is mainly attributed to increase in pay and allowances and expenditure on structures and professional services besides reconstruction of infrastructure damaged by Cyclone Aila and September 2009 earthquake. However.905 m.2% over the previous FY.058 m. The current budget was utilized to the extent of 97. delays in completion of works.4%.7% of GDP. 29.735. 14. The total capital expenditure was Nu.4% of GDP.1% of the total recurrent expenditure and 37. The underutilization was due to the delay/non-receipt of funds from donors.2% of domestic revenue. 14.2% and the underutilization was due to expenditure rationalization by the budgetary agencies and delayed local government elections. plant and equipment – general tools and instruments.786.buildings. in comparison to original budget. The expenditure on salary and wages accounted for 44.521. registering an increase of 14. poor responses from bidders. the actual capital expenditure was lower by Nu. 2.847 m recording an increase of 14.2. and professional services.4% over the previous FY and accounted for 19.3 % over the previous FY and accounted for 38.1 Expenditure The total expenditure was Nu. bridges and others.481.2 Actual Budget Outcome 1.

The sales tax has increased by 37. Nu.363 m or an increase of 11.  in  Billion   Variance in Approved Budget & Actual Expenditure 20 15 10 5 0 -5 -10  (2. The tax revenue constitutes 66. This was consistent with the increasing trend maintained in the past.32)    0.31% despite the refund of sales tax amounting to Nu. surpassing the previous year’s collection by Nu.40 % of the total revenue with corporate income tax being the biggest source under direct tax. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 7 . In terms of exemptions.29      0.64)   2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 Approved  Expenditure     Projected  Fiscal  Balance   Actual  Expenditure     Actual  Fiscal  Balance   1.35 30 25 Nu.39)    (0. 25. 17. 1.64%.89)    0. 552.820.2.98 m with the verdict of the Supreme Court on the first Constitutional litigation.40      1.10      (1.58      (2.003 m was forgone in sales tax under various regulations.09      1. Domestic revenue stood at 22.458.2 Domestic Revenue The domestic revenue in the FY 2010-11 was Nu.9% of GDP.797 m.

497.768 m.16. Grants from other donors included Nu.359 m received as budgetary support from the Government of Denmark. 8 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .823 m from the UNDP under Local Government Support Program and technical assistance of Nu. 89.865. the government received a total grant of Nu. and financed 35. The tax and non-tax revenue for the year stands at Nu.3% of the total resources.9% over the previous FY. 1.6% in comparison to the previous FY. 7. 10.6% of total expenditure in the FY. 5.685 m from the ADB as direct payments for various projects.596. 11. The total grant was lower by about 5.93 %.727 m including assistance in-kind of Nu.551 m has been achieved and exceeded by 2. 95.3 Grants During the FY.2.593.882. the revised revenue target of Nu.591 m which translates to 13. 13.In FY 2010-11.7% of GDP.962.486 m and Nu. 1. Grant from the GoI amounted to Nu. The total grant received constituted about 37. Nu.311 m respectively. a rise of 7.

The external debt in convertible currency (other than GoI) was about USD 513. 24. 175. 48.677 m was on account of internal borrowing including the redemption of Treasury bills. 1. 47. constituting about 48. The internal debt outstanding at the start of the FY was Nu.647.665 m. equivalent to Nu. It constituted 98% of the total debt and about 63% of GDP.051.816. With the repayment of Nu.3 Foreign Exchange Implications on Account of Government Budgetary Operations In concluding this Chapter.4 Debt The total government debt outstanding (internal and external debts) as on 30th June 2011 was Nu.266 m. Internal debt External Debt The total external debt outstanding as on 30th June 2011 stood at Nu. 2. which were redeemed in full during the year. I would like to report that the funds mobilized from external sources fully met the foreign currency expenses of the FY and even generated a surplus of around USD 8.619. of which Nu.125 m.4% of the total external debt. The Rupee debt from GoI on account of hydro-power projects was Rs. During the FY 2010-11. the internal loan outstanding as on 30th June. The total principal loan repayment was Nu.095. 2011 was Nu. 674.815 m which was entirely on account of loan availed by the Government to purchase aircraft for Druk Air Corporation.2. 23.7 % of the Government’s total outstanding debt.1. 0.178 m representing about 64% of GDP. 500 m was raised through issuance of Treasury bills. a total of Nu.656 m was availed as ways and means advance and Nu.682 m. 876.302 m and redemption of Treasury bills.042 m. 1.513 m.540 m which is about 50. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 9 .742.

Bhutan’s unemployment rate had fallen to 3.99 m from Nu. 2.7%.1%).8%).4 %. the construction sector.2 Employment As per the Labour Force Survey Report 2011. At a disaggregated level. exports of goods are expected to have grown to Nu. (See graph below). 53.7%.CHAPTER II: PAST MACROECONOMIC DEVELOPMENTS 2.938. In terms of gender. followed by the manufacturing sector at 15.10 m from Nu. as usual.1 Gross Domestic Product (GDP) In the FY 2010-11.1% from 3. 10 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . livestock & forestry) sector is estimated to have grown by 1.339. 2.95 m or an increase of 36.5%.2 %. 39. The growth was largely driven by the construction of hydro-power projects. The primary (agriculture. secondary (industry) by 7.5%) than males (1.544.3 Balance of Payments (BoP) In FY 2010-11. 23.6 %.401. 25. the BoP current account deficit is estimated to have deteriorated to 21 % of GDP as compared to 10% in FY 2009-10. 13.5 % and tertiary (service) sector by 10. Imports of goods are expected to have grown to Nu. it showed more unemployment among females (4. had the highest growth at the rate of 19. the trade deficit is expected to have worsened from Nu.7%. The Report showed that it was more in the urban areas (5.89 m.704.76 m representing an increase of 18. 30.19 m to Nu. the GDP is estimated to have grown by 8. Thus.3 % in 2010.8%) than in the rural areas (2. On the other hand.160.

fuelling growth in imports. In particular. there was significant increase in the import of fuel and vehicles.4 Foreign Exchange Reserves In FY 2010-11. Mangdechhu and Dagachhu hydro-power projects. 4.The marked rise of the trade deficit in FY 2010-11 is attributed to the implementation of Punatsangchhu I & II. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 11 .7 months of essential imports and thus well within constitutional stipulations.15 m. 2.637. the total gross international reserves increased by Nu. 40. It is estimated to have been adequate to meet 29.15 m to Nu.473. The start of the hydro-power projects construction activities led to the growth of ancillary industries/units as well.

equivalent to 64% of GDP. As regards other entities’ debts. 48.5 billion against its own balance sheet. 3 billion besides overdrafts from banks in India incurred from time to time to meet Rupee shortages. This was an increase by 32% as compared with Nu. The debt service ratio on account of the Government’s loans improved from 13.1 billion and interest payments for DCCL project loan (Nu.388 m. During the FY. 36.081.45% in FY 2010-11. 12 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . the total debt service ratio was 12 % in FY 2010-11. 150.788. the debt service included the repayment of hydro-power Rupee debt of Nu.619.82 m).2. 36.5 Debt & Debt Service The total government debt outstanding (internal and external debts) as on 30th June 2011 rose to Nu. The Dungsum Cement Corporation Project had also availed a loan of Indian Rupees 1. the RMA’s debt outstanding was Nu.483 m (55% of GDP) in the previous fiscal year.06% in FY 2009-10 to 11.178 m or US $ 1.01 m) and the RMA’s GoI standby credit line (Nu. As a result. 3.

64 % in between the quarters. tracking price developments in India.1 Credit 13 .33 per US dollar (fiscal year average). 45.8 % in nominal terms from the previous fiscal year.2.1 % and 9. this has been very excessive. with highs of 9.7 Prices The economy recorded an inflation of 8.6%. and trade and commerce.33% in the last quarter of FY 201011. 2. 2. and was valued at Nu.235 billion as on June 2011 as compared to Nu.7% of GDP in June 2010. In the previous year NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 2. The credit outstanding was Nu.6%. 33. 25. the financial sector saw a total outstanding credit of 47% of GDP as compared to 35.6 Exchange Rate During FY 2010-11.246 billion in the previous year. the Ngultrum appreciated by 2. personal loans.8 Banking and the Financial Sector: As of June 2011. registering a rise of 31.8. As compared to estimated nominal GDP growth of 14. This is largely attributed to increase in demand for funds in the building and construction sectors. manufacturing.

1 (12. have contributed to the rapid growth in imports.150.5 (2.9 (3.0 51. Royal Monetary Authority   14 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .) Credit to the Private sector % change per annum (Private) % share of the total credit (Private) Credit to the Corporate sector % change per annum (Corporate) % share of the total credit (Corporate) 2007/08 13.8 2010/11 30.687.7 37.259.2 : Money & Credit (Nu.5 1341.362.3) 32.2).4 104.2 3.7 (19.1 (1.993.620.890.7 2008/09 16.0 7.0 Source: Annual Report for 2010-11.1 38.7 -26.9) 25.5) 17.4 37.955. Table 2.136.4 (3.0 1194. in millions)   Total Domestic Credit Credit to the Government % change per annum (Govt.4) 18.6 109.2) (5.3%.also.3 -40.216. it increased by 38.8 (12.0) (12.234.0 31.) % share of the total credit (Govt.7 31.3) 86. Such high growths of credit to the private sector.6 108.1 883.1 112.6% whereas the nominal GDP growth was 15. (Table 2.0 1159.6) 13.246.9) 33.9 8.3 2009/10 23.0 3.

continued to lead the sectoral credit concentration. 3 billion to Nu.5% in June 2011 from 10. 7. The trade and commerce sector had the highest NPL ratio at 18.6%.5 billion in one year period. 3. the NPL increased from Nu.29 billion (25. followed by the manufacturing sector at 15.1% during the same period the previous year.Housing sector credit.31%) of overall total loans and advances.8% and the housing sector at 12.2 Non-performing Loans (NPLs) The NPL ratio has improved to 8.8.1%. It may be noted that the situation of the housing sector which is often the vulnerable one.9 billion (19%) and manufacturing (18%) respectively. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 15 . has improved its position from 24% in 2010. 10. 2. which accounted for Nu. In absolute terms. followed by personal loan with Nu.

31 % of GDP. ADB and Strengthening Regional Cooperation for Wildlife Protection in Asia – USD 2. Accordingly.129. Table 3.223 5.679.546. 3. the Government continued to mobilize additional resources and rationalise expenditures to reduce the resource gap.174. Two new loans agreements amounting to USD 22. 3. the budget has been revised.120 m (Urban Infrastructure Project – USD 19. the FY started with a fiscal deficit projection of 6. 42.606. Domestic Revenue i. During the year.1: Revised Budget Estimate for FY 2011-12   TOTAL RESOURCES I.536 87.3% to Nu.201 16 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .981 19. 268.336. Non-Tax II.153 m from donor-funded activities and Nu. Thus.CHAPTER III: REVISED BUDGET ESTIMATES OF FY 2011-12 As the Hon’ble Speaker will recall. World Bank) were signed and other negotiations for technical assistance have reached advanced stage. 42.749.047.059 m under RGoB-funding was incorporated.740 m. Simultaneously.819.870 m.980 12.250 m. a supplementary budget of Nu.446.838 m under external funding and Nu. 3.857.021 5.708. Tax ii.959 79. Other Receipts Original Estimates 32.103 m from the original budget of Nu. After ascertaining the implementation progress of the activities and the receipt of additional resources from donors and changes in the domestic revenue projections. 690. the total outlay decreased by 0.1 below.37% of GDP and a resource gap of 6.381 m from RGoBfunded activities after considering the implementation capacity of agencies and the current Rupee situation of the country. there was a budget reduction of Nu.933             Revised Estimates 33. Expenditure rationalisation has been carried out particularly given the high level of imports and the consequent impact on the Rupee reserves.154.035 18.897 m consisting of Nu.759 13. The revised budget summary is as shown in Table 3.

Internal Borrowings i. Project-tied Borrowings ii.752.740 1.111   -3.284                                                           Revised Estimates 598.122 10.752.678.909   -5.257 38.496.688.446 3.089.672   37.309 20.565.894.446 3. External Borrowings i.064.000 500.766 3.556.207. Capital Expenditure Net Lending Less Repayment c.336.629 OUTLAY I.000 2. Project-tied Grants a) GoI b) Others Original Estimates   13. II.196 184.409.303 5.000 2.935.892.986.436 ii.219.818.834.069 3. Current Expenditure 37.383.020.118 8. Adjustment of Previous Years’ Advances IV.   OVERALL BALANCE FINANCING a.858 9.857 -96.958.107   3. Grants Total GoI Total Others i.166 17.808.189 -803.529 17.178.382 8.218 184.740 11.418 37.024 1. Program Grants a) GoI b) Others ii.222   2.000 408.  III.859. Program Borrowings ( ADB $ 4 m ) Less Repayment b.163 13.400.178.377.098 3.740 11.437   1.437 3. Resource Gap (Change in Cash Balances) NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 17 .900. Treasury bills Total Expenditure i.377.412 1.185.327.294.923.400.107     175.740 1.222 5.278.098 3.340 20.

87. 55. there was an incorporation of Nu.59% 4. 151. Nu.  GDP Resource gap % of GDP Fiscal balance % of GDP Exchange rate (Nu.828.1 Current expenditure The current expenditure is projected to increase to Nu.902 m is due to the budget-line provided for the adjustment of previous years’ advances.336.679. With respect to RGoB financing.309 m.153 m and a supplementary incorporation of Nu. 278.399.270 m under MAGIP.2 Capital expenditure The capital expenditure is estimated at Nu.690 m (including the adjustment of previous year’s advances).1. there was a reduction of Nu. 20.189 m representing a small decrease of Nu. 2.3. 3. The balance of Nu. The increase is mainly due to the incorporation of Nu. 2.340 m from the original estimate of Nu.1. 17. 17. Market Access and Growth Intensification Project (MAGIP) funded by IFAD and Education Development Project (EDP) under IDA funding.858 6.672 m on account of RGoB contribution to Road Network Project (RNP) funded by ADB.31% 6.1 Expenditure estimate 3. 600.980.185.031 m or about 1%.32% The details of the revised budget are as follows: 3. This represents an increase of Nu.859 m for the lease-in space at IT Park by the Department of Information Technology and Telecom (DITT) funded by IDA and RGoB counterpart funding of Nu.556.668 m or 1% from the original estimates. 92. 47/USD) Original Estimates 84.37%         Revised Estimates 86.692 4. The budget withdrawal from RGoB18 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .504 m was incorporated for the adjustment of previous year’s advances. For the externally-funded activities.

Pema Gatshel Construction of Sarpang LSS. 2011 earthquake affected communities.880 37. DoR Construction of Tingtibi-Wangdigang by-pass road Phase I.000 30.859 52. MHCA Construction of Pasakha LSS. in Gewogs under various Dzongkhags.716 38.544 37. DoR OCHA emergency cash grant for 18th September. DoR Construction of Genyekha HSS. The revision (external and RGoB) was done based on the Mid-year Budget Review and expenditure rationalization carried out by the agencies.381 m.009 37. No. MIC Construction of Yelchen MSS. MIC Construction of Minjey MSS. Sarpang Improvement works on Gelephu-Trongsa highway. DDM. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Nu.500 30. MoH Lease-in space to DIT in the IT Park.526 31.000 92.2 below: Table 3.550 43. DoR DPR for Kholongchhu Hydro-electric Project (486 MW). in millions Funding JAPAN IDA GoI GoI GoI GoI UNDP GoI SDF GoI GoI GoI ADB GoI GoI GoI GoI Purpose Under External Funding Procurement of ambulances (In-kind). Chhukha Establishment of Community Information Centers (CICs). Lhuentse Construction of Lhamodzingkha MSS.2: Activities with Budget Incorporated as of end April 2012 for the FY 2011-12 Sl. 268. The details of budget incorporations are listed in Table 3.624 43. Dagana Construction of Phuentshothang HSS. Samdrup Jongkhar 94.000 25.financed activities was Nu. MEA NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 19 .Refey by-pass road. DoE.266 Amount Construction of Paro Airport by-pass road. Thimphu Construction of Jyenkhena LSS.507 38. DITT.292 24.750 24. Haa Construction of Khosala.200 34.

DoR Strengthening the institutional capacity of DHI Construction of Pangserpo PS.530 10.000 20.000 13. Gyalpozhing. Kilikhar.500 18.347 18. Punakha Construction of Zilukha LSS. BDBL 20 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . in millions Purpose Construction of one lecture theatre. DoE. CRA Construction of Kuenzaling MSS.008 15. No. MEA Participation in 2 York.626 13.500 18. Mongar Implementation of environment safeguard.626 11. RIM Savings-led Financial Inclusion Project. New Construction of Udzorong MSS.800 10.336 10.257 Funding GoI GoI GoI GoI GoI GoI GoI GoI GoI GoI World Bank PHPA GoI ADHOC/SDS GoI NETHERLN GoI GoI ADB IDA AUSAID GoI GoI UNCDF Construction of Nunnery Centre.760 15. DoR Amount 23.000 19. AUSAID Project. Mongar Construction of Zhirim Lobdra.Sl.000 15. Tashigang Consultancy services for Dagapela – Lhamodzingkha road Construction of Zhirim Lobdra. NEC Installation of GLOF early warning system in the Punakha-W/Phodrang valleys.000 16. Phochhu Dumra. Thimphu Resurfacing of Trongsa-Kuenga Rabten Road. RIM nd Happiness Meeting. Tashi Yangtse Construction of self-catering hostels & 4 unit staff quarter for Jigme Namgyel Polytechnic Expansion of Gongthung MSS.000 22.852 20.000 14. Tashigang Establishment of CICs.190 15. Dagana Construction of Taba PS. MFA Construction of multi-purpose hall. Thimphu Twinning arrangement & networking. RUB Expansion of Tango Buddhist College. 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Nu. Thimphu.612 11.491 14. DITT.000 16. CST. MIC Renovation of Lhuentse Dzong Improvement of Trongsa-Refey road.000 15.

000 6.800 9.448 6. No. RMNP. ILCS Human Resource Development.Sl. SDS HRD. GNHC Advancing Economic Opportunities of Women & Girls (ADEOWG).650 7.380 Funding AUSTRIAN GoI NET O GoI GoI GoI ADB GoI DANIDA ADB GEF UNFPA UNDP IPF IFAD ADB NET O WWF DANIDA REPKOREA IFAD Furnishing of classrooms and hostel. Tashigang Training/HRD services (long term & short term). MoE Training on integration & up-gradation of systems & enhancement of technical competencies. MWHS Enhancing tiger conservation in greater Manas.500 6.693 8. Thimphu. in millions Purpose Supervision & monitoring of construction of Royal Institute & Training Hotel.917 7. NLC Construction of green tea outlet building. MAF Construction of Pam CPS. NCWC Institutional development & capacity building. MHCA Procurement of dairy equipment & training.787 8. DoE. RCSC Undergraduate scholarships.000 9.000 10. Mongar Establishment of nationwide land use/land cover classification.553 6. MEA Postgraduate scholarship (GoI). GNHC Expansion of Damphu LSS.856 8. MAF Dairy plant and equipment. MAF Support to Bhutan Nun Foundation Enhancing G2C service delivery in rural Bhutan.833 8.418 7.931 7.000 8. MAF Construction of Thangrong PS. 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 Nu. CRNRR. Tashigang NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 21 . DUDES. DAMC.479 8.272 7.570 7. Tsirang Preparation of National Transmission Grid Master Plan and its integration with Indian Grid. DoF. TCB Amount 10. DLG.

library & conference block.838 UNDP IPF DANIDA GoI KR II TDF Various Donors Various Donors Support to Department of Culture for Lhakhang Renovation and Cultural Programmes Other development activities Adjustment of prior years’ advances Total Budget Incorporation (External) Under RGoB Counterpart Funding 1 2 Construction of Tingtibi-Wangdigang by-pass road.235 5.348 3.Gumrang feeder road. Sarpang Amount 6.057 Funding GoI GoI UNEP IDA Denmark SDF ADB GoI UNDP IPF 71 72 73 74 75 76 77 Consultation workshop. No.025 5. MAF Generic Skills Development. 62 63 64 65 66 67 68 69 70 Nu.Sl.380 681.195 6. in-country training on basic study methodology & PLaMS integration with MYRB & PEMS. DoR Construction of Autsho . RIM Technology Need Assessment (TNA). NEC Construction of 21 units semi-permanent residential houses for RAPA artistes. MHCA Scaling up of zero-energy cold storage. GNHC Construction of District Court.543 0.822 5. MAF Food security through improved & sustainable agriculture & natural resource management.549 22 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .000 383. in millions Purpose Construction of IT.414 733.130 6. MAF Third Bhutan Living Standard Survey. Tashigang Small Development Project (SDP) activities in various agencies KR II funded activities 5.160 5.742 6. DoR 48.936 5.129. DoA.750 5. RUB Expansion of Gelephu LSS.000 5. NSB Marketing Development Program. DAMC. DoA.899 6.

9% from the original estimate of Nu. No.196 (2010) to 36. 400 m would be collected from these tax measures. 3 4 5 6 Nu. It is expected that around Nu. an increase of 2. and precious metals (gold and silver). The overall impact of these initiatives has been reflected in the revised revenue projections for the FY 2011-12. spare parts.504 690. The total revenue estimate is revised to Nu.759 m. The total tourist arrivals in the country increased from 40.154.897 Funding TOTAL (External + RGoB) 3. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 23 . MoE Adjustment of prior years’ advances Total Budget Incorporation (RGoB) Amount 3.873 in 2010 to 64. The royalty estimate from tourist arrivals is revised in line with the tariff-paying tourist growth projection. the first Tax Bill was passed which included the revision and rationalization of customs duty and sales tax on selected goods like alcohol.765 (2011). The tax revenue is projected to increase by 5% from the original estimates.059 3.270 35.819. DoR Market Access & Growth Intensification Project (MAGIP) Education Development Project (EDP).000 600. of which. 18.028 in 2011. tariff-paying tourists arrivals increased by 35% i.193 2.2 Domestic revenue estimate During the 7th Session of the Parliament. 19.980 m.e. in millions Purpose Resurfacing of Tongsa . vehicles.606. mostly expected from BIT under direct tax. 27.Kuengarabten road. and sales tax along with import duty under indirect taxes.Sl.

021 8.100 269.708.536 297. in millions   A I 1 2 3 4 II 1 2 3 4   B 1 2 3 4 Sources Tax Revenue Direct Tax Corporate Income Tax Business Income Tax Personal Income Tax Other Tax Revenue Indirect Tax Sales Tax Excise Duty Import Duty Other Tax Revenue   Non Tax Revenue Administration charges Capital Revenue Revenue from Dividend Government Departments 5.562 4. The estimate for capital revenue is reduced by Nu.398 1. revenue from profit transfer is revised upward on account of actual receipt from the RMA of Nu.327 17.798 928.738 5.877.599 106.769 5.599 122.916 928.345.Under non-tax category.749.481.278 1.166.404.398 1. 16.857.261.242 Revised % Change 5% -1% -8% 25% 0% 6% 17% 37% 5% 32% 0% 24 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .557 312.073 2.3 Revised Revenue Summary for FY 2011-12 Nu.943 2.690.927 m for the FY as against its original estimate of Nu.824 m or 14% from the original estimate resulting in reduction of the overall non-tax revenue estimate by 0.987.446.710.897.959 297.242 Original (FY 2011-12) 13.383 2.437 2.573.836. 222.947. 200 m and the balance remittance of lottery revenue of Nu.7 %.012.924 265.069 1.223 8.154 4. The revised revenue estimate is presented in Table 3.333 237. Table 3.338.465 1. 29.108 4.095 -1% 0% -14% 2% -1% (FY 2011-12) 12.252 1.569.101 m.240 17.3 below.

Similarly. 3.119.028 21.377.154.629 m or 4. 2. 184 m from the ADB for the Road Network Project (RNP). in millions   5 6 7   Sources Transfer of Profits Other Non Tax Revenue Interest Receipt from Corporations Total Revenue (A+B) (FY 2011-12) 200. the resource gap is expected to decrease to Nu. It is estimated at 4.836. 13. 3. 270.752. which is lower by 3%. IFAD loans for the Market Access and Growth Intensification Project (MAGIP) and the World Bank loans for Decentralized Rural Development Project (DRDP) and Urban Development Project.218 m.980 Original (FY 2011-12) 252.59% of GDP. It is now revised to Nu.125 1. The decrease is due to low disbursement expected by about Nu.122 m based on the commitments and agreements signed with the development partners.097 19.4 Fiscal deficit & resource gap With the budget revision. the fiscal deficit amounts to Nu.815.759 Revised % Change 26% -47% -1% 3% 3.222 m. 3.8% decrease from the original estimate of Nu.859. 11.403.264 m.606.Nu. 3. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 25 .986.37% in the original budget.858 m. The improvement in the fiscal balance is due to enhancement of the domestic revenue and fall in expenditure.500 18.3 External grants The original external grant was estimated at Nu.196 m.000 40. 2.496.32% of GDP as against 6. 5.437 m as compared to the original estimate of Nu. 13.5 Borrowings The disbursements from external borrowings are projected at Nu. The disbursements include Nu.234 1.

The debt service ratio is likely to improve from 11. 4. which is the balance of loan availed for the purchase of aircraft in 2005. 3.5 % is expected mainly due to disbursement for hydro-power projects. principal plus interest) is estimated to be Nu.817 billion as of date) through a series of short term treasury bills for purposes of cash management. The external debt service (i.45% in FY 2010-11 to 10. which is about 4. 56. 26 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .743 m as of June 2012 which is about 65. The T-bills were redeemed upon receipt of funds from the GoI.12%. It will be liquidated in FY 2015-16. The growth in debt stock of about 18.91 % in FY 2011-12 with increase in exports by 9.031. 4.209 m. The domestic debt stock by the end of June 2012 is estimated to be Nu.As regards internal borrowings. 3. no borrowing was undertaken except for (Nu.68 m.e.701. made up of hydro-power debt and budget-related debt.7 Foreign Exchange Implications onAccount of Government Budgetary Operations The revised budget is likely to draw on the foreign exchange reserves by an amount of approximately USD 43.6 Debt and debt servicing External debt outstanding. The level of funds raised through treasury bills has increased mainly on account of providing pre-financing for SDP funded activities. is estimated to be Nu.16 % of estimated GDP.64 % of GDP. a supplementary appropriation Bill has been prepared which has been circulated to the Honourable Members. Supplementary Budget Appropriation Bill As required by the PFA.575. This is with the assumption that the entire revised budget will have been spent.798 m.

The FY 2012-13 marks the last year of 10th FYP and all the activities in the year are expected to be completed by the end of December. 2012 and the second half of FY will focus on the consolidation of FYP activities.CHAPTER IV: BUDGET ESTIMATES FOR THE FY 2012-13 Now I place before the House the budget for FY 2012-13. Ø Budget provision for furniture and computers only for schools under RGoB funding. postage. has been capped at FY 2011-12 budget. 1. multilateral and international meetings. compound wall and gates. electricity etc. Ø Budget provided for only mandatory participation in regional. Ø Budget for office stationeries. Ø No budget for purchase of vehicles. Ø Budget for Advertisements reduced from FY 2011-12 level. New appointments to be restricted to budget provision and not as per the approved strength. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 27 . The budget is prepared mainly with the objective to complete the 10th FYP ongoing activities and in line with the following fiscal guidelines. fencing. Ø Agencies budget include provision for new appointments. Ø Budget for in-country travel reduced by 10% from FY 2011-12 level. Ø No provisions made for annual conferences. Ø Hospitality and entertainment budget reduced by 20%. Expenditure rationalization measures Ø Priority for completion of on-going works and no new activities that will spill over to 11th FYP. staff quarter construction. telephone.

4. OTHER RECEIPTS III.504. etc.891.875. Non-Tax II. revenue and employment generation.1: Budget Summary for the FY 2012-13 Nu.1 below: Table 4. in millions Estimates RESOURCES I. Sustainable Fiscal balance Ø Avoid current operating deficit. Ø External borrowings shall not be used for purchase of vehicles. Tax ii. Ø Fiscal deficit below 5% of GDP.457 15.381 5.241 7. Ø Promote agriculture production. The budget estimates for the FY 2012-13 is summarized in Table 4.691. 3. road shows.042 21.2. Sustainable Resource Gap Ø Ensure that government’s internal borrowing does not crowd out private sector.344 % of Total 100 66 48 18 34 24 0 28 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .157. capacity building including trainings. distribution and marketing. study visits. DOMESTIC REVENUE i. Ø External borrowings shall only be availed for economically and socially viable projects.076 10.326 42. GRANTS Total GoI 31.282. Promote sustainable socio-economic development Ø Invest in industries with potential for export.

630 16.343.56% 0.Nu.725 1.549 18.400.173.252.186.1 Resources As shown in Table 4. in millions Estimates Total Others i.157.190 33.000 675.029.516 6.65% % of Total 10 7 4 2 27 19 8 100 100 53 47 OUTLAY I.712   175. 21.197 1. Total Expenditure i. Project-tied Borrowings $ 1.075.511.262.239 34. The details are as follows: NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 29 . Capital Expenditure II.303 670.708.104.042 m.1.326 2.486.310 -1.891.781 1.595. comprising of domestic revenue of Nu.915 2.241 m.691. Internal Borrowings Less Repayment c.595.362.280 m) b) Others 3.725 8. 10. Current Expenditure ii. External Borrowings ii.7m) Less Repayment b.735.000 2.733 1.431 102.615.919 -1. Program Grants a) GoI b) Others ii. 31. Resource Gap (Change in Cash Balances) GDP Fiscal balance % of GDP Resource gap % of GDP 4.1 the total resources for the FY 2012-13 are projected at Nu.197   1. Net Lending OVERALL BALANCE FINANCING a. Program Borrowings (W/B DPC $33m & ADB i.515.457 m and external grants of Nu. Project-tied Grants a) GoI (includes SDP Nu.

The ratio of tax to non-tax revenue is projected to improve to 72:28 from 69:31 in the original estimate of FY 2011-12.2: Domestic Revenue Estimate for the FY 2012-13 Source of Revenue Tax Revenue Direct Tax Corporate Income Tax Business Income Tax Personal Income Tax Other Tax Revenue Indirect Tax Sales Tax Excise Duty Import Duty Other Tax Revenue Amount (Nu.10 30 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .097. The revenue estimate is shown below in Table 4.23 44.411 1.839 1. in millions) 15.92 %.282.387.457 m is projected to cover current expenditure fully.86 9.56 16.05 7. The estimation from profit transfer is projected to be lower than the revised estimates of FY 2011-12 based on the information provided by the RMA.37 24.04 5.747 3.895.19 8.66 % while non-tax revenue is projected to increase by 2.381 9.945 5.157.2: Table 4. 21.1 Domestic revenue The domestic revenue growth in FY 2012-13 is estimated to be around 10%.119 2. The growth in tax revenues (direct and indirect taxes) is estimated at 13.022.213 % to total revenue 72.099 21. The estimated domestic revenue of Nu.16 1. and no major policy changes takes place.09 27.488. The estimation is based on the broad assumption that the economic activities will continue to perform well.089.4.710. The increase in revenue is estimated mainly from BIT and PIT under tax revenue along with the increase from sources under non-tax.060 363.1.489.067 1.262 5.72 0.

457 % to total revenue 27.913 125. It is expected to cover 66% of the total capital expenditure.72 100.173.66 0. It is a decrease of 9% from that of the revised expenditure outlay of the FY 2011-12.930 21.875. Dividend Transfer of Profits Other Non Tax Revenue Interest Receipt from Corporations Total Domestic Revenue (A+B) Amount (Nu.241 m which constitutes 34% of the total resources.326 m which constitutes about 70% of the total grants.2 Expenditure outlay The total expenditure outlay (i.996 200.00 4.947 3. in millions) 5.e. total expenditure + net lending) for the FY 2012-13 is estimated at Nu.2 Grants The total grant disbursement in the FY 2012-13 is estimated at Nu. 1. the total disbursement from our major development partner GoI is expected to be Nu. In the FY.12 8. the program grant is estimated at Nu.076 351.50 14.486.239 m.1. 10. The expected disbursement is based on the agreement signed with the development partners.504.000 25.400 m is program grant and Nu. 6.844.157. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 31 .77 1. 675. Nu.23 0. Of the total grant from GoI. 33. 2.280 m for SDP.511.062 1.691.227 317.190 m.95 0.104. 7.59 1.009. 1.725 m and project-tied at Nu.326 m is project-tied grants which includes Nu.Source of Revenue Non Tax Revenue Administrative Fees and Charges Capital Revenue Revenue from Government Departments. From other development partners. 4.

100.128 143.863 m and KHPC – Nu. The increase is mainly due to the provisions kept for new appointments and higher maintenance costs of public infrastructure.940. Interest payment for domestic loan is about Nu. out of which Nu. No. Salaries and wages account for 43% of the total current expenditure and 37% of the domestic revenue. The total interest payment for the FY 2012-13 is estimated at Nu.592 m (95%) is on account of interest payment for external loans.305 m.940.592 100. which is about 5% increase over the revised estimate of FY 2011-12.011 25. 201.630 m. The interest payment for GoI hydropower loans alone constitutes about 73% of the total interest payment.2. 1. 1 2 3 4 5 6 Lender GoI (THPA – Nu.557 213.041.318 1. Table 4. The statement of interest payment for the FY 2012-13 is presented below in Table 4.371 3.694 m) Austria (BHPC.262. 2.207 58.1 Current expenditure Current expenditure is estimated at Nu.041.3: Statement of interest payments for the FY 2012-13 Nu. The salaries and wages also include the provision of increased pay of Tshogpas due to the recent salary revision. DHPC and RE) JICA (Rural Electrification) IFAD World Bank ADB Total external interest payment Total internal interest payment   Grand Total Amount 1.in millions Sl. 18. 1.713 m on account of government equity for the purchase of aircraft.497.3. The current estimate also includes provision for the revised student’s stipend.295.305 32 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .4.713 2.

in millions Sl.160 75.600 65. Table 4.000 203.000 67.744 Current   123.678 87. No.600 51. 61 m) in those areas where there is no cable TV and also not covered by terrestrial signal for TV and FM radio.744 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 33 .100 132.000 1. development of parks and sewerage works.744 m kept for the construction of the ancillary infrastructure (road. water supply and bridge) of the Education City project.941 488. telecommunication.800 14. 1.470 49. The list of subsidy recipient agencies is given in Table 4. 1 2 3 4 5 6 7 8 9 10 11 12 Agencies Rural House Insurance Scheme (RICBL) Bhutan Broadcasting Service BCCI Secretariat Wood Craft Centre City Bus Service (Bhutan Post) Druk Air Corporation Thimphu Thromdey Phuentsholing Thromdey Samdrup Jongkhar Thromdey Gelegphu Thromdey Royal University of Bhutan Education City 13. This subsidy includes Nu.970 24.000 6.888 143.321 m.100 132. 143.888 143. water supply.160 75.000 80.000 Total 20. Subsidy to Thromdeys includes the budget for the construction and improvement of roads.000 1.678 20.881 488.940 Capital 20.288.4: List of Subsidy Recipient Agencies Nu. The provision is almost at same level as compared to the previous years’ estimate.500 24.000 6.Subsidy is estimated at Nu. The capital subsidy to BBSC is mainly for the installation of transmitters (Nu. This installation will maximize the coverage of both terrestrial TV and FM radio signal in rural areas.4.800 14.

4.2.2 Capital expenditure
Capital expenditure is estimated at Nu. 16,252.919 m accounting for about 47% of the total expenditure outlay. Given the need to avoid aggravating the demand situation in the economy, the capital expenditure budget has been restricted to a certain extent.

4.2.3 Net lending
During the FY, lending to corporations is estimated at Nu. 1,009.632 m. Of the total, Nu. 986.132 m will be on-lent to BPC for rural electrification projects, and the balance of Nu. 23.500 m for rural credit to BDB. The total recoveries from corporations are estimated at Nu. 2,038.942 m, of which, the recoveries from GoI hydropower loans (Tala and Kurichhu) account for 77.58 %. The recovery from Druk Air amounts to Nu. 33.811 m. Therefore, the Net Lending (lending – recoveries) is estimated to be negative Nu. 1,029.310 m.

4.3 Financing 4.3.1 External borrowing
External loan disbursement (project-tied) during the FY 2012-13 is estimated at Nu. 3,443.781 m as presented below in Table 4.5.

Table 4.5: External Borrowing for the FY 2012-13
Sl. No. 2 1 ADB Lender World Bank Program Borrowing Project-tied Borrowing Nu. in millions Total 1,897.279 643.356 482.195

1,650.000 85.000

4 5

3

IFAD Government of Austria Total

JICA

1,735.000

192.575 228.376 1,708.781

643.356

397.195

247.279

192.575 228.376 3,443.781

34

NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13

4.3.2 Internal borrowing
The Government may resort to internal borrowing of Nu. 670.431 m representing 0.65% of GDP during the FY assuming that all the budgeted activities are implemented fully. However, past trends have shown that actual implementation is lower than budget.

4.3.3 Debt principal repayments
The total principal repayment is estimated to be Nu. 2,519.015 m, of which Nu. 2,343.712 m (93.04%) is on account of external loans and the balance of Nu. 175.303 m is for domestic loan. The details of the principal loan repayment by lenders are presented in Table 4.6 below: Table 4.6: Statement of Principal repayments for the FY 2012-13
Nu.in millions Sl. No. 1 2 3 4 5 6 Asian Development Bank Austria Denmark Government of India International Fund for Agriculture Development World Bank Total external principal repayment Total internal principal repayment Grand Total Lender Amount 238.208 321.566 89.804 1,581.842 22.524 89.768 2,343.712 175.303 2,519.015

NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13

35

4.4 Sector Allocation
Given the commitment of the government towards socio-economic development and poverty alleviation, 25% of the total budget is allocated to the social sector (Health 7% & Education 18%) and 35% to Economic and Public Services which includes Agriculture (12%) and Roads (10%). The sector-wise allocation is provided in Table No. 4.7 below.

Table 4.7: Sector budget for the FY 2012-13
Nu in millions Sectors Social Services Health Education Current 6,067.367 1,788.858 4,278.509 3,592.953 1,847.716 449.263 330.542 437.331 459.577 68.524 584.690 2,560.608 3,415.707 2,041.305 2,041.305 0.000 18,262.630 Capital 3,313.036 817.967 2,495.069 9,770.601 2,703.578 437.351 3,391.610 1,293.766 1,278.850 665.446 644.812 722.944 1,801.526 3,528.647 2,519.015 1,009.632 19,781.566 Total 9,380.403 2,606.825 6,773.578 13,363.554 4,551.294 886.614 3,722.152 1,731.097 1,738.427 733.970 1,229.502 3,283.552 5,217.233 5,569.952 4,560.320 1,009.632 38,044.196 Percent 25% 7% 18% 34% 12% 2% 10% 4% 5% 2% 3% 9% 14% 15% 12% 3% 100%

Economic and Public Services Agriculture Mining & Manufacturing Roads Housing & Community Communications Energy

Cultural Services Law and Order Services General Public Services National Debt Services Total Repayment Lending

36

NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13

The operations and maintenance costs of these services are budgeted at Nu. The health care services are provided through 31 hospitals.1 Health With major achievements which include 90% of primary health coverage. 666 nurses. 38 DHSOs/ADHSOs. 89 pharmacists/technicians. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 37 . Nu.Figure 1: Sector Allocation in FY 2012-13 4.4% and with 88% of the population having access to safe drinking water (Annual Health Bulletin. 81. 163 BHU-II and 36 Indigenous hospitals supported by 3.1 per 1000. infant mortality rate at 40. 463 lab technologists/technicians and 1429 administrative support staff. 105 m is for referral treatment in India. 36 Dungtshos and 54 Menpas. immunization coverage at over 94.4. 468 health workers and clinical officers.414 civil servants comprising of 171 doctors. 1.858 m for the new FY. 2011).600 m is for procurement and maintenance of hospital equipments. Nu. Among them are Nu. 15 BHU-I.788. Bhutan is to set to attain most of the health-related MDG targets by 2015. 135 m provided for procurement of drugs.

there are constructions of 37 BHUs and 12 ORCs. 20 m for the construction of Medical College under GoI funding. There are constructions of 139 schemes (127 new. For that purpose. In the FY. it 38 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . With this allocation. a sum of Nu.883 m under RGoB and WHO funding for various scholarships. erstwhile Bhutan Institute of Medical Science (BIMS). 245. This includes Nu. In the FY.830 m is allocated in the FY in various Gewogs. a sum total of Nu. 34. There are currently 214 medical personnel undergoing medical courses in and outside Bhutan including 77 nurses who are trained in India.72.750 m is allocated for the purpose which includes Nu. 135. renovation of 149 schemes and protection of 42 spring water sources.In the new FY. Rural Water Supply One of the main priorities is to provide safe. I would like to thank the people and the government of Japan and India for their gifts. The Government’s commitment to provide 2 ambulances in each hospital has been overachieved and for this.685 m is allocated for the on-going constructions of health units and outreach clinics in various Dzongkhags and Gewogs. HRD In order to address the shortages of medical personnel in the country. budget continued to be provided for scholarships and training to the medical personnel. clean and convenient drinking water to the people in the rural areas. The works are still continuing towards the establishment of University of Medical Science of Bhutan (UMSB). no budget has been required for the procurements of ambulances. which was initiated to address the shortage of medical personnel as well as to enhance the knowledge of the existing medical personnel. Health units and outreach clinics Nu. 9 spillovers and 3 extensions).

challenges remain.332 9. The measures include timely education. However. No.8. UMSB Amount 70. 1 2 3 4 Activity Procurement of hospital equipments & instruments. Table 4.800 49.is expected that RWSS coverage will be achieved fully.9: Major capital works in health sector Nu.221 m is allocated to the Narcotic Control Agency (BNCA) for activities to prevent drug abuse.819 17. rehabilitation. a sum of Nu.000 20.744 135.000 22. MoH Construction of therapy unit at ITMS Construction of Central Regional Referral Hospital. making it difficult to achieve 100 % coverage. with water sources drying up and often new sources not easily available. after-care services and social re-integration of drug users.135 0. Table 4. Gelegphu Construction of Medical College. No. in millions Sl.830 Other Health activities Among other budget allocations. 16. in millions Sl. 1 2 3 4 5   New Spillover Extension Renovation Spring Water Source Protection Total Category of RWSS Numbers 127 9 3 149 42 330 Amount 58.9.000 Funding RGoB RGoB GoI GoI NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 39 .670 20. The different categories of works involved along with the number of water supply schemes and the budget allocations are given in Table 4.8: RWSS Works for the FY 2012-13 Nu. treatment. early detection. The major capital works in the health sector are shown in the Table 4.

2 Education Education sector has made commendable achievements in 10th FYP.065 29. MoH Construction of BHU-II & staff quarters.479 11. Chhukha Construction of BHU I. Muhung. Thinleygang. MoH Maintenance and procurement of spare parts and accessories for medical equipment. Chhukha Construction of BHU I.000 5.000 7. Punakha Construction of BHU II. nurses and technologists. MoH Construction of 8 unit staff quarter at Lhuentse Hospital Construction of BHU I. Thangrong. in millions Sl.000 19. Sengor. Mongar Construction of BHU.970 10.000 8. W/Phodrang Up-gradation of ORC to BHU II. Menbi Gewog.000 5.550 13. Zhemgang Reconstruction of Narang BHU. Lhuentse Amount 19.562 Funding RGoB WHO RGoB RGoB RGoB GoI RGoB GoI (SDP) RGOB GoI (SDP) GoI (SDP) RGOB GoI (SDP) RGOB RGOB RGoB RGoB RGOB RGoB GoI (SDP) RGoB RGOB Continuation of medical education for nurses.420 10. Tashigang Construction of BHU II.825 14. Eusa. Gangzur Gewog. Barshong.000 4.000 15. These are reflected by various indicators such as the gross primary enrolment ratio which 40 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .300 5.620 9. Khatekha. Mongar Up-gradation of ORC to BHU II. Dungna.000 7. Thimphu 4. Mongar Construction of BHU II. Mongar Construction of Bartsham BHU I. Lhuentse Relocation of Martshala BHU II.4. Khoma Gewog .000 14. No. S/Jongkhar Up-gradation of Dangling ORC to BHU II. Thimyul (Chadak). Serphu (Gangla).000 6.909 5.Nu. MoH Specialization/master courses for doctors. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Activity Construction of Medical Supply Depot at Phuentsholing Long term HRD training through WHO support. Lhuentse Construction of BHU.600 10.000 15. MoH Construction of Public Health Laboratory.

The earlier stipend of Nu. Nu. 120. The sector’s budget includes Nu.322 m has been allocated in the FY 2012-13 for the training of teachers during the winter vacation in the colleges at Paro and Samtse. In addition. The government has recently approved an increase in the monthly stipend for students in boarding schools. For the students to have an all-round development (wholesome education).500 m for major on-going capital works like the construction and expansion of two HSS. 21. A budget of Nu. 347. a budget of Nu. 700 has been revised to Nu.668 m is allocated to NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 41 .is 120% against the MDG target of 100% and net primary enrolment ratio of 95%. The sector’s budget also includes the budget for Royal Education Council (REC).578 m in the FY which is the highest share of budget at 18% of the total outlay.956 m is earmarked for various scholarships including Queen’s Endowment for Cultural Studies (Nu. nine MSS. 1. To fully achieve the targets. Royal Institute of Management (RIM) and the Dzongkha Development Commission (DDC). In order to fulfill the Ministry of Education’s policy of providing school bus to boarding schools with more than 200 students and day schools with more than 800 students. the sector has been allocated Nu.519 m is provided to all the schools under school enrichment programme. a budget of Nu. a budget of Nu. 53. A budget of Nu.443 m for undergraduate courses offered to students studying in India. 307. 30 m is kept for the procurement of school buses for 28 schools. Australia. under GoI and RGoB funding. Canada etc.000 per student. The remaining scholarship budget is of Nu.076 m) which was initiated during the Royal Wedding Celebrations in the year 2011. Significant among the budget items is the training of teachers. 26. eleven LSS and three PS in various Dzongkhags under Education Development Project (EDP) funded by GoI. 6. 305.271 m is allocated to REC to address issues related to the quality of education. 2.773.

Mongar (reconstruction) Teachers training on roll out in the cluster on educating for GNH by ToT in 18 districts Amount 50. From FY 2012-13. 19.336 25.000 30. This programme is contributing towards the adult literacy target of 70% by 2013 (adult literacy rate of 53% was reported in 2005 when Population and Housing Census was conducted).73.000 30.000 20.000 30. a budget of Nu. Punakha Construction of kitchen and store at three primary schools. In order to promote our national language Dzongkha. No. 30 m) and IT and library (Nu. Nu. 14. 913. Pema Gatshel Construction of Genyekha HSS. The major capital works in the Education sector are given in Table 4.800 Funding GoI RGOB/GoI GoI GoI GoI GoI GoI GoI GoI WFP UPSIDE/ADB UNICEF 42 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .10.049 m is allocated to DDC.894 m is allocated for non-formal education.the RIM which includes the construction of student’s resource center (Nu. Lhuentse Undergraduate scholarships (existing/projected) Construction of Kuenzangling MSS. Tashi Yangtse Construction of Yelchen MSS.000 31. Table 4. Nu.000 30. For the development of tertiary education in the country.10: Major capital works in education sector. Thimphu Construction of Udzorong MSS. 488. Tashigang Construction of Thimshing MSS.000 30. 1 2 3 4 5 6 7 8 9 10 11 12 Activity Construction of Minjey MSS. S/Jongkhar Construction of Dashiding MSS. Tashigang Construction of Phuentshothang HSS. a sum of Nu.888 m based on the number of students.000 305.790 m is allocated to Royal University of Bhutan (RUB) which includes subsidy of Nu. The number of NFE centres has increased remarkably from 6 with 300 learners in 1992 to 740 with 12.443 30.968 learners and 834 instructors in 2011.000 30. in millions Sl.410 m) under GoI funding. SAFED Construction of Narang CPS.

Dagana Construction of MPH at Kabesa LSS. Sarpang Training . Teacher Education Institute Project Amount 10.599 7. Chhukha Construction of MPH hall at Tshangkha LSS.000 15.410 11. RIM Construction of IT & library block. Thimphu Construction of Jungzhina PS. Sarpang Construction of hostels for boys & girls with warden/ matron’s quarter & toilet. in millions Sl.124 8.800 Funding RGOB GoI GoI GoI RGOB UPSIDE/ADB RGOB GoI RGoB RGoB RGoB RGoB GoI GoI AusAID GoI GoI GoI GoI GoI GoI GoI RGoB RGoB RGoB RGoB GoI Construction of student’s resource centre. Dagana Construction of hostel for boys and girls at Gesarling LSS.650 5. Dagana Construction of MPH at Geserling LSS. Dechhenchheoling MSS.800 7.000 18.000 14.000 11.000 8.700 15. Samchheoling LSS.537 6.200 5. MPA/MM/MBA program support. Tongsa NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 43 .000 16.Nu. Dagana Construction of science lab at Gesarling LSS. Dagana Construction of academic block at NIVI Construction of Pam CPS. Chhukha Up-gradation of Bitekha LSS.780 30.000 11. W/Phodang Construction of Chheokhorling LSS.549 7.000 13.152 8. Punakha Construction of MPH at Nobding LSS. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 Activity Computers and Printers for school Construction of Pasakha LSS.Ed. Tashigang Distance B. RIM Construction of administrative block/classroom & toilet at Phuentsholing PS. Dagana Construction of 64 bedded hostel at Tshangkha LSS.HRD.020 8.020 7. primary general at Samtse College of Education Construction of Sarpang LSS.760 7.125 20. Chhukha Construction of Jenkana LSS. Thimphu Twinning and networking.000 12. Teacher Education Institute Project Professional Services. No.860 7. Haa Construction of Pangserpo PS. Paro Up-gradation and expansion of Kamji LSS. RIM Construction of MPH.000 8.

RNR sector plays a vital role in achieving self sufficiency in the economy.030 m is allocated for the on-going constructions and improvements of Gewog centre roads. people will benefit through market access. The total budget allocated to this sector is Nu.650 8.800 6. With regard to Gewog centre connectivity.000 21.Nu. From the remaining 12 Gewogs. MoH Amount 7. increased income and better living conditions thereby reducing poverty. Tongsa Procurement of school buses. 40 41 42 43 44 45 46 47 Activity Construction of MPH at Tshangkha LSS. Samtse Construction of classrooms at Tashigang MSS. These will bring the total Gewog center connectivity to 193. During the FY 2012-13. 656. 611.000 Funding RGoB RGoB GoI GoI RGoB RGoB RGoB RGoB 4.4. No. Tashi Yangtse Up-gradation of Peljorling MSS. 44 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . Tongsa Construction of MPH at Ramjer LSS.294 m which is about 12% of the total outlay. Paro Up-gradation of Gumtoe MSS. With the completion of these roads. Nu. The key initiatives in this sector are as follows: Farm Roads A sum total of Nu. The RNR activities are focused in rural areas and it has direct implications on poverty reduction through rural livelihood enhancement for more than 69% of the country’s population. in millions Sl. 4. Tashigang Construction of MPH at Radi MSS.3 Renewable Natural Resources (RNR) sector As an agrarian country. bringing the total coverage to 94% including Merak Gewog where the road may not go right upto the Gewog centre.000 30.250 8.000 10.245 m is provided to complete constructions of 184 farm roads and to improve 77 of them during the FY. a total of 166 Gewog centres will be connected by road by the end of FY 2011-12. Tashigang Extension of football ground at Sherabling HSS.551. increased economic activities.250 36.

550 m is allocated under EU financing. the Government’s commitment to have all Gewogs connected by motorable roads will have been virtually achieved. Lauri. Nu. For Lunana Gewog. an additional budget of Nu. supply of equipment. Currently. collection sheds. W/Phodrang and Punakha). will be partially connected by the Shana-Misizam road. 23 m is also kept for farmers’ trainings which will further facilitate the production of vegetables and fruits. A budget of Nu. For improvement of rice productivity in five Dzongkhags (Sarpang. There are also a number of co-operatives and farmers group organized for efficient agriculture production through proper supply chain mechanism and economies of scale. Gakidling. 10. Getana) will be connected from the road constructions that will spill over to the 11 FYP. supply of seeds and farming equipment. construction of 85 km of mule track along the Phochhu river is taken up in place of motorable road. a budget of Nu. Sagteng. a budget of Nu.7 Gewogs (Naro.954 m). construction of one-stop farmers shop etc. For rehabilitation and construction of Irrigation Channels in various Dzongkhags. For the promotion of Co-operatives and Farmers Group. 26.789 m has been allocated for the on-going constructions of 29 RNR centres.e. Laya. Nu. 33. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 45 .11. 214. there are 167 RNRCs and by the end of FY 2012-13. The budget includes Nu.2 m for capacity development. Soe and Lingzhi. The detailed activities of RNR sector is provided in Table 4. Co-operatives & Irrigation Channel In the FY 2012-13. while the Nichula and Geling Gewogs have no take-off points.180 m is allocated. RNR Centres (RNRCs). 13.409 m is allocated to the Department of Agriculture Marketing and Co-operatives (DAMC).67. representing 96% achievement. 61. With this. Samtse. With the recent drive to increase in-country vegetables and fruits production. 196 RNRCs will be completed. Sombaykha.979 m has been allocated for the construction of green houses (Nu. S/Jongkhar. Two Gewogs i.

(Sarpang. DoFPS Subsidy to the National Seed Centre.400 18. DoL Implementation of bio safety framework implemented by BAFRA Development of Sustainable Soil Management Plan. Serbithang Construction of staff quarter at UWICF Scaling up of zero energy cold storage. Thimphu. DoFPS Rice Productivity Improvement Program.250 7.700 9.11: The major capital works in RNR Sector.(hay bailing machine & medium feed plant for 6 Dzongkhags). DAMS 46 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .Table 4. EU RNR SSP Financing for Rice production. Construction of City Veterinary Hospital. Samtse.000 6.000 Funding GoI GoI/JFPR GoI EU GoI World Bank GoI Mac Author World Bank IFAD UNEP/GEF World Bank World Bank World Bank WWF BTEFC UNEP/GEF EU IFAD RGoB RGoB Strengthening Regional Cooperation for Wildlife Protection in Asia Project. S/Jongkhar.000 33. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Activity Construction of irrigation channels in various Gewogs Improvement of farm roads in various Gewogs and Dzongkhags Construction of City Veterinary Hospital. Nu.000 7. ABSD. Punakha valley).768 6.500 10. DoA Support to farmers through DRDP project.628 9.283 6. DoFPS Sustainable Forest Management Program. Phuentsholing HRD Training. in millions  Sl.180 155.397 7. DoA Feed & fodder development .315 68.116 6. W/Phodrang. DoA Amount 214. SLMP.238 8. DoA Support to Farmers Association. No. DoA Institutional Development & Capacity Building. Paro Establishment of Langjophakha Greenery Park Hiring of consultant for development of bio-safety frameworks.000 18.550 20.000 13. MAF Construction of bio-security laboratory at NCAH.700 11.000 15.

4 Vocational training and employment In order to provide gainful employment to the youth entering the job market and to reduce unemployment.4. 22 23 24 25 26 27 28 29 30 31 32 33 Activity Procurement of veterinary equipments to be distributed throughout the dzongkhags. emphasis continues to be placed on vocational skills training.960 23. DoL Conflict management.000 5. in millions  Sl.6 m). DoA Construction of Park office at Wangchuck Centennial Park For establishment of 7 demo sites for drip & sprinkler irrigation channel. During the FY 2012-13. budget is provided for initiatives such as Youth Pre-employment Engagement Program (Nu. DoL Procurement of parent stock of poultry.720 5. MAF Amount 6.. Apprenticeship Training Program (Nu.111. Completion of Dolongang VTI in Sarpang (Nu.090 9. DoFPS Procurement of agricultural machineries.000 5. 5. 8.789 1. No.860 m) and Nursing Training (Nu. DoA Rice and Organic Production Program. DoA For dairy/ poultry/ piggery & fishery subsidy support. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 47 . gender and regional training on CF Management Planning.12.800 5.000 5. DoL Construction of RNR centers in Dzongkhags and Gewogs Construction of farm roads in various Dzongkhags and Gewogs Farmer’s training in Dzongkhags and Gewogs. DoA RNR SSP Project Monitoring and Evaluation.000 67.610 5.500 5. 25 m) among others.Nu. Some of the major capital activities under this sector are given in the Table 4. 78 m) is expected to provide additional capacity for vocational training that will contribute towards reducing unemployment.000 Funding RGoB PFMP World Bank EU WWF World Bank EU EU RGoB RGoB/GoI RGoB/GoI RGoB 4.

103.000 33.722.900 5. 472.800 4. 384. Nu.600 4. 1 2 3 4 5 6 7 8 9 10 11 12 Activity Establishment of Dolongang VTI. The road sector budget also includes Nu.12: Major Activities of Vocational Training and Employment Sector Nu. The construction of Gyalpoizhing-Nganglam Highway (Nu. 77.310 m for Dzongkhag roads and Nu.700 5. During the FY 2012-13.825 m for the improvement.5 Roads Every financial year. arts & crafts and construction (ABSD) Development of assessment resources.862 m) which forms a part of South East–West Highway.016 m) and construction of Raidak-Lamoidzingkha Road (Nu.4. Nu.528 m is for the construction and improvement of primary national highways.152 m is allocated. 1.470 m is for construction of secondary national highways. resurfacing and monsoon restoration works on roads.050 Funding GoI DANIDA RGoB GoI GoI GoI DANIDA GoI DANIDA RGoB GoI RGoB HRD for private sector Development and implementation of publicity tools Youth pre-employment engagement program Occupational health and safety program National Graduates Orientation Program 4. Major road constructions that will continue during the FY include construction of Manitar-Raidak Road (Nu.769 6. 366. No.000 8. Gomphu-Panbang Highway (Nu.470 25. Sarpang Social Sector Program Support (SSPS) GNM training for the Health Sector (ABSD) Apprenticeship training program Training for hospitality. 3. 319.Table 4.700 6. in millions Sl.880 m for bridges.100 7. training of assessors and assessment Special training programme for school leavers Amount 78. 210 m) and realignment of 48 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .102. 450 m). a budget of Nu.860 8. this sector is provided with substantial amounts of budget given the importance of roads. of which. Nu.

388 77.Hilay Check Post-Sarpang town Road (Nu. Some of the major capital activities under this sector are given in Table 4.000 150.000 RGoB/ADB Construction of Chamkhar-Dekiling bypass road 4 5 6 130.000 2.13. No.600 61.13: Major capital works under Road Sector Sl. 117. Table 4.000 24.000 122.016 Amount   Nu.000 450.   1 2 3 4 5 6 7 1 2 3 4 1 Activity Construction of Primary National Highways Construction of Manitar-Raidak Road Construction of Nangar-Ura road Construction of Raidak-Lhamoidzingkha Road Construction of Gyalpoizhing-Nganglam Highways   103.650   190. 24 m) will also continue.650 m) will be completed by FY 2012-13. 120 m) and Samtse-Phuentsholing Highway (Nu.922 10.470 8.470 10.000 35.000   64.862 120.000 210. The construction of Nangar-Ura Road (Nu.000 117.870 Construction of bridges on Gyalpoizhing–Nganglam Highway NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 49 . in millions Funding RGoB/ADB RGoB/ADB RGoB GoI GoI GoI RGoB RGoB/ADB RGoB RGoB/Netherlands GoI RGoB/ADB RGoB GoI RGoB GoI GoI GoI Construction of Gomphu-Panbang Highway Realignment of road from Hiley check post to Sarpang town Construction of Samtse-Phuntsholing Highway Construction of Secondary National Highways Construction of Panbang-Nganglam RNP-II Construction of Damji-Gasa Road Construction of Gesarling-Lhamoidzingkha Road (ORIO) Construction of Tingtibi-Praling Road Construction of Dzongkhag Roads 2 3 Construction of Tsebar-Mikuri-Durungri Road Construction of Refey-Khosala Bypass Road Construction of Halhalay-Dorokha Road Construction of Sangpori bridge Construction of Sokporong bridge Construction of Bongri/Matsheri bridge Construction of Samdubchheoling-Samrang Road 79.

000 130. 1. housing and public amenities Urban Development With the urban areas experiencing growing population primarily due to migration from the rural areas.000 90.000 8.780 138.045 102. the Government started projects to upgrade the basic amenities include housing. Works are also 50 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . The Thromdeys’ budgets are included under this sector.580 7.000 144.400 2. schools.097 m is allocated.6 Urban development.000 10. The outlay for this sector includes the various capital works in Thimphu City such as on-going infrastructure development under Local Area Plan Project (LAP) in Semtokha.4.000 50. Dechhenchheoling.Nu.800 3. For the FY. Chang Bangdu and Langjophakha which has a total allocation of Nu. in millions Sl. 425. Babesa.731.000 90.000 Funding GoI GoI GoI GoI GoI GoI GoI GoI GoI RGoB RGoB RGoB/GoI RGoB RGoB Construction of bridges on Gomphu .160 1. Activity Construction of Desumvey bridge Construction of bailey bridge over Gongri Construction of Zimzorong bridge Construction of Khakhari bridge Construction of Sumari bridge 7 Construction of Nishoka Bridge (1500 ft span) Construction of Mangdechhu Bridgde Construction of Redigang Bridge Construction of Pantang Bridge 8 9 10 12 11 Construction of Amochhu Bridge on SamtsePhuntsholing Highway Construction of Meragamari bridge on Kharungla-Kangpara road Improvement works on roads Resurfacing of roads Monsoon restoration works on roads Amount 1.Panbang Highway 4. hospitals. No. children’s parks etc.400 m. water supply and sanitation. roads. a budget of Nu.

19. Table 4.196 m) and water supply pipelines (Nu. No.480 55. 27.004 44.14: Major Capital Works under Urban Development.034 m). Housing In order to solve the housing shortages for the low-income public servants. 250 m to NHDC.000 30. Housing and Public Amenities Sector Nu. water treatment plant (Nu. a budget of Nu. 1 2 3 4 5 6 7 8 9 10 11 Activity Urban Infrastructure Development of Semtokha LAP Chang Bangdu LAP-Package I Water supply intake. in millions Sl.264 27. In the FY 2012-13.480 120. 55.034 121. ADB financing has been secured for augmenting the sewerage treatment plant in Thimphu with state of the art technology. Some of the major capital activities are highlighted in Table 4.196 38. the National Housing Development Corporation (NHDC) has started construction of housing complexes in various Dzongkhags. In addition to the above.574 19.346 95. the Government has approved an interest-free loan of Nu.264 m) in Thimphu city to provide adequate water supply. 17.000 Funding RGoB/ADB RGoB/ADB RGoB/ADB RGoB/ADB RGoB/ADB RGoB/ADB RGoB/ADB RGoB/ADB World Bank World Bank World Bank NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 51 . main transmission lines Construction of water reservoirs Babesa LAP Construction of water treatment plant Urban Infrastructure Development Project (Phuentsholing Thromdey) Urban Infrastructure Development Project (Dagana town) Dechhenchheoling LAP-Package I Dechhenchheoling LAP-Package II Langjophakha LAP-Package III Amount 38. In this regard.000 20.14.going on to construct reservoir (Nu.5 m is allocated to NHDC as interest subsidy.

427 m is allocated. In the new FY.000 Funding RGoB RGoB RGoB 4. Under the ABSD initiative to give equal opportunity to stake-holders in the IT sector. ICT laboratories are established in 168 schools. Under the Chiphen Rigphel Project. a budget of Nu. 146 m is kept under GoI funding for the implementation of Broadband Master Plan. ICT To improve internet connectivity. a budget of Nu. Currently. 52 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . Civil Aviation Enhancing air transport connectivity has become very critical for economic development and in facilitating the movement of tourists in the country. connectivity and efficient service delivery.041 m is provided for laying optical ground wire and cables as part of National Fibre Optic Network. 8. a budget of Nu. 1.Nu.7 Communications and transport In order to promote Bhutan as an ICT destination in the region and to achieve the target of tourist arrival of 100.738.4. 160. Further.000 10.000 8. 100 Community Information Centres (CIC) have been established so far which has enhanced IT literacy. No.000 by 2013. 12 13 14 Activity Digital dataset for Paro Valley Development Plan Bumthang Valley Development Plan Development Plan for Samdrup Jongkhar Amount 8. 409. investment in this sector is high. In addition. in millions Sl. Nu.912 m is allocated for establishing ICT laboratories in schools and CICs across the country. a budget of Nu.500 m is kept for subsidy to entities providing data centre services and business process services.

14. an eco-friendly mass public transport system for Thimphu City and Phuentsholing City is being designed with the help of the IFC and the system is to be based on Public Private Partnership model.600 m) and construction of security quarters (Nu 91 m).1 m is provided to Bhutan Post for operating the city bus services. In addition. financing options are being considered for the procurement of a new aircraft for Druk Air. In the mean time. For the non-profitable routes. domestic airports have been developed in Yonphula. a bus terminal NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 53 . 101. Bumthang and Gelegphu. A grant of USD 6. Bus Transport Service With the increase in number of vehicles causing traffic congestion and pollution. Gelegphu airport is at an advanced stage of construction.92 m has been secured from the ADB to complete the development of Gelegphu airport and upgrade facilities in Yonphula and Bumthang airports. a budget has been provided for terminal building expansion (Nu. For Paro Airport. 134 m (Universal Service Fund) is allocated in the FY for Rural Telecommunication Project.Accordingly. To further expand the coverage in remote villages. bus operators are supported by way of interest subsidy on loans availed for purchase of buses. a budget of Nu. Telecommunications The telecommunications services have taken a step ahead with the achievement of 100% mobile network connectivity in all the Gewog centres. Towards this. the fleet of buses will increase to 33 from 19. For the FY 2012-13. private sectors are also participating in the provision of urban transport service. the need for upgrading the existing bus service of Thimphu city has become a priority. a sum of Nu. To facilitate easy transit for commuters. Public bus transport services in Dzongkhags are operated by private operators for which tax and duty exemptions are provided to ensure that fares are maintained at affordable rates. In addition. While Yonphula and Bumthang are operational.

585 Funding RGoB GoI GoI RGoB GoI GoI RGoB RGoB RGoB RGoB GoI RGoB RGoB RGoB GoI SDF SDF 4. DIT Construction of retaining wall at IT Park Implementation of broadband master plan Telecom subsidy (ABSD) Depreciation and O&M for National Fibre Optic Network Compensation for Nationalization of Fibre Optic Chiphen Rigphel Project (Total Solution) Empowering rural communities-reaching the unreached Establishment of community centers in gewogs in various Dzongkhags Amount 3.000 8. industry and private sector development The budgetary support to this sector is mainly for the government agencies that are responsible for creating enabling environment for private sector participation in the economic development of the country.600 5.5 m is kept.500 55.687 409.8 Trade.400 3.481 34.460 12.000 4.000 39. RSTA Construction of bus terminal at Tashigang Support to CC vendors on operation cost difference.970 91.construction in Tashigang will be completed during the FY for which a budget of Nu.500 7. Table 4.4. 7. No.15.912 3. The major capital activities of this sector are shown in Table 4. The key activities 54 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .15: Major capital works in Communication and Transport Sector Nu.075 146.400 7.000 101. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Activity Construction of additional water supply pipe line for Paro airport Construction of security quarters at Paro airport Expansion of Paro airport terminal building Calibration of distance measuring equipments Purchase and installation of DVOR (Doppler VHF OmniDirectional Radio) for Paro airport Construction of fire station at Paro airport Awareness campaign on road safety. in millions Sl.354 104.

695 1.287 6.950 m) and Construction of Solid Waste Disposal Site at Pasakha industrial estate (Nu.250 Funding RGoB RGoB/GoI RGoB RGoB/ADB RGoB GoI RGoB UNDP 4. Hydromet Bondeyma Industrial Estate master-plan designing Micro. Nu. Hydromet Procurement of plant and equipment for Flood Warning Stations.8 m).800 10. To diversify products and improve NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 55 . DCSI Construction of annex office building. DGM Construction of solid waste disposal site at PIE. It is projected that more than 100. 17. DCSI MSME Development Policy and Support of CSF management. Table 4. The major capital activities under this sector are presented in the Table 4. Small and Medium Enterprises Amount 9.16. 17.4.319 m is kept as a budgetary support for the promotion of indigenous crafts (APIC) established under the ABSD initiatives. 1 2 3 4 5 6 7 8 Activity Construction of regional office at Samtse.16: Major capital activities in trade and industry sector. Other major activities include the preparation of master plan for Bongdeyma Industrial Estate in Mongar (Nu.360 m is allocated.000 tourists will arrive during FY 2012-13. DoI Subsidy to APIC. No.360 6.064 17. A total of Nu.during the FY include the development of industrial estates and hydro-power projects besides promoting exports and import substitution. For the development of micro. 1. 44. a budget of Nu. small and medium enterprises (MSME).9 Tourism sector Tourism sector is one of the main sources of convertible currency besides generating employment and revenue.300 44. in millions Sl.950 2.

1 2 3 4 5 6 7 Activity Development of wildlife tours (Manas) Development of tourism in the Dzongkhags Development of road-side amenities Travel fairs/road shows Public Relations Representation Supervision & monitoring of construction of Royal Institute & Training hotel.343 m. trails.750 m is made available.4. 15. The capital works in the sector are highlighted in Table 4. No.000 5.10 Energy A total of Nu.343 Funding RGoB RGoB RGoB RGoB RGoB Austria RGoB/ACB 4. As of now. campsites.000 41. a budget of Nu. Rural Electrification (RE) To achieve the target of “electricity for all” by the year 2013.000 10. a budget of Nu.000 4. To promote our products in international markets.296 m is allotted. the Government has given utmost priority to the rural electrification program. 10 m is kept for travel fairs and road shows. The construction of HTMTI training hotel will be completed during the FY with a budget of Nu.046 5.000 13. in millions Sl. For improving the quality of services in the hospitality industry through training at the Royal Institute for Tourism and Hospitality (RITH). road side amenities.970 m is allocated to this sector in FY 2012-13. a budget of Nu. etc. 733.17: Capital works in Tourism Sector Nu. Table 4.public amenities such as wildlife tours. RITH Construction of HTMTI training hotel Amount 2.17. a budget provision of Nu. 5 m is kept. For the development of tourism-related activities in Dzongkhags. 41. 56 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . trek routes. 54.

and Nu. To carry out Detailed Project Reports (DPR) for . various measures are put in place. Sunkosh (2.335 m has been kept for on-grid electrification and Nu. Electricity Production The hydro-power development policy to achieve 10. the possibility of energy generation by wind is being piloted under an ADB project for which Nu. Dagachhu and Mangdechhu projects are at various stages of construction. In addition. Chamkharchhu (770 MW) and Khomachhu. For the remaining 17. Works are continuing for the installation of GLOF early-warning system in Punakha – W/Phodrang valley for which Nu.427 households.18. With this budget. 1. 1. 252. 14. 4. 1. In order to prevent natural disaster like flooding due to glacial lake outburst.71. The Punatsangchhu-I. use of biogas is promoted in the villages.197 m is kept. a budget of Nu.215 households have been connected through on-grid and off-grid means.695 m under GoI funding is also kept for procurement of plants and equipments for flood warning stations. a budget of Nu. Nu.Kholongchhu ( 600 MW). As an alternate source of energy. Wangchhu (600 MW). The major activities under this sector are highlighted in the Table 4.204. one of the major socio-economic development targets of the government will be achieved.508 m for connecting through solar energy during the FY.000 MW by 2020 is being vigorously pursued. Punatsangchhu-II.541 m is kept. Works are undertaken to set up micro-hydels at locations (Lingzhi and Soe) where there is no likelihood of reaching national grid for which a budget of Nu.287 m is set aside for the construction of office building for Hydro-meteorology office. Kuri-Gongri (under PFR. 6.834 m is allocated in the FY. There will be “electricity for all” by June 2013. Bunakha (180 MW).299 m is kept.560 MW). 6. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 57 .800 MW). 40. Amochhu (540 MW).

497 22.695 4.179 17.273 100. No.603 11.172 Funding AUSTRIAN RGoB/GoI RGoB/GoI RGoB/GoI RGoB/GoI RGoB/GoI RGoB/GoI RGoB/GoI RGoB/NORAD NORAD NORAD RGoB GoI PHPA RGoB ACB RGoB RGoB RGoB RGoB RGoB/ADB Austria Austria 58 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . Phobjikha (Phase VI) Rural electrification under ADB project (Phase V) Rural electrification under ARE project (ACO-LAYA) Rural electrification under JICA (JBIC) project (phase II) Pilot Wind Project Operation and maintenance of Solar PV systems under ADB/JFPR funding Development of Micro Hydropower Plant in Lingzhi Development of Micro Hydropower Plant in Soe Amount 53. in millions Sl.000 1.508 23.920 24.920 70.18: Major Activities in Energy Sector Nu.299 70.813 29.292 28. Hydromet Procurement of plants and equipment for Flood Warning Stations. Hydromet Installation of GLOF Early-Warning System in the Punakha-W/Phodang valley Rural electrification under JICA (JBIC) project (Phase I) Rural electrification under GoA project.000 10.908 13.292 24. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Activity Construction of Dagachhu Hydro-electric Project DPR of 770 MW Chamkharchhu .000 6.560 MW) Sunkosh HP PFR/DPR preparation of Kuri-Gongri (1.680 55.123 26.800 MW) HP DPR preparation for (540 MW) Amochhu HP DPR preparation for (600 MW) Wangchhu HP DPR preparation for (180 MW) Bunakha HP Institutional Co-operation Project with Norway-Phase IV Prefeasibility studies of three Hydropower Projects DPR study of Khomachhu HP Construction of annex office building.541 14.287 6.Table 4.I ( Digala ) Hydroelectric Project DPR preparation for 600 MW Kholongchhu HP DPR updation of (2.291 25.000 15.

budget for construction and renovation of Lhakhangs are provided in the budget of Dzongkhags.000 5. Zhirim Lobda at Phochhu Dumra (Nu. Lhuentse Dzong (Nu. in millions Sl. Thimphu Construction of Dashag at Gomkora.19: Major Capital Works under Cultural Services Sector Nu. a total of Nu.19. Thimphu Renovation of Tango Utsey.000 16.000 10. 10 m). CRA 20. 1 2 3 4 5 6 7 8 10 12 13 14 15 16 11 9 Reconstruction of Lhakhang Karpo. and the renovations of W/Phodrang Dzong (Nu. Mongar Procurement of religious items. construction of nunnery center at Kilikhar (Nu. Paro Construction of Dashag at Talo Sheda. The major works include Construction of Pema Gatshel Dzong (Nu.356 m) under GoI and RGoB funding.000 4. Punakha Construction of Zhirim Lobda at Gyalpoizhing. 20 m).000 Funding RGoB RGoB RGoB RGoB RGoB RGoB GoI RGoB RGoB GoI GoI GoI RGoB RGoB RGoB GoI Construction of approach road to Kila Goenpa.573 m) and Daga Tashi Yangtse Dzong (Nu. In addition.229. Ha Activity Amount 20. 16 m) and Hindu temple in Thimphu (Nu.000 20.000 50.502 m is allocated in FY 2012-13. Tashi Yangste Expansion of Tango Buddhist College 10. 1. 26. Table 4.000 8. 10. 50 m).000 7.500 Construction of nunnery centre at Kilikhar. 26. expansion of Tango Buddhist College (Nu.000 11. The major capital works under this sector are given in Table 4. Punakha Construction of Shabkor at Kurjey Lhakhang.000 10.000 6. No.4. Pema Gatshel Construction of crematorium at Hongtsho and Pungshi.10 m) will be carried out. Pema Gatshel Reconstruction of Yongla Goenpa. Bumthang Construction of Kuenrey at Datshang. Mongar Construction of Zhirim Lobda at Phochu Dumra.500 Construction of Dechkog Ku at Semtokha NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 59 . CRA Procurement of Zungs. During the FY. 30. Paro Rinpung Dzong (Nu.539 m).000 18.4.11 Cultural services Towards the conservation and promotion of our religious and cultural traditions.000 10.576 m). 18 m) and Gyalpoizhing (Nu.

525 m is kept.20 Table 4.000 10. No. mainly for completing the on-going constructions. 9.12 Law and order This sector comprises of the Judiciary and the Police Services for which a budget of Nu.Nu.552 m is allocated during the FY 2012-13. 17 18 19 20 21 Activity Construction of dining hall for Punakha Dzong Construction of Dechhog Ku in Dukhang Renovation of W/Phodrang Dzong Renovation of Paro Rinpung Dzong Construction of Lungta Phodang at Dechhenchheoling Amount 7.356 RGOB/GoI GoI 10. Police For the RBP.000 40.000 12. in millions Sl. No 2 1 HRD-Training Activity Amount 9.000 Funding RGoB RGoB RGOB/GoI RGoB 22 23 24 25 26 Renovation of Daga Tashi Yangtse Dzong Construction of Pema Gatshel Dzong Renovation of Lhuentse Dzong 26.400 m).573 10.283. 18. in millions Sl.4.980 6.539 26.600 3.20: Major Activities under RBP Nu. The list of major activities under RBP is presented in Table 4.000 10.400 Funding RGoB RGoB 8 7 6 5 3 Construction of family quarters at Chamgang central jail Construction of officer quarters at Chamgang central jail Construction of semi-permanent family quarters at Gasa Construction of lock up/detention and fencing at Paro Construction of officers’ quarters at Thimphu Procurement of telecommunications equipment.800 30.576 5.500 RGoB RGoB RGoB RGoB RGoB 60 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . 108. a capital budget of Nu. 3. Thimphu 4. representing 9% of the total outlay. Other major activities include HRD training of police personnel (Nu.000 4.000 5.000 RGOB/GoI RGOB/GoI RGoB GoI Construction of National Conservation Laboratory Construction of Hindu temple.

a budget of Nu.800 m is kept during the FY. 20 m) Land Resurvey For the FY 2012-13. With this. Local Governance For efficient and effective functioning of the local governments. 110 services from all the government agencies including Dzongkhags will be made available online. As of date. 30 m) and construction of RRCO regional office at Gelephu (Nu.13 General public service This sector includes the functions of agencies like the Local Government. a budget of Nu. National Land Commission Secretariat (NLCS). Local Government Support Program (LGSP) in MHCA (Nu.368 m is provided to complete the ongoing National Cadastral Re-survey Project (NCRP) in three Dzongkhags (Tsirang. permanent office will be provided as and when feasible. GNHC. 9. a budget of Nu.4. Other notable provisions in this sector are the RGoB’s contribution to SDF (Nu. thus achieving the target of facilitating the improvement of service at the lowest level of governance. 192 Gewog offices have been provided proper office building. NEC and others. 4. Samdrup Jongkhar and Dagana) and two remaining Dzongkhags (Zhemgang and Sarpang). Administration and Finance. Foreign Services. 156 m). During the FY. 17. all the Gewog centers will have proper office. 197. Audit. 19.660 m). NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 61 . To complete this important initiative.050 m is provided for the construction and re-constructions of 12 Gewog offices. Public Service Delivery System To enhance the public service delivery under the Government to Citizen (G2C) project. construction of the Office of Attorney General (Nu. the surveys of 15 Dzongkhags have been completed. For Nichula Gewog.Judiciary The budget for Judiciary is presented separately in the later part of this chapter.

000 30.000 6. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Activity Construction of border check post & maintenance of border security wall.210 9. budgeting and accounting system. MoF HRD Training. MHCA Construction of Regional Immigration Office. MoF Construction of Regional Office at RRCO. Table 4. Major capital activities under this sector are given in the Table 4. DNP. Bebji (83 households) under Sombeykha Gewog in Haa and in Ney under Gangzur Gewog in Lhuentse. MoF Professional Services (AASBB).21. Samtse Advocacy & sensitization workshop on LDPM. MoF Construction of labour shed.000 Funding RGoB GOI RGoB RGoB JSP DANIDA RGoB RGoB RGoB RGoB RGoB RGoB GOI DANIDA Netherland 62 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . MHCA Contribution to SDF. No.500 20.G2C.000 3. MHCA Local Government Support Program. 6. Gelephu Installation of heating and cooling system in National Assembly Hall.21: Major Capital Activities under General Public Services Nu. 10 m). DRC. MHCA Online system development of 110 services . ECP mainstreaming guidelines & ECP strategies.000 10.660 156. MoF Construction of office of the Attorney General Integration of Planning Budgeting Accounting system under TSP (PFU GNHC) HRD for GNHC Amount 7.800 10. Other major activities under General Public Services are the installation of heating and cooling system in National Assembly hall. a budget of Nu.1 m) and integration of planning.For the National Rehabilitation Program. DNP. This will be used for continuing the rehabilitation works in Zobel Gewog (44 households) in Pema Gatshel.000 8.000 3. GNHC (Nu.000 3.000 17. DNP (Nu.100 12. 38. DPA.675 m is kept. MHCA Integration of biometric feature into existing system.993 14. in millions Sl.

1 2 3 4 5 6 7 8 9 10 11 Activity New Appointments / Establishment General Government hospitality Retirement Benefits Third-country Travel Ad-hoc & Spillover works Monsoon damages Amount 160. 1.000 500. 150. Table 4.000 20. transfer grants.22: Details of General Reserves Nu.000 150. No. NEC Rehabilitation Project.Nu. etc. 16 17 18 19 20 Activity Support to Developing Research Capacity under TSP (RED GNHC) Joint Support Program.22. NLC Amount 5. GNHC Build capacity of PPD officials.910 Funding DANIDA UNEP UNDP/ GEF RGoB RGoB General Reserves A total of Nu. To be provided to agencies once the acquisitions formalities are completed. 500 m for the Parliamentary Elections in 2013.000 205.000 25. NLC National Cadastral Re-survey Program.00 m is kept under General Reserve during the FY.258 3.000 150.000 300. in millions Sl. Acquisition of immovable properties His Majesty’s Relief Fund Disaster Relief Fund General Elections NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 63 .000 255.945.308 39.200 31. sectors and LG officials on ECPM by Environment Mainstreaming Reference Group.000 Remarks To be provided on actual appointments made over and above the provisions existing in the agencies’ respective budgets.300 5. For RLIS. Reimbursement based on actual expenditure Provisions for voluntary resignations To be provided to agencies based on the actual requirement. No.000 30. The details of the General Reserves are shown in Table 4. This will be provided to agencies based on actual requirements. This includes Nu. in millions Sl.000 To be provided to ECB on actual basis.

116.024 m for purchase of new vehicles for National Council Services which was not recommended.071 Recommended 114.4. Nu. 1. The capital budget includes Nu. The current expenditure budget includes the retirement benefits (Nu. 126.5. 0. 64 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .000 m).011 m. adequate budget provisions were made to the constitutional bodies.140 Nu. The summary is shown below: National Assembly Current Proposed 124.500 m for replacement of Secretary General’s vehicle and Nu. 3. 1.5.5 Budget for Legislative.030 m is recommended against the proposed budget of Nu. The proposed amount includes a budget of Nu.262 m is recommended for the National Assembly against the proposed amount of Nu. The budget provisions are recommended as per the agreement reached with the constitutional bodies based on affordability. 5.800 m for the maintenance of security system in the Parliament building.1 National Assembly (NA) A budget of Nu.800 m) and Nu.128 165.199 41.637 m) of the Hon’ble members. The proposals of these bodies and the recommendation of the government are submitted as in Annexure I.2 National Council (NC) A budget of Nu. 165. 2. 4.262 12. A total of Nu. Judiciary and Constitutional bodies As mandated by the Constitution. 22. the joining benefits have not been recommended as it will take place in FY 2013-14. However.680 m for PAC Secretariat.122 126.618 m is kept for the retirement benefits of the Hon’ble members. It also includes the budget for Parliamentary Exchange Programme (Nu. 15. in millions Total Capital 4.2. 77.340 m for purchase of fire protection equipment and purchase of equipment (Nu.199 m.

698 m. The capital budget includes Nu. in millions Recommended 74.199 50.0. 12 m for HRD. The summary is shown below: Anti-Corruption Commission Proposed Current Capital Total 34. Nu. This budget will be made available to ECB as and when required. in millions Recommended 33.3 Anti-Corruption Commission The major capital budget is for the institutional development funded by SDC (Nu.897 Nu. 500 m has been reserved against the EC’s proposal of Nu. 2. The current expenditure budget includes Nu.030 4.154 54.4 Election Commission (EC) For the Parliamentary elections in 2013. 683.563 4.850 77.5.011 Nu. a total budget of Nu. 65 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . 49.835 32.945 m for Electoral Roll Exercise.264 m) which includes Nu.364 83.743 88.200 m for the Training on Postal Ballot and Nu.176 116.590 m for Voter’s Education and Training.5.664 m for the purchase of surveillance equipment and Nu. 1.790 m for the purchase of colour printer to print the VPICs.The summary is shown below: National Council Proposed Current Capital Total 83. 27.180 2. 2.

5.250 66 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .883 4. 40.184 457.The summary is given below: Election Commission Proposed Current Capital Total 639.003 6.250 m was recommended against the proposed budget of Nu.943 m for the Judiciary.5 Judiciary An amount of Nu. Pema Gatshel and Lhuntse (Nu. 5 m for the Project. in millions Recommended 192. Trongsa.622 m is allocated to the Bhutan National Legal Institute. Court buildings and procurement of vehicles have not been included in the new year’s budget due to the resource limitations. The summary is shown below: Judiciary Proposed Current Capital Total 211. 772.854 m). The budget also includes the provision of Nu. 457.223 561. 150 m) and of the Dzongkhag Court buildings at Bumthang.990 Nu.943 Nu.880 38. The proposal for the construction of Drangpons’ residences.761 129. 5. including consultancy fee of Nu. in millions Recommended 32. 66. A budget of Nu.926 m is kept for the establishment of Royal Institute of Law.720 772. The budget covers the on-going constructions of the Supreme Court (Nu.229 768.240 m for various HRD and other trainings including exchange programs funded by SDC and the Government of Austria. A sum of Nu.066 265. 6.

4.775 63.7 Royal Civil Service Commission The current expenditure budget of RCSC includes Nu.931 m for the Bhutan Civil Service Examinations. a sum of Nu.5. 58 m is allocated. 2.410 61. 60 m funded by the Government of the Netherlands. The summary is given below: Royal Civil Service Commission Proposed Current Capital Total 32. post-graduate scholarships under GoI funding of Nu.558 Nu.777 m is set aside for the capacity building of RAA under joint-funding from RGoB and UNDP.457 171.6 Royal Audit Authority (RAA) The major component in the capital budget of the RAA is the construction of Training Centre at Tsirang for which a budget of Nu.588 162.970 195.330 m and Nehru – Wangchuck Scholarship of Nu.232 Nu.5. in millions Recommended 31.737 4. 74.342 188.701 156.327 164. The capital budget includes HRD budget of Nu. 1. Further. 20. in millions Recommended 103.690 m.043 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 67 . The summary is given below: Royal Audit Authority Proposed Current Capital Total 107.

it is estimated that there would be a net inflow into the foreign exchange reserves by approximately USD 52.985 m.4. 68 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .6 Foreign Currency Implications on Account of Government Budgetary Operations With respect to the proposed budget’s implication on the foreign exchange reserves.

it is being submitted separately as a Tax Bill. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 69 . I will submit it after the completion of the Budget presentation.CHAPTER V: TAX MEASURES As regards the tax measures.

and the fiscal and debt projections by the Ministry of Finance. the projections of the Balance of payments and Reserves including Trade are made by the RMA. The construction sector’s growth is projected to rise by over 34 % as the construction activities of the on-going HP projects will peak. This is expected to be driven by the electricity sector. works are likely to start on six new HP projects namely Kholongchhu.3% as a result of low rainfall in the last monsoon season.1 Economic Growth GDP growth in the FY ending this month is estimated to be 7. 70 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . the GDP projections are made by the National Statistics Bureau. which declined by over 5. Amochhu. (which accounts for almost 20% of GDP). which is multi-sectoral. Bunakha and Wangchhu. The electricity sector’s projections are made by the Department of Hydro-power and Power Systems.9 % in the FY.CHAPTER VI: MACRO-ECONOMIC OUTLOOK IN THE MEDIUM TERM In considering the macro-economic implications of the budget and the outlook for the economy in the medium term. Sunkosh.53 % largely due to the commissioning of the Dungam Cement project. the economy is projected to grow by 12. 6. which is projected to grow by 9. This can be attributed mainly to the electricity sector. the various projections made by the different agencies are synchronised and compiled into one whole by the Macro-economic Framework Co-ordination Committee (MFCC). Chamkharchhu I.6 %. with the completion of the Dagachhu HP project. which is lower by 0.7 percentage points as compared to the FY 2010-11.5 %. The manufacturing sector is expected to grow by 12. During the FY. For the FY 2012-13. Grant Assistance estimates by the GNHC Secretariat.

0 7.9 11.1 15.2 37.2 7.6 14.7 15.2 -3.3 1.8 20.5 2.9 34.7 1.7 19.3 25. 2013/14 Proj.0 44.1 11. 2014/15 Proj.4 35.1 11.Gross Domestic Products-Key Sectors 2007/08 Actual Growth Rate (%) Real GDP at 2000 Prices Agriculture Industry Electricity Construction Services Sectoral Share to GDP (%) Agriculture Industry Electricity Construction Services 2008/09 Actual 2009/10 Actual 2010/11 Prov.1 16.71% which is close to 9% target set in the beginning of the 10th FYP.0 46.5 1.2 12. 2011/12 Proj.8 0.1 21.8 2.3 20. 10.0 11.0 37.9 11.8 16.9 -5.1 10.4 9.6 2.0 36.7 5.7 9.5 8. 2012/13 Proj.3 3.7 9.3 9.0 7.4 9.7 12.0 11.3 16.3 4.3 2.4 36.8 9.2 38.0 23.8 9.0 18.3 36.0 13.9 23.0 43. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 71 .9 49.4 38.3 16.3 5.2 48.4 22.6 8.2 38.7 15.2 44.3 43.7 10.8 45.5 19.3 18.2 19.3 9.3 12.6 16.0 16.8 Source: National Statistics Bureau In respect to the five years of 10th FYP.2 18.6 2. this would mean an average GDP growth rate of around 8.8 -2.7 4.4 1.4 13.3 12.6 22.

High inflation in India means higher costs for most of Bhutan’s essential imports. The contributing sectors are again the electricity and more so the construction sector which is projected to grow at over 19 % mainly due to the commencement of the Kuri-Gongri HP project. and the consequent pressure on the Indian Rupee reserves. This is expected to be contributed again by the electricity sector which is projected to grow at 11. the economy is projected to grow by over 9%. 72 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .6 %. the same trend is anticipated.33 % by the end of FY 201011. In the FY 2014-15.2 Inflation The economy witnessed a high inflation of 8. In the medium term too. The other contributing sector is the construction sector which is estimated to grow by over 25% mainly due to the commencement of Nikachhu HP project. the domestic price fluctuation was almost in tandem with price movements in India.3 % as the Dagachhu’s production will largely occur in the second half of 2013.The growth projection for the FY 2013-14 is 11. 6. With import of more than 75% of commodities from India.

especially vegetables.121.990 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 73 .118 2012/13 Budget 31.1% in 2011 shows a positive trend.1: Fiscal Projections Financial Years    Total Resources Domestic Revenue Tax Revenue Non-tax revenue Grants Project-tied Grants 2010/11 Actual 28.446.932.551 2013/14 Projection 27.042 21.593.381 5.981 19.537 13.865.467 14. the provision of vehicular roads.858 11. start of nursing course. 6.3% in 2010 to 3. and the implementation of many hydro-power projects will ensure these positive developments.026. The target of achieving 100.727 8.516 Nu.157.171.804 6.716.037 16.875. Numerous initiatives undertaken to generate employment and providing the necessary skills to the youth such as up-scaling of the VTIs.442 21.615. Table 6. communications facilities and electricity to almost all the villages will help engage more of our people in agriculture.759 13.486 5.691.985.601.458.076 10.031 23.154. as import substitution will facilitate more employment. Moreover.797 11.336. and providing enabling environment to small scale and cottage industries is also expected to generate employment.760.735.188.149.566 2011/12 Revised 33.663 6.496.135 10.265.3 Employment The decline in the unemployment rate from 3.241 8.903 6.1 below.994 9. The programme for up-scaling domestic production of agricultural commodities.891.282.529.975 4.723. training in hospitality services.497.708. in millions 2014/15 Projection 34.6.311 10.759 17.222 5. and several other development programmes.547 15. the prospect for increasing employment is positive in the medium term.688.000 tourist arrivals a year.4 Fiscal Outlook The fiscal projections for the medium term are as indicated in Table 6. Given all the employment programmes and the surge in economic growth.

433 29.33 -0.863 776.712 -670.64 -4.000 408.190 2.72 -1.000 211.305 32.94 25.969.985 0.674 1.746 2014/15 Projection 5.709 19.991.725 42.65 2013/14 Projection 23.420 175.698 0.110.677 2.985 1.437 -234.33 0.365 -1.832.000 -3.497.400.07 74 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .111 1.54 -2.010 499.794.863 3.388 3.089.375 2.545.400.431 2013/14 Projection 2.578 (As a Percentage of Nominal GDP) Financial Years   Total Resources Outlay Total Expenditure Fiscal Balance Financing Resource gap 2010/11 Actual 36.991 36.197 1.781 0.32 -4.107 -3.015 175.340 20.611.147.518 175.752.92 38.823.511.986.400.429.960 351.740 685.649 4.56 1.689 21.119.670.056.913.075.197 924.808.196.906.832.845.842.000 34.521.218 7.670.706 2011/12 Revised 8.189 -803.192 6.635 2.227.161 1.072.556.802 2.482.56 -0.595.45 27.549 18.689 14.968 3.905 14.615.326 2.000 -2.058 14.80 2011/12 Revised 38.178.59 2012/13 Budget 31.630 16.336.847 -906.27 26.519.78 38.909 13.14 -1.798 1.343.446 3.302 2.141.892.111 0.610.278.879 1.21 3.841 4.302 2.15 32.196.163 1.39 42.740 1.556.635 0.670.376.65 -3.629 2012/13 Budget 6.21 -2.546.472.781 2.722.437 3.042 674.133 -1.443.000 -1.000 215.635 2.752.800 -1.364 37.418 37.104.239 34.816.262.249.71 33.985.721.786.79 -0.344 33.735.029.595.766 3.735.000 3.243.781.18 2.000 3.24 26.000 381.000 675.400.000 31.000 -446.443 0.497.734 2.768 2.400.302 2.381 3.310 0.404 0.409.994.56 2014/15 Projection 24.960 446.802 0.161 215.431 2.725 1.443 1.216 -3.32 4.000 -3.919 -1.672 1.233.515.72 43.443.252.529 17.00 3.486.118 -95.235 29.605 1.674 293.Financial Years    India Others Program Grants India Others Other receipts (Net) Outlay Total Expenditure Current expenditure Capital expenditure Net lending (NL) Advance/Suspense (Net) Fiscal Balance Financing Net Borrowings Borrowings Internal External Repayments Internal External Resource gap 2010/11 Actual 6.117 3.

55 34.971.204.876.51 7.393.362.243.828.4% (three years actual figure & two years projections) as NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 75 .61 *As on March 31st.327.97 99.68 98.195.32 7.692. in millions) Real GDP Growth Rate Inflation (CPI)-FY Average 2010/11 Actual 48.21 11.776.184.47 65.05 67.07 2012/13 Budget 79.619.17 136.75 86.69 94.729.30 4. the internal revenue is projected to grow by an annual average of 11.99 77.16 17.55 111.35 90.901.67 175.57 4.488.38 39.4.23 40.97 701.51 47.83 10.89 525.59 44.168.17 77.25 99.04 36.88 111.1 Domestic Revenue and External Grant Assistance During the 10th FYP.61 7.418.750.456.73 12. ** Debt Service = Interest Payment + Principle (Repayment) 6.240.32 8.16 31.20 62.33 32.78 65.956.14 3.76 40.34 77.95 65.58 2013/14 Projection 113.67 73.30 152.14 87.01 350.090.60 2014/15 Projection 152. 2012.48 876.65 4.40 5.595.41 102.343.60 112.45 76.742.66 56.276.976.81 4.867.54 4.91 79.66 4.03 10.08 99.81 38.74 98.56 44.284.69 7.49 72.19 63.39 8.21 56.63 10.31 10.Financial Years    2010/11 Actual 2011/12 Revised 2012/13 Budget 2013/14 Projection 2014/15 Projection Memorandum Items: Financial Years Total Debt % of GDP Domestic Debt External Debt % of total Debt % of GDP % (y-o-y) change Of which hydropower debt % of external debt % of GDP Exports (GNFS) Total Debt Service* o/w external debt service Debt Service Ratio** Nominal GDP (Nu.35 81.610.57 95.55 2011/12 Revised 57.553.62 9.74 48.09 3.461.23 11.20 57.43 123.90 4.09 119.71 42.42 9.99 33.575.782.

It is also projected that internal revenue will cover all recurrent expenditures during this period.43 % in comparison with the FY 2012-13. revenue is not expected to grow (0.17%) in FY 2013/14 due to projection of one import year’s excise duty refund from the GoI as compared to two import years’ refund in previous years. 34. it is expected to grow at a high rate of over 10. however. This is as per the trend in the first year of a Plan due to time taken in mobilising resources and in preparatory works. The hydro-power projects are projected to contribute 25% of the total revenue in the plan period.15% primarily due to the commissioning of the Dungsum Cement project and the Dagachhu HP project. as it is the first year of 11th FYP. the projections are based on past trend. The total expenditure for the FY 2013-14 is projected to be lower by 4. 6.9% in nominal terms from the revised budget of FY 2011-12. in the FY 2012-13. mainly on account of increasing current expenditure arising largely out of the maintenance of the new infrastructure developed during the 10th Plan. the total expenditure is estimated at Nu. In the subsequent year. Total expenditure in the subsequent year is projected to increase by 10.79%. In terms of grant aid. For the projection period. which is lower by 8.691. The current expenditure may increase slightly mainly on account of expenses for the national elections scheduled for 2013. 10.compared to the 6% growth target set in the start of the Plan period.549 m.515.2 Expenditure As presented earlier. it is estimated at Nu. For the two outer years. 76 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .4.241 m for the FY 2012-13 as per the commitments of the development partners.

167 m in 2013-14 and Nu. It would constitute 27. 123. In the two outer fiscal years.782. It constitutes 72. In the medium term. In the medium term.750.3% and 1.4.350 m in 2014-15. 21. with 10 projects on-going.6. 87. Some amount is also expected to be disbursed for the Sunkosh and Amochhu projects during the year. 20. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 77 .78 m due to the greater momentum of the activities of the on-going projects namely Punatsangchhu I & II.23% of the estimated GDP.5 (a) (i) Debt Stock and Debt Service External Debt Hydro-power debt: The external debt stock on account of hydro-power projects for the period ending FY 2012-13 is estimated at Nu.66 % of the total external debt and around 56.33% in FY 2014/15.650.9 % of GDP has been estimated for the 10th FYP.803 m in FY 2013-14 and Nu. 28.3 Fiscal Balance The fiscal deficit of 4.3 % of the total external debt.226. 825.15 % of the estimated GDP. 25. The non-hydropower loans are borrowed from multi-lateral development financial institutions at highly concessionary terms.56 % of GDP is estimated in the revised budget of FY 2011-12 and in FY 2012-13 budget respectively. such debts are at a sustainable level. the deficit is expected to drop to 3. and therefore.385. The hydro-power projects loans are self-liquidating as the projects are commercially viable. this is expected to be at Nu.494 m based on the planned disbursements of the on-going and new loans.21% of GDP in FY 2013/14 and 0. 6. hydropower debt is projected to be Nu. or 21. (ii) Non-hydropower debt This external debt is estimated at Nu. On an average.590 m at the end of the FY 201213. The disbursements for the FY is estimated at Nu. Dagachhu and the Mangdechhu. 57. a fiscal deficit of only 0.895 m in FY 2014-15.553.

Debt Indian Rupee Convertible Currency(US$) Hydro-power Debt Debt Service Ratio Non-hydropower Debt Debt Service Ratio Govt.22 2014/15 16.553.080 87.750.209 21.084 48.395 779.6 5.048 44.682 31.18 32.875.302 123.207 612.385.1 3.92 * Revised and projections are as on 31st March 2012 Figure 1: External Debt Stock 78 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .803 21.895 20.15 10.349.782.665 24.590 21.44 2013/14 Projection 152.83 25.494 56.09 18.266.976.56 35.540 513.694 21. (%) Debt Service Ratio Total (%) Total Debt Service as % of GDP % of GDP % of GDP 47.81 28.240.743 29.64 2011/12 2012/13 Budget 79.0 5.74 38.2: External Debt Stock and Debt Indicators Amount in millions 2010/11 Actual External Govt.226.593 705.30 18.17 11.742.472 41.15 10.167 73.909 38.168.3 6.51 12.97 Revised* 56.393.38 21.91 12.44 11.350 90.335.45 12.197 558.04 34.81 10.12 10.Table 6.647.05 Projection 112.245 111.204.650.619.1 4.513 57.800.970 76.575.23 35.

The total debt service for the FY 2012-13 is estimated at 4. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 79 . the RMA has an outstanding credit of Rs. Further. Figure 2: Debt Indicators The total public debt service as a percentage of exports of goods and services for the FY 2012-13 is estimated at about 12.83 % of the estimated GDP. However.500. which is scheduled for repayment during FY 2013-14. Dungsum Cement Project has also availed a loan of Rs. (b) Domestic Debt The only domestic debt remaining in the FY 2012-13 is the one for the purchase of aircraft for Druk Air Corporation. That will be reduced to Nu. the domestic debt stock may increase accordingly. 3 billion availed in 2009 for balance of payments support from the Government of India. 1. Further. It is projected to increase during the FY 2013-14 as presented in Figure 2 above.91 m and gradually be repaid by FY 2015-16.As regards to other external credits. depending on the movement of the Resources Gap. 525.00 m from the Indian market as project loan against its own balance sheet. it also avails overdrafts from Indian banks from time to time for the management of Indian Rupee reserves. This is due to the GoI Standby credit facility availed in 2009.1%.

618. 6.812.7 Service balance Income balance Current account Goods balance (trade balance) (38. (47.431.028.6) (2.3: Overall Balance of Payments Table 6.1 7.494.3 3.643.544. (23.844.620.069.713. The current account deficits are projected to widen in the FY 2012/13 to FY 2014/15.9 16.2) (5.9) 12.789.2) (6.5) (4.4 9.9 580.923.2) 8.368.7 26.8 47.8) (41. (18.6 5.088. They are anticipated due to rapid growth in imports as the period corresponds with the peak period of construction activities of the hydro-power projects. (16.165.2) (31.266.3 55. 2. The projections are summarised in Table 6.105.6 Balance of Payments (BoP) and Foreign Exchange Reserves One of the major challenges in projecting the BoP is in estimating the balance of trade due to various factors. in millions 2014/15 Proj.6) (4.5 2012/13 Proj. but expected to be back in surplus in the subsequent years.652.0 32. with an estimated cost of Nu.9) 9.6) (24. During the period.9) (3.3: Overall Balance of Payments Fiscal Year Particulars 2010/11 Prov.9 21.413.1 580.0 580.7 580. While the RMA attempts to make it as accurately as possible.278.438. due to the lack of correct and timely data. there will be ten HP projects ongoing.994.9) (23.6 16.3) 4.0 743.8 15.0 14. The overall BoP is also projected to be in deficit for FY 2011/12 and FY 2012/13.3 18.1 Capital transfers Current transfers Capital and financial account Foreign direct investment Other investment 80 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .043. Nu.9) (1.016.8 2013/14 Proj.2 billion is financed locally.092.563.587.552. Table 6.it may also increase if the purchase of the new aircraft for Druk Air Corporation.0 38.082.2) (24.370.686.409.7) (8.041.3.788.3) 12.7 2011/12 Proj. there are usually large errors and omissions.1) (5.3) (3.389.664.663.609.443.

5 7. 4 ongoing and 6 new.4)   (0.2 In  percent  of  GDP   19.1) HPPs.1     (0.3% of GDP in FY 2012/13.8 968.8 3.0 2. 10 ongoing and 1 new.7 (3.4) HPPs.8)   (2. With the widening of the trade deficit.5 806.6) (30.4% of GDP at the end of FY 2014/15.9 9.8 39.9     20   10   0   -­‐10   -­‐20   -­‐30   -­‐40   2008/09   Actual   2009/10   Actual   2010/11   Prov. 10 ongoing and 1 new.6) 40.   35.473. 3: Balance of Payment with India 50   40   30   19.6 44.1 51.478.8)   (15.9) (23. In the following year. the trade deficit is projected at 17% of GDP in FY 2011/12 and 13.   (19.6) 782.8 12.3)   (15.   2012/13   Proj. it is projected to further deteriorate to 20.254.7) 2.3)   (17.7) 27.3% of GDP mainly due to an expansion in merchandise imports on account of the construction of hydro-power projects.4)   (5.0) (30.0 26.8 6.4) (7.2 906.3)   2011/12   Proj.7) (28.2) (15.5 1.4% of GDP in FY 2011/12 to about 28.5 49.5 (34.8 (3.5) (27.2 Exchange rate (Nu/USD) In percent of GDP (23.396.Overall balance (In months of Essential Imports)   Current account Trade balance Capital and financial account Overall balance Total reserves (in USD) 4.   HPPs.7 47.1 1.5)   (1.0)   (13.7) (26.7) 17. Figure No.7 52.6 21.3 8.4     8.8 (21.0 (0.9) (24.1) 26.8 7.9)   (20.2 24.0 25. the current account deficit with India is projected also to grow from 14.895.   Trade  balance   Capital  &  Financial  Accunt   Current  account   Overall  balance   NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 81 .   8.   2014/15   Proj.108.9     10.9 Balance of Payments with India: In terms of balance of payments with India.2 37.   2013/14   Proj.5 23.5 5.9 (21.2) (17.2) (31.

of which INR 3 billion was received this month.Under the circumstances. the RMA has controlled the supply of Rupees. they are likely to be 10.51 million in FY 2011-12 and US $ 806.1 % respectively.9 % and 6.63 million in FY 201213. It is estimated that in the FY 2012-13. In the outer two FYs. Those would be adequate to meet 23. the gross international reserves will be US $ 782. demand management and domestic supply enhancement measures have to continue.7 % of the reserves. To manage the present shortfall in Rupees. the Government of India has kindly agreed to enhance the line of credit to INR 10 billion. and is also accessing the SAARC currency swap facility recently announced.7 months of essential imports in FY 2011-12 and 21.5 months of essential imports in the FY 2012-13. In support to the RMA’s initiatives. the likely net usage from the reserves will be about 3. Foreign Exchange Reserves: As per the projections of the RMA. 82 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .

NHDC and Thimphu Tech Park are the new additions to the portfolio of companies with Government shareholdings.2 Financial Overview of SOEs and Linked Enterprises In 2011. BBPL and NRDC coupled with mounting operating expenses.1 Government Portfolio in the SOEs and Linked Companies There are now 27 companies with Government shareholdings. and in 6 companies the Government holds less than 50%.000 employees currently. the combined annual revenue increased by about 5% whereas the overall profit (pre-tax) of state-owned and linked companies decreased by about 2% mainly due to fall in revenue earnings of larger companies like DGPC. They have been the major source of revenue to the Government. 71. the Government’s ownership in companies amounts to Nu.00 million. BFAL. Dungsam Polymers and Thimphu Tech Park are excluded pending finalization of their books of accounts. 4 are majority-owned. PCAL.204. 164.770.36 million in 2007 to Nu. Dungsam Polymers.69 million at the end of 2011. of which 17 are wholly-owned. for reporting purpose. In terms of employment generation. 7. employment generation and wealth creation. DCC.CHAPTER VII: REPORT ON STATE-OWNED ENTERPRISES AND COMPANIES WITH GOVERNMENT SHAREHOLDINGS State Owned Enterprises (SOE) have been the engine of growth and play a strategic role in the socio economic progress of the country. SOEs have been contributing about 44% of the total domestic revenue1 and about 10% of GDP in 2011. SOEs are currently one of the largest providers of employment with more than 10.170. Total asset value of companies with Government shareholdings has grown from Nu. 7. 45. NHDC. However. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 83 . In terms of the total value of equity. Dungsam Cement Corporation (DCC). DHI Infra.

397. 35.44 25.69 million.047.944.274. On average. 37.645.170.60 15% Total Revenue to the Govt.966.36 million in 2007 to Nu.69 64.646. Table 7. Decline in revenues of larger companies like DGPC.129. companies achieved 13% returns on equity as against 15% in 2010.900.93 12. 7. 3.73 7.667.94 7.45 million to Nu.811.757. resulting in lower returns on equity.77 149.1: Overall financial overview Financial Facts: Gross turnover Profit before tax Total net worth Total asset Govt.45 15.96 8.525.50 82. BBPL and 84 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . 164. Consequently.947. Combined annual revenue earnings of companies grew by just over 5% from Nu.632.160.931.’s share of net worth in the companies Net profit 2011 2010 2009 Nu.22 15% 6.44 59.2.23 11.71 million in 2010 to Nu. 15.129.661. 2. in millions 2008 37. total assets of SOEs and linked companies have grown by more than 128% in last five years compared to Nu.520.466.962.37 million.772.70 35.15 13% 10. followed by BoB.594. 71. The growth was mainly attributable to the amalgamation of THP’s asset with DGPC and asset expansion of the financial institutions which grew by more than 89% in the last four years.647.00 million.93 60.077.874.83 million and posted a lower profit-before-tax of Nu. BFAL. the overall dividend from companies also fell from Nu.770.58 163.95 28.00 70.152. In terms of asset growth.000.02 7.90 20.18 6.25 28.1 Earnings & Profitability SOEs and linked companies in 2011 experienced a subdued revenue earnings and profitability.806.72 164. Bhutan Telecom and BPC. Average return on equity DGPC continues to be the highest dividend-paying SOE.63 14% 9.65 56.DGPC which is the largest revenue earner and contributor to the exchequer experienced a fall in revenue earnings on account of lower generation and decrease in energy export.170.047.667.83 15. NRDC.92 64.

DAC. In terms of returns to shareholder funds. 644. AWP. Financial institutions like RICB. 99. etc. Bhutan Telecom achieved higher earnings from its mobile and internet services because of which its annual revenue grew by 17% and pre-tax profit by 27%.057 million.261.PCA have contributed towards lower profitability and returns on shareholder’s fund. advertisements and sale of stationeries helped the revenue of Kuensel Corporation grow by 28%.361 million in 2010 to Nu.119 million. Lower power generation. BNB: Nu. during the year. During the year. RICB: Nu. 205. higher earnings from circulation. approved rate which was much lower than the auction rate it used to earn 85 1 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . On the upside. STCB.087 million and BDB: Nu. During the year. competitions both within and outside the country. BoB and BNB also achieved sharp growth in revenue and profits attributing to strong earnings from their investments.288 million largely due to capacity enhancement (22%) after the induction of new aircraft ATR 42-500 resulting into higher traffic revenue and earnings from cargo and consignments. Similarly. RICB 25% and BoB 23%.470 million mainly because of increase in revenue from the postal services and sale of philatelic items during the local government election and royal wedding in 2011. BoB. AWP posted the highest returns on equity with 38% followed by STCB with 28%. PCA 27%.389 million. regulation of timber prices1. increase in overhead cost due to salary revision and new recruitments. NRDC had to sell at Govt.861 million in 2010 to Nu. were some of the reasons for lower earnings and profitability of the above companies. 111. 2. 1. BDB. AWP achieved 58% increase in sales revenue compared to the previous year on account of higher production and sales which grew by more than 59%. 300. 510. DAC’s revenue grew by 33% from Nu. rising raw materials and O&M costs. BDB. printing. RICB and BNB have posted stronger revenue growth and profitability. Bhutan Post achieved 12% revenue growth (from Nu. Kuensel. They posted record profit during the year with BoB declaring Nu.704.

BPC by 11%.10 million (excluding grants and subsidies) as revenue from its operations but incurred operating expenditure of Nu. increasing raw materials and O&M costs were some of the reasons for lower profitability of these companies.694 million during the year of which Nu. their profitability fell during the year. 36. 256. BBS meanwhile earned Nu. STCB. and STCB’s pre-tax profit diminished by 6%. Pre-tax profit of BAIL decreased by 67%.645 million was from the Royal Government. CDC by 27%. The company received subsidies and grants to the extent of Nu.In case of CDC. 237. BAIL and BPC. despite achieving higher turnover growth. 86 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . 158.992 million. Increase in overhead cost due to salary revision and additional recruitments.

77 450.33 4359.32 1209.53 169.78 110.24 4307.23 1723.2: Turnovers and returns: PBT Var 58% 13% -5% 27% 32% -6% 12% 10.04 60.59 429.97 5.15 1292.895 6.13 86.99 1353.20 13.48 2.82 2.85 30.47 87 AWP BAIL BBPL BBS BDB BFAL Bhutan Post BNB BoB BPC BT CDC DGPC DHI DHI Infra Druk Air FCB Kuensel NRDC PCA RICB STCB WCC TOTAL 28% 20% 5% 17% 46% -7% -2% 33% -2% 23% -9% -5% 47% 36% 4% 5% 729.11 0.93 322.55 2261.70 30.14 1327.19 4805.42 185.30 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 111.75 90.12 1705. in millions 2010 28% 9% 14% 0% 14% 33% 5% SOEs Gross Revenue 2011 2010 749.31 3366.27 1.84 375.75 97% -67% -37% 0% 15% -42% 75.67 400.21 7.21 346.67 31% 257.00 184.76 130.75 9.05 486.50 332.98 3.667.21 354.33 349.84 47.20 48.10 22.25 0.14 8.56 15.04 177.36 647.69 1704.48 249.64 1998.33 1984.65 5.42 16.76 35.04 416.12 217.82 57% -61% -37% -34% 50% 1% 9% 2% 14% 17% 5% 2011 2010 Var 2011 2010 Var 2011 Tax ROE Nu.95 276.08 273.57 1858.45 15% 23% 6% 16% 1% 10% 7% -0.43 370.00 2.83 1584.34 10948.13 1892.Table 7.06 21.15 1833.89 99% 23% -9% 26% 29% -15% -3% 91% -61% 41% -68% -18% 67% 42% 151% -2% 2032.74 4.52 149.70 80.47 15.55 548.00 -0.01 681.93 103.29 382.68 103.96 -0.98 0.23 102% 25% -11% 27% 44% -13% -3% 100% -69% 40% -70% -22% 50% -6% 233% -2% 218.72 1.79 8.70 3545.20 534.80 30.80 138.02 31.00 921.047.49 274.73 14.2% 11% 3% 14% 4% 27% 25% 28% 1% 13% 16% 22% 8% 14% 1% 12% 7% 6% 11% 11% 15% 33% 22% 44% 0.05 37.77 0.76 16% 3.423.40 1757.74 30.966.64 1975.46 6486.47 4702.59 99.15 1467.56 9.29 637.00 361.80 548.96 332.68 45.35 216.15 1563.40 150.44 9.44 11811.11 1.09 56.85 5638.86 475.129.94 2335.46 4468.40 130.49 300.20 59.3% 15% .08 735.39 114.26 225.94 14.28 205.77 198.85 90.19 110.

64.772.93 million in 2010 to Nu.83 million (37. STCB and RICB on account of retained earnings.94 million.661. 70.7. 163.646. 64.69 million in 2011. BoB. DGPC is the largest with total asset worth of Nu.3% of the combined assets of SOEs) and net worth of Nu. BBS.757. BPC. On the whole.51 million.98 million in 2010 to Nu. BNB.72 million. 61.897.2 Assets & net worth The combined net-worth of SOEs has grown by more than 9% from Nu. Among the SOEs. 60.183. 88 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . 164.947. the Royal Government’s ownership in various corporations on net worth basis grew by 7% up from Nu.2. 37.170. The total value of the asset of the companies with Government shareholdings grew from Nu.58 million to Nu. The growth in net-worth was driven mainly by increase in paid-up capital of BNB through rights issue as well as increase in reserves of AWP.

Table 7.3: Financial Positions of companies with Govt. shareholdings
Nu. in millions
2010 291.94 65.15 498.09 114.86 2,486.77 11,751.35 1,294.48 2,279.99 1,603.10 236.27 731.85 429.76 45,254.24 Net Worth 2011 change Assets 2011 change 266.94 36.09 397.12 91.27 1,632.68 4,435.68 1,094.48 1,879.99 1,247.58 96.27 581.85 429.76 985.99 6,934.36 219.29 465.18 100.82 27% -11% 49% 7% 11% 44% 18% 29% 117% 5% 6% -92% 8% 7% 4% 0% 110.87 10% 2,072.45 37,442.65 289.14 495.18 150.82 2010 change Reserves 2011

NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13

SOEs

Govt. Holdg

2010

100% 100% 100% 100% 100% 100% 93.50% 80% 13.61% 47.74% 25.73% 100% 100% 100% 100% 100% 100% 100% 221.93 248.66 12%

511.41 75.07 537.71 194.03 3,467.27 18,180.94 4,242.53 30185.77 26,637.92 302.87 1,605.32 525.81 50,971.28

4,581.81 62,961.97 357.01 627.08

604.27 70.86 769.01 198.58 3,732.40 21,031.24 5,211.32 26,959.60 25,754.38 338.62 1,497.54 696.95 51,133.90 210.90 4,959.87 61,183.83 370.95 589.28

18% -6% 43% 2% 8% 16% 23% -11% -3% 12% -7% 33% 0.3% 8% -3% 4% -6%

340.03 32.19 593.29 97.92 1,816.49 6,380.19 1,294.19 2,426.80 2,708.34 100.76 615.27 34.37 1,062.29 52.80 7,389.22 228.69 463.73

365.03 61.25 724.12 121.51 2,670.57 13,695.86 1,494.19 2,826.80 3,384.18 240.76 765.27 435.76 45,390.41 199.57 2,278.01 37,897.51 297.31 493.73 160.87

25% -6% 45% 6% 7% 17% 15% 24% 111% 2% 5% 1% 0.30% 10% 1% 3% 0% 7%

51%

89

AWP BAIL BBSC B. Post B. Telecom BPC BDB BoBL BNBL BBPL BFAL CDCL DHI DHI Infra Druk Air DGPC FCB NRDC Kuensel Corp STCBL PCA RICBL WCC 915.51 1,743.13 6,960.84 122.95 58% -5% 16% 10% 141.04 798.48 734.42 201.32 749.85 970.52 25.43 43% -6% 32% 201.04 1,138.48 974.42 98.82

51% 44.74% 39.25% 100%

578.68 1,827.23 6,024.02 111.56

261.32 1,089.85 1,210.52 98.74

30% -4% 24% 1%

7.2.3 Government’s revenue from SOEs
Overall, revenue from SOEs and linked companies in terms of tax and dividend reduced by 2%, which was Nu. 159.45 million less compared to 2010. These companies contributed Nu. 7,647.15 million in the form of dividends and taxes to the Government compared to Nu. 7,806.60 million in 2010. The decrease was mainly on account of the fall in profitability of DGPC whose contribution constitutes about 29% of the total domestic revenue. During the year, the revenue contribution from DGPC was Nu. 5,140.79 million of which THP contributed Nu. 3.043 billion (90% of PAT plus CIT). On the whole, revenue contribution from SOEs and linked companies constituted about 44% of the total domestic revenue2 and about 10% of the GDP.

7.2.4 Subsidy and Grants
During the year, the Government provided Nu. 398.181 million in the form of subsidy and grants to SOEs, which was Nu. 76.847 million higher than the amount provided in 2010 ( Nu. 321.33 million) . BBS was the highest recipient of subsidy with Nu. 158.65 million as operating grants followed by Druk Air with Nu. 157.224 million as interest subsidy on its Bonds. BDB was given tax exemption to the extent of Nu. 61.54 million.

2

DRC: Domestic revenue in 2009-10 was Nu. 15,638.434 million
NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13

90

7.3 Report on financial and operational performance of Druk Holdings & Investments
In 2011, DHI experienced a drop in its earnings and profitability because of the fall in dividend payouts out from larger companies like DGPC, BoB, BFAL and NRDC. DHI’s total dividends received from its companies were lower by 4% from Nu. 4,599.20 million in 2010 to Nu. 4,423.968 million, and hence, DHI’s gross revenue in 2011 fell by 3%. More than 80% of DHI’s total revenue comes from DGPC, therefore any variation in the dividend from DGPC would directly influence the revenue of the company. The DHI’s operating cost increased by 15% from Nu. 45.276 million to Nu. 52.01 million on account of increase in employee and other administrative costs. As a result, the pre-tax profit of the company declined from Nu. 4,423.415 million in 2010 to Nu. 4,307.963 million. This consequently led to a fall in return-on-equity to about 6% which is comparatively lower than other SOEs. Remittance from DHI in terms of corporate tax fell from Nu. 1,327.035 million to Nu. 1,292.389 million and contributed Nu. 2,939.272 million as dividend (including Nu. 1,439.27 million profit transfer from THP).

Table 7.4: Financial overview of DHI:
Particulars Share Capital Reserve and Surplus Debt if any Total Assets (Book Value) Net Worth Gross Turnover Expenditure Profit Before Tax Corporate Income T ax Profit After Tax Dividend Return on Equity (after tax) 2011 44268.25 1040.69 51060.62 45308.93 4344.38 52.01 4292.37 1287.71 3004.66 2949.96 6.6% 2010 44268.25 985.99 50971.27 45254.24 4468.69 45.28 4423.42 1327.04 3096.38 2989.37 7%

Nu. in millions Change % 0.00% 5.55% 0.18% 0.12% -2.78% 14.88% -2.96% -2.96% -2.96% -1.32% 0.00%

NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13

91

Dungsam Polymers. magnesium metal production. 50.2 Investments The ongoing investments undertaken by DHI.268.3.1 DHI’s Assets and Equity The paid-up capital of DHI grew by Nu. Special Economic Zones (SEZ) and Amochhu Land Reclamation Project.3. Japan. Thimphu international convention centre and wellness centre.7.784. 44.133. 59. 44.062.866 million from Nu. a wholly-owned subsidiary of DHI is implementing the Education City Project. The Dungsam Polymers Limited established for the production of polypropylene (PP) bags has started commercial production in March 2012. 7. Similarly.3%) from Nu. 92 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . Bhutan bottled water.895 million in 2011. 44.3%). Total value of reserves and surpluses of the company was Nu. 51.971. Other projects in the pipeline and which are under consideration are. DHI’s asset value grew by less than a percent (0.25 million to Nu. DGPC and DHI Infra include Thimphu Tech Park. Tashigang a collaboration with Shin Nippon Biomedical Laboratories Ltd (SNBL).114 million largely due to the increase in equity investment in BNB. Almost 88% of the total assets constitute DHI’s equity investments in SOEs and the linked companies which amounted to Nu. 1.291 million compared to Nu.328. Dungsam Cement Project.989 million in 2010.27 million to Nu. 126 MW Dagachhu Hydropower Project (DHP).428 million as of December 2011. Education City Project and Amochhu Land Reclamation Project. 985. DHP which is 59% owned by DGPC is expected to be completed by 2013 and DCC will be operational by the end of 2012. dairy plant in Chenary. DHI Infra. The works for the first phase of the Education City project has been already awarded to a consortium from India (ILFS & IIPL). to manufacture yogurts and other dairy and related products. reserves and surplus grew by 8% with marginal growth in net worth (0. As a result.

Major portion of revenue was earned from its investments. 431.973. On average.897 during the last financial year to 3. Financial and operational achievements NPPF has achieved commendable performance during FY 2010-11. Mangdechu. Dungsum.34 percent growth. Army Welfare Project and Army School Project.061 as of December 2011 with a pension payout of Nu. Dungsum Polymer.59 million recording a growth of 20.587.025 members to 46. It has generated gross revenue of Nu 689.18 percent during the year mainly attributed to growth on return on investments.781.30% in its membership from 43.64 million as compared to Nu.22 million to Nu 10. Dagachu. The total number of pensioners increased from 2. it grew by 4.8.73 million in FY 2009-10 indicating a 17.CHAPTER VIII: REPORT ON THE NATIONAL PENSION AND PROVIDENT FUND AND THE ROYAL MONETARY AUTHORITY 8. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 93 .1 National Pension and Provident Fund (NPPF) NPPF registered a growth of 5. Its fund size has grown from Nu.01% over the past five consecutive years on account of the inclusion of employees of Puna-I and II.67 million.026 in 2011. increase in membership and contributions from the members.

965.550 Average return p.5% 9% B B.12% 5. The NPPF’s investments as on 31st December 2011: Sl.1 Bonds C D E B.496 Real Estate Equities Total Deposits with Banks 589.) A A.852. NPPF is also financing Yangphel Real Estate Developers.852.6% 11.127 332. 11.745.9% 10% 8.514 1.1 Loans Loans to Government 436. No. 5.842 1.242 million as of June 2011. Investment types Amount (in million Nu.243.893 6.853 942.481 6.928 1.Investments and their performance Total investments consisting of institutional loans. term deposits. To foster a publicprivate partnership.2 Government Corporate 638. etc have grown to Nu.17% 5.950.556 8.5% A. shall be replicated in other Dzongkhags throughout the country.242 Over the past eight years of its operation.79% 7. This project will help the NPPF to promote homeownership to its members and if successful. the NPPF has consistently declared returns of more than 6% per annum: 94 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .a.3 A. equity investments in large projects like DHP. loans to members. real estates.2 Loans to Institutions and Companies Loans to members Housing Student Education 3. bonds.85% 3.

NPPF is also in the process of introducing new retirement savings schemes in an effort to ensure greater income security for all the salaried employees in Bhutan. the annual audit of the RMA’s accounts for the period ending June 30. On the expenditure front. The interest earnings grew by 10% from Nu. and Mongar and all its branches are interconnected with the Virtual Private Network for the real time exchange of information and faster delivery of services to the members. Towards achieving this goal. there were 39 students studying under the Student Loan Scheme.693 million in 2011. Phuentsholing.230 million. the RMA’s total operating income grew by 15% from Nu. After making adjustments towards special reserve account and on cost of monetary policy. the NPPF has taken advantage of the G2C Project to make its services easily available at the grass root level. pensioners can now avail the ATM services of the banks. In October 2011.192 million in 2010. NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 95 . As per the accounts report. 643 million to Nu. By 31st December 2011. the total operating expenses increased by 7% of which.2 Royal Monetary Authority (RMA) In accordance with the Royal Monetary Authority Act of Bhutan 2010. there was a net surplus of Nu.740 million in 2011 with interest earnings forming 94% of the total operating income. NPPF has always accorded top priority in improving service delivery for the benefit of the members.New initiatives and schemes NPPF at present have four branches at. the expenditure on security printing and minting accounted for 22% followed by 20% incurred on interest expenses at 20%. 2011 was carried out by external auditors. Gelephu. 632 million to Nu. a growth of 20% as compared to Nu. In order to provide wider choices in pension delivery system. 8. Samdrupjongkhar. NPPF launched a Student Loan Scheme with the objective of providing financial support to the needy students for pursuing higher education.

the central bank influences the availability of money and credit. the central bank has to regulate them through those instruments. Through monetary policy. The monetary policy instruments include cash reserve ratio (CRR). The RMA has recently been fully seized with monetary policy actions to regulate excessive credit growth which has led to high imports and depletion of Indian Rupees. When there is inadequate credit or excessive credit build-up in the economy. price stability. 96 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 . and adequacy of foreign exchange reserves. open market operations and prudential guidelines.The Royal Monetary Authority’s primary mandate is to conduct monetary policy to help promote financial system stability. It has implemented a series of monetary measures and other measures such as streamlining rupee and convertible currency management. statutory liquidity ratio (SLR).

As of March 2012. 31.97 m contributed for the Rural Communication Project.1.CHAPTER IX: REPORT ON TRUST FUNDS 9.1. The Rural Communication project to which the contribution was made.164 m was contributed towards co-financing the procurement of drugs (pentavalent vaccines Diptheria.278 m from investments in Bhutan and abroad and spent USD $ 1. 2. Hepatitis B and Hib) with GAVI.4 Universal Service Fund for ICT With an income of Nu.1 Trust Funds The status the Trust Funds are as below. the Fund earned an income of Nu.70 m during the year and Nu.1 Bhutan Trust Fund for Environmental Conservation (BTFEC) The BTFEC’s initial capital of US $ 21. the Fund’s balance was Nu. Pertussis.3 Cultural Trust Fund The Fund’s balance as of March 2012 was Nu. The increase was from interest earnings from the term deposit.130 m.1. the Fund had earned an income of USD $ 2. 80. 9.1. aims to provide mobile cellular connectivity to the NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 97 . 116. 77. During the year. 47. Tetaus.866 m by way of interest from fixed deposits. 1.279 m as against the initial capital of Nu.267 m in 1999.117 m on conservation grants and operation of the Fund’s office.673 m has reached US $ 42. loans and bonds while Nu. 26. 9. the Fund has a balance of Nu.56 m as of March 2012. 9.300 m as of June 2011.2 Bhutan Health Trust Fund (BHTF) During the year. 9.

The fund also contributed in providing broadband connection to the high schools. 80.240 (2007) Revenue US $ 2.278 Nu 26. and Dzongkhag Administration Offices such as Gasa and Dagana.267 (1999) Nu. 194.117 Nu 2. 116.300 Nu 1. Table 9. 47.673 (1991) US $ 1.164 Nu.130 Nu. 77.279 Nu.421 Nu.866 Nu.1: Fund position of Trust Funds Trust Fund Bhutan Trust Fund for Environment Conservation Health Trust Fund Cultural Trust Fund Universal Trust Fund for ICT Initial Fund (Year) US $ 21.000 (1998) Nu.700 Amount in millions Expenditure US $ 1.rural communities in the shadow areas. 31. 1.562 98 NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 .970 Fund Balance US $ 42.

We have tried to meet the requirements of all agencies against the backdrop of our need to control Government expenditures.56 % of GDP. we will be set on a higher platform of development. we are truly enabled to improve our own lot through industry and initiative. In the 11th Plan. These will enable us to move ever closer towards the goal of Gross National Happiness. under whose guidance this first democratic government has been able to serve the people and set the right standards. I take this opportunity to thank the Honourable Members of the National Assembly for the kind support granted to me for the budgets that I presented. On my part. With the proper execution of the budget.CONCLUSION This concludes my presentation of the budget for the final year of our term. I submit that I have done the utmost within my capacity to provide a fair and just budget given the limited resources. I end by paying tribute to His Majesty the Druk Gyalpo. development activities can be carried out with much greater efficiency as almost all our communities are provided with the basic infrastructure. prosperity and happiness. Thank you. I now commend the budget to the House and submit that the Supplementary Budget Appropriation Bill for the FY 2011-12. Thus. The budget deficit has been accordingly brought down to 1. May the guardian deities of the glorious Palden Drukpa forever protect and guide the Bhutanese nation and people for peace. We sincerely hope that the agencies can complete the programmes and activities within the budget limits set. I also wish to thank the Honourable Prime Minister and my colleagues in the Lhengye Zhungtshog for their kind support and guidance. Budget Appropriation Bill for the Financial Year 2012-13 and Tax 2012 Bill be kindly passed. ******* NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 99 .

680 0.000 5.800 0.540 0.140 3.340 1.100 4.Budget Statement for the Legislature.200 2.059 Retirement benefits Total 126.540 3.680 0.150 5.185 165.200 0.800 0.808 0.857 0.637 1. the Judiciary & the Constitutional Bodies for the FY 2012-13 Nu.000 65.090 1.199 3.893 Capital Total Current Capital Total Recommended Remarks ANNEXURES 100 Activities/sub-activity Establishment costs.290 0.745 3.071 0.637 1.250 19.432 1.290 3.432 1. in millions NATIONAL ASSEMBLY Proposed Current 19.263 0.284 0.100 22.432 2.128 Assembly session services 3.808 0.745 114.150 1.120 1.800 0.880 1.432 1.730 60.272 89.100 4.120 1.808 0.893 17.800 2. Secretariat Establishment costs for Parliamentary Services Zhungkha Promotion Maintenance of security system in Parliament house Maintenance of fire alarm & hydrant system in Parliament house In-house printing of Acts Parliamentary exchange programmes Broadband connections PAC Secretariat costs Reserve for new appointments Digital IR Based Interpretation system NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 ANNEXURE – I Committee services 124.090 1.800 7.122 12.178 0.808 0.200 1.800 31.200 0.059 0.857 5.262 .085 2.000 4.100 22.522 17.185 41.446 120.880 0.340 2.

000 2.913 62.618 0.163 0. in millions Remarks Activities/sub-activity Establishment costs.400 2.500 15.364 0.030 2.270 49.100 45.893 12.100 1.000 0.193 1.100 1.000 33. resolutions etc.929 4.176 2.270 1.897 Recommended Capital Total 29.000 2.252 2. Secretariat Establishment costs for Parliamentary Services Printing of Acts.400 77.893 28.000 Current 29.011 74.000 17.264 1.100 52.225 1.000 90.743 0.000 50.747 2.000 Remarks Activities/sub-activities Establishment Cost General Provision for new appointments Institutional Development Ethics & Integrity Management Programme 34.750 12.000 54. Parliamentary exchange programmes Reserve for new appointments Consultative meeting with local government Retirement of NC members Committee services NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 Total Nu.379 49.747 43.252 0.850 0.000 15.199 0.835 32.619 1.800 0.252 0.604 52.176 116.563 101 .619 1.847 2.929 88.180 0.154 Construction of office building Total 83.193 1.571 2.200 0.800 83. in millions ANTI CORRUPTION COMMISSION Proposed Current 30.264 1.252 2.000 4.500 Proposed Current Capital Total Capital Total Recommended Nu.618 0.NATIONAL COUNCIL Current 13.200 0.100 Capital Total 34.

737 0.698 1.410 0.441 0.052 5.518 0.920 0.777 58.590 Recommended Capital 0.499 13.500 7.018 Current 29.880 14.700 107.297 0.775 0.200 0.600 32.883 Nu.200 0.698 1.935 0. Samdrup Jongkhar.761 2.500 63.000 3.871 1.750 1. in millions Recommended Capital 98.500 1.297 0.680 0.457 3.500 61.327 Total 99.500 1.087 1.781 0.590 0.465 14.680 4.358 49.777 58.290 1.700 164.000 129.267 Activities/sub-activities Establishment Cost Research & Publication Consultative meting & workshops with public and other stakeholders Civic & Voter Education Zhungkha Development Procurement of vehicles for Dzongkhag Election services Electoral Roll Exercises General provision for new appointments Construction of Dzongkhag Election building Total NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 Activities/sub-activities Establishment costs: HQ.000 0.003 3. Tsirang & Phuentsholing Production and printing of Annual Audit Reports Visit of Controller & Auditor General of India to Bhutan Audit awareness program for Gewog leaders HR capacity building Construction of training centre Renovation of office building.698 1.441 0.229 7.481 0.600 38.680 2.600 2.000 0.680 2.232 0.821 1.700 103.300 Total 29.000 0.517 0.600 639. Bumthang. in millions Remarks 102 ELECTION COMMISSION Proposed Current Capital Total 36.750 1.700 171.000 0.290 1.698 Remarks ROYAL AUDIT AUTHORITY Proposed Current Capital Total Current 104.777 58.Nu.050 1.945 0.500 1.000 768.990 0.990 6.180 107.000 9. Samdrup Jongkhar General provision for new appointment Total .857 0.420 0.777 58.

500 60.BCRS 2012 Improvement of Web Based Services NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 Annual HR Conference Zhungkha Promotion General provision for new appointment Preparatory works for new RCSC Secretariat building construction HRD Postgraduate Services Nehru-Wangchuck Scholarship Total 103 .112 0.247 27.497 0.200 3.890 0.247 0.100 0.550 32.588 74.500 30.100 0.200 2.972 3.350 0.342 60.350 0.500 2.783 1.690 162.690 156.558 31.540 0.000 74.302 0.000 2.000 74. in millions ROYAL CIVIL SERVICES COMMISSION Proposed Current 26.550 0.043 SDS GoI GoI 0.330 20.890 0.497 0.690 188.325 0.783 Capital Total Current Capital Total Recommended Remarks Activities/sub-activities Establishment Costs Royal Civil Service Commission Meeting Bhutan Civil Service Exam Services Human Resource Development and Training Services Revision of BCSR .325 3.330 20.762 0.931 0.701 60.112 2.970 60.262 27.540 0.330 20.972 0.Nu.931 0.000 74.690 195.802 0.330 20.500 2.

000 8.000 7.100 3.200 2.643 2.622 5.660 108.480 6.647 113.926 10.000 0.797 4.926 0.086 5.100 3.000 7.286 0.643 2.200 2.000 7.104 Nu.201 0.300 9.100 3.100 3.400 0.263 0.220 0.622 0.500 7.200 7.532 5.643 2.751 97.225 0.000 2.797 4.222 0.000 7.400 9.000 0.003 97.500 7.231 0.200 SDC Activity Supreme Court Establishment cost 20 Dzongkhag Establishment Cost High Court Establishment Cost Enactment of Laws Royal Institute of Law Project Bhutan National Legal Institute 15 Dungkhag Establishment Cost Research and publication Judicial Service Council Meeting National Judicial Commission Meeting Zhungkha Development Legal Aid to Indigent Accused Short Term Training Higher Studies in Law (LLM) Higher Studies in ICT Peer exchange Out-going Peer exchange in-coming Development of Training Academy NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 Training of Trainer Course & Diploma Development .220 0.263 0.840 54.400 1.000 2.000 5.643 2.903 0.201 0.400 8.000 6.557 18.000 5.231 0.220 0.000 7.000 5.080 6.797 4.828 17.882 17.660 26.828 Capital Total Current Capital Total Recommended Remarks 35.202 0.200 0.450 29.100 0.797 4.000 7.372 34.300 0.220 0.000 0.000 5.100 18.325 5.104 40.652 26.222 0.225 0.100 3.400 13. in millions JUDICIARY Proposed Current 29.

500 1.845 37.701 0. Lawyers & Attorneys NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 Publication of journals/ law magazine Construction of Bumthang District Court Construction of Supreme Court Construction of Trongsa District Court Construction of Pema Gatshel District Court Construction of Lhuentse District Court Construction of Drangpon’s residence.000 - Construction of Trashi Yangtse District Court - Construction of Punakha District Court - Inauguration of Supreme Court Site development of new Court.460 30.726 8.500 150.000 19.470 339.000 20.000 13.540 0.500 0.701 0.574 0.000 13.355 0.540 0.500 150.421 14.000 19.355 0.750 0.811 13. Bumthang Construction of Drangpon’s residence.500 0. Lhamoizingkha Dungkhag - 105 .540 0.500 13.500 0.Nu.000 19.000 20.726 8.000 20.460 30.400 0.991 1.421 15.355 0.433 0.000 19.609 37.845 4.811 20. Gasa 1.355 0.574 1.400 0.470 0.991 0.500 Spillover Spillover Spillover Spillover Spillover Capital Total Current Capital Total Recommended Remarks Activity Meeting & workshops with District/ Dungkhag stakeholders Purchase of books for Law Library Exchange program and establishment of Institutional Linkage Legal dissemination and awareness programme Training of women & child friendly procedure for Judges. in millions JUDICIARY Proposed Current 0.421 15.000 0.000 339.421 14.540 0.433 0.750 0.609 4.

500 0.500 0.100 0.250 0.720 772.223 561.250 0.190 0.066 265.700 0. Haa Renovation of Drangpon’s residence.943 192. Thrimshing NATIONAL BUDGET FOR THE FINANCIAL YEAR 2012-13 Total .587 0.106 Nu.500 0.700 0.184 0.100 0.190 0.190 0.700 0.500 457.500 211.250 0.250 0. Sarpang District Court Renovation of Drangpon’s residence.700 0. Trongsa Maintenance of Drangpon’s residence . Chhukha Renovation of Drangpon’s residence. in millions JUDICIARY Proposed Current 4.500 0.250 Spillover Capital Total Current Capital Total Recommended Remarks Activity Renovation of security guard’s room.190 4.100 0. Dagana General reserve for new appointment Construction of Drangpon’s residence.587 0.100 0.