The current five year plan (12th FYP)’s total budget outlay is estimated at Nu 310.02 bn. This is an increase of 38 per cent compared to the previous plan (11th FYP).
The Finance Minister Namgay Tshering shared this in the National Assembly session today. The minister was presenting the review report on the 12th FYP.
Of the total public expenditure outlay for the plan, Nu 193.86 bn will be used to meet the current expenditure.
The estimated current expenditure is an increase of 69 per cent as compared to the 11th FYP. The current expenditure is used for maintenance, repairs, and salaries for public servants.
The finance minister also informed the house that about 54 per cent of the Nu 116.12 bn allocated for the country’s capital expenditure will be met through grants and 21 per cent through domestic revenue.
This leaves a resource gap of 25 per cent for capital expenditure which includes infrastructure development such as roads and buildings.
The Finance Minister also highlighted that the total budget available for the 12th Plan is projected at Nu 280.77 bn. Of that, Nu 217.79 bn comes from domestic revenue and Nu 63.04 bn as grants from external and internal donor agencies. Percentage wise, 54 per cent of the capital expenditure will be financed by grants.
This leaves a fiscal deficit of nearly Nu 30 bn. However, the fiscal deficit stands at 2.4 per cent of the GDP, which is well within the country’s target of keeping it below three per cent of the GDP.
The minister added major portion of external grants will come from the Government of India. Other donor sources include the European Union, Japan and the UN agencies.
At the end of 12th FYP in 2023, the country’s total public debt is projected to reach Nu 249.23 bn.
Of that, Nu 215.86 bn will constitute external debt. Eighty per cent of the external debt will be due to hydropower sector.
The finance minister informed that with the expected commissioning of the Mangdechhu and Nikachhu hydropower projects, the country’s external debt is expected to decline.
