While the government has sufficient capital budget to meet the expenditure for re-prioritised activities under 12th FYP, meeting the recurrent expenditure from domestic revenue is a concern, according to members of Economic Contingency Plan Delivery Unit (ECPDU) during a press briefing yesterday.
The Economic Contingency Plan, initiated to respond to challenges of COVID-19 pandemic, involves accelerating, re-prioritising and front-loading the 12th Five Year Plan activities.
As per the Constitution, all recurrent expenditure must be met from domestic revenue.
Chencho, a member of ECPDU, said, “Domestic revenue is definitely hit because there will be no revenue from tourism and many businesses will not be able to pay taxes. So that’s why there will definitely be some impact.”
He said that the Ministry of Finance is assessing how the situation will deteriorate the government’s capacity to generate enough revenue to cover recurring costs in the next few months.
In line with the Economic Contingency Plan, the government has re-prioritised and front-loaded a few of the 12th Five Year Plan activities. As a result, these activities are expected to put pressure on the requirement of capital expenditure.
However ECPDU members said that considering the support from country’s development partners, there will not be any scarcity of capital expenditure and capital expenditure to meet expenses of the re-prioritised activities will not be an issue.
“When it comes to capital, we are 80-90% dependent on external assistance. And we are thankful to all our development partners; they have in fact come forward and extended their full support and said they will be more than willing to help, especially the government of India has actually gone out of their way to help us,” said Chencho.
Under the Economic Contingency Plan, the government is deferring certain activities and prioritising critical activities to boost the local economy. Farm road construction and improvement is one of the activities the government has prioritised to enhance agriculture production.
Sonam Pem
