The finance ministry will continue the austerity measures into the current fiscal year. This is done to reduce recurrent expenses which are directly met from the domestic revenue. Domestic revenue slumped since the onset of the pandemic last year. Austerity measures are taken to shrink a government’s budget deficit during difficult economic times.
The finance ministry issued a notification last year, stating that the Government would not construct new establishments or hire private buildings for office space as budget policies to reduce the deficit. The notification also called for all government agencies to rationalize in and ex-country travels within the approved budget.
Civil servants getting transferred during the current fiscal year will have to do so without the transfer benefits. On the other hand, the yearly salary indexation will also be postponed. Meanwhile, all public servants who wish to monetize their vehicle quota cannot do so according to the austerity measures.
In a virtual Meet the Press session today, the finance minister Namgay Tshering said the recurrent budget is down by an estimated 22 per cent this year. However, the minister added this is a temporary solution to meet the mandatory recurrent expenses. “It is mentioned in the Budget Appropriation Act that if the situation doesn’t improve and if the revenue performance depletes, the Government might need to take other prudent measures. But, on the other hand, if the domestic revenue situation improves, then we can slowly lift the short-term fiscal measure in place right now.”
Some other austerity measures ask the local governments and central agencies to reprioritize their activities within the approved budget. Government agencies need to develop an annual procurement plan to avoid last-minute spending.
At the press conference, Prime Minister Dr Lotay Tshering said that the Parliament had authorized the finance ministry to come up with any austerity measures that are required. “At normal times, it might have to come through the Parliament. But this time, if there are any emergency issues, the Parliament has vested the finance ministry in coming up with any austerity measures.”
The recent Parliament session passed Nu 80.4 bn as the 2021-2022 fiscal year budget outlay. Of which Nu 35.5 bn will be used for current expenditure.
Sherub Dorji
