The National Assembly’s Economic and Finance Committee has urged the government to immediately release the remaining Nu 10bn from the Economic Stimulus Programme, ESP, budget. To date, only 5bn of the 15bn budget has been disbursed. The committee said that tranche-based releases are unsuitable for addressing urgent economic needs. It presented seven recommendations and observations on the government’s ESP in the National Assembly on Friday.
To refine and enhance the Economic Stimulus Programme, the committee recommended that the government prioritise investments in high-return projects, noting that some funds had been allocated to recurrent expenditures such as capacity building.
Economic and Finance Committee’s chairperson Rinchen Wangdi said, “We are also proposing to establish a fixed turnaround time. We also recommend simplifying the process to make it easy and convenient.”
The committee also recommended adopting risk-sharing mechanisms, as participating financial institutions remain hesitant to provide loans due to perceived high risks.
Other recommendations included expanding the ESP to high-potential sectors currently excluded and standardising loan disbursement and processing guidelines.
Additionally, the Economic and Finance Committee urged the government to expedite the proposal for a new Insolvency Bill to address and manage non-performing loans and mitigate associated risks.
“All the recommendations presented by the committee were well-researched and are commendable. However, we have been enforcing all the recommendations,” said Lekey Dorji, Finance Minister.
The majority of the members endorsed all seven recommendations presented by the committee.
The recommendations aim to address existing challenges in the ESP, enhance its effectiveness, and ensure it can drive both short- and long-term economic recovery.
Launched in May 2024 with a Nu 15bn grant from India, the ESP focuses on sectors such as tourism, agriculture, skills development, and the creative industry.
However, progress has been slow, with only over two and a half billion ngultrum of the five billion allocated for concessional credit disbursed so far, and only 12 out of 193 project proposals approved.
Karma Wangdi
Edited by Sherub Dorji
