The government has proposed Nu 109bn as the budget for the 2025-2026 financial year. This is a 12 per cent increase from the previous year. In a recently issued notification, the finance ministry says the budget focuses on infrastructure development, public services, and economic growth. The ministry highlighted sustainable planning and resource prioritisation to achieve the development goals of the second financial year of the 13th Five-Year Plan.
The government expects to collect Nu 89.35bn to meet the required budget.
This includes Nu 67.28bn expected to be met from domestic revenue generated through taxes and other income within the country, and Nu 22.07bn from external grants provided by other countries and organisations.
The government will still run short of Nu 20bn. The finance ministry plans to manage this fiscal deficit by borrowing from both domestic and international sources.
Of the total budget, Nu 53.79bn will be allocated for capital expenses, such as building roads, schools, and other infrastructure, while Nu 55.56bn will cover recurrent expenses, including salaries and the daily costs of running public services.
In the budget call notification, the finance ministry has directed agencies to prioritise projects that benefit the economy and the public, including repairing disaster-damaged infrastructure, procuring essential vehicles such as ambulances and school buses, and ensuring the timely completion of donor-funded projects. It says that new office buildings will only be approved if they are backed by external funding and a strong justification.
The notification also sets clear deadlines for preparing the budget. Agencies must submit their annual work plans by next Monday and their final budget proposals by 15th March, making sure they align with the set goals.
To keep spending under control, the ministry has set a limit on the amount that can be spent on big projects, only allowing 20 per cent of the total budget for the 13th Five-Year Plan to be used for these projects.
The notification also outlines a new initiative aimed at encouraging efficiency by rewarding agencies that generate additional revenue through innovative approaches. Agencies that succeed in this will be allocated extra funds in the following year, promoting a more effective and sustainable use of resources.
Karma Samten Wangda
Edited by Phub Gyem
