Members of the Opposition party say the government has not been able to stimulate the economy, despite many promises it made through the Economic Stimulus Plan (ESP).
The growth of economy has slowed down since 2013 when it registered the lowest growth rate of 2.05 percent in decades. On the other hand, the commercial banks are flooded with excess cash of Nu.19.7 B.
South Thimphu’s MP Yeshey Zimba said the main reason the government launched ESP through the establishment of Business Opportunity and Information Centre was to stimulate the economy.
The banks had faced extreme shortage of cash in 2012. The government had launched ESP to spur the economy by injecting cash in the financial system.
“…Suddenly one and a half years later there is excess liquidity. This basically means no meaningful economic activity was taking place and the government has not been able to stimulate the economy.”
The members of the opposition said economic policies should be in place by now.
Opposition member of Lamgong-Wangchang, MP Khandu Wangchuk said if the economy cannot absorb Nu.19B, there was something seriously wrong. This, he said, was a huge challenge and that everyone ought to work together to overcome this without blaming each other. “We should not give up; we should take the economy seriously.”
Bartsham-Shongphu’s MP, Wangdi Norbu said perhaps the reason why the banks had excess cash was because banks must have already reached the maximum exposure in terms of lending in some sectors like housing.
“If a few new industries are encouraged, then it can easily absorb the excess cash and the banks will be able to use the excess idle cash.”
Panbang MP, Dorji Wangdi said nothing was happening at the economic front; therefore banks will make lesser profit and hence declare lesser tax to the government.
North Thimphu’s MP, Kinga Tshering said the economic growth rate was much lower than what was projected in the budget report. The budget report projected that in 2013-14 fiscal year growth would be recorded at 7.08 percent, which he said was based on plans and activities. This meant there was a variance in projection and implementation. He said the government should not blame the previous government for its policies that impacted growth.
“The economy in 2017-18 will register 15 to 20 percent growth rate on account that several hydropower projects will be commissioned, will the government then credit this to the previous government?”
