The Economic and Finance Committee in the National Assembly today pointed out the failure of the National Credit Guarantee Scheme (NCGS) to cater to far-flung districts and gewogs creating regional imbalance and upsurge in rural-urban migration. The committee reviewed the National Budget for Financial Year 2021-2022 which was presented by the Finance Minister last month in the House.
The government unveiled a national budget of more than Nu 80bn for the fiscal year 2021-2022 last month. It is aimed at ensuring sustained economic stability for a resilient recovery. In the national budget, the NCGS is a key component for economic recovery. The government has committed to extend the guarantee up to Nu 3bn for a period of three years to private individuals without any mortgage.
However, the committee says most beneficiaries of the scheme are from the western districts. The committee recommended the government create awareness of the scheme so that people living in other districts can also avail themselves of the scheme.
“So far, 81 projects have been approved under this scheme. But all these projects are western-centric. In other dzongkhags, except for one or two, there are not much. So from now on, the government should create extensive awareness on the scheme and institute a mechanism of hassle-free loan accessibility amongst all the Bhutanese with a regionally balanced plan,” said Kinley Wangchuk, the Chairperson of the Economic and Finance Committee in the National Assembly.
The Finance Minister however said that so far, over 12,000 people have inquired about this scheme signifying awareness among people.
“When the committee say that the scheme is regionally imbalanced, is it imbalance in terms of the service in districts or imbalance of people from other districts availing for the scheme. This should be clear. For instance, if a person stays in Thimphu but if he is from Monggar and if he wants to avail loan in Thimphu, he will be registered here. We don’t look at his permanent address. We should also look at it. We look at the project site,” said Finance Minister Namgay Tshering.
The committee also recommended the government put in place stringent measures for monitoring and Loan recovery. The opposition leader who is a member of the economic and finance committee said that although such initiative is appreciative and beneficial, he said the government has to consider the risks too.
“If the scheme is going to continue, there should be a bit of change like our recommendation or like other countries, if they can’t pay, the government should come up with endowment fund. If that’s the case, we can approve thousands of project. If today the government proposes about endowment fund for people who might fail to pay back, we will approve it right away,” said Opposition Leader Dorji Wangdi.
However, the speaker has directed the committee to review their recommendation again and present it tomorrow.
Samten Dolkar
