Infrastructure development gets highest capital budget allocation

Business Headline National News News

Infrastructure development has the highest capital budget allocation in the 12th Five Year Plan.  

The Secretary of GNHC Commission (GNHC), Thinley Namgyel said there is still need for farm road, irrigation, and schools and hospitals at the national level that need to be build in rural areas.

However, he added that the trend is declining slowly as lots of infrastructure has been built in the past and that budget allocation is increasing in terms of human resource.

 “We may get donors to build infrastructure, but it is difficult for maintenance. In the first plan the capital budget has huge amount,” the Secretary said.

In the 12th Plan, Nu 193bn is allocated as recurrent and Nu 116bn is capital; the recurrent is expected to increase in every plan.

“As we develop the capital budget will come done and recurrent will go up,” Thinley Namgyel said.

Meanwhile, the local government budget has also increased, which is almost double from Nu 28bn to Nu 50bn.

The GNHC Secretary said this is because most of the development activities have been shifted to the local government from the central government.

He added that most of the ministries’ budget allocation has gone down.

“Like for the ministry of agriculture, the irrigation channels could be done by the local government and similarly for department of road the roads constructions have shifted to the local government and in the 12th Plan there is no huge project like construction of the east-west highway,” he said.

He added, “There is a slight reduction but there is no significant reduction in terms of capital budget.”

When asked about how different is the 12th Plan from that of the 10th and 11th, the Secretary said in the 12th Plan we will be graduating from the Least Developed Country (LDC) category and that lots of emphasis will be on economy diversification and employment creation. Once we graduate from LDC category, aid flow will come down and then we will have to find our own resources to keep the development activities going and the only way of doing it is through revenue.

According to the Secretary, in the 12th Plan health and education sectors have been prioritized with more focus on quality, enhancing quality on teachers, doctors and nurses.

The other new elements in the 12th Plan are the formula on resources allocation for local government and Dzongkhags, which have been revised.

In the 10th and 11th Plans, the formula was based on population, geographical area, poverty, and transport cost index. The formula has been revised basically and looks into major issues at the gewog and dzongkhag level. The formula is different at the gewog and dzongkhag level.

For example, at the gewog level water is scarcity and in the 12th Plan it mainly focuses on water and gewogs which have water scarcity problem gets higher budget allocation.

“We also have to consider the GNH index for the first time,” said the secretary.

 The other determinant is flagship program. The idea of the program is to identify which are big issues and which require multi-sectoral ordinations and significant resources.

There are eight or nine flagship programs in the 12th Plan.

Dechen Dolkar from Thimphu