The Economic Affairs Committee of the National Council recommended increasing human resources to address the underutilization of the capital budget. The committee also made another recommendation concerning fiscal risks. The recommendations were presented during deliberations on the Budget Appropriation Bill and Supplementary Budget Appropriation Bill for the Financial Year 2024-2025 in the house today.
Presenting the recommendation on addressing the underutilisation of the capital budget, the committee noted that the upcoming financial year’s capital budget is Nu 38bn, an increase of Nu 9bn from the current financial year.
The government meets the capital budget mostly from grants and loans and allocates the budget on the development of new infrastructure including roads and buildings among others.
The committee chairperson said in the past, around 20 per cent of the annual capital budget has remained underutilised and returned to the government which is a cause of concern. An underutilised capital budget has implications for the effective and optimum use of borrowed funds.
“To utilise the budget effectively, the government should increase human resources, establish an effective mechanism to ensure optimal use of the capital budget, and carefully plan the budget allocation as per the requirement,” said Tshewang Rinchen, chairperson of the Economic and Affairs Committee.
The second recommendation from the committee was on fiscal risks arising from macroeconomic shocks, such as changes in economic growth, commodity prices, and inflation among others.
The committee recommended the government develop specific plans to address potential macroeconomic shocks by implementing strong fiscal management practices.
The House endorsed both the recommendations.
The Budget Appropriation Bill for FY 2024-2025 and Supplementary Budget Appropriation Bill for FY 2023-2024 will be put to vote on Tuesday for formal adoption.
Deki Lhazom & Phub Dorji
Edited by Phub Gyem
