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Question Hour Highlights (24 November 2017)

Posted on :24 November 2017

1. Excise duty on petrol and diesel

The Member from Bartsam-Shongphu asked the Minister for Economic Affairs to clarify whether the full excise duty exemption on petrol and diesel by the Government of India was passed on to the consumers.


The Minister responded that the recent reduction of price of petrol and diesel was due to the exemption of excise duty by the Government of India and that the full exemption has been passed on to the consumers.


2. Allocation of budget for natural disaster relief activities in the Dzongkhags

The Member from Kabji-Talo constituency asked the Finance Minister on the possibilities of granting certain amount of budget to the Dzongkhag every year to fund relief activities during the times of disasters as the current process is tedious?


The Minister responded that as per the Disaster Management Act 2013 there were three types of financing arrangements - financing for response and relief operations, financing for immediate restoration of essential public infrastructure to normalcy in the community and financing or recovery and reconstruction. During the time of disaster since expenses needs to be incurred on emergency basis, as per the Public Finance Act, the agencies meet the expenses from their normal annual budget and later claim reimbursement from Ministry of Finance through Department of Disaster Management. The Agencies have to submit documents and detailed accounts to the National Disaster Management Authority which will then review and forward the request to the Department of National Budget, Ministry of Finance for necessary imbursement.


The Minister felt that since the Act covered the budget allocation and funding for recovery and reconstruction, the current practice should be continued as disaster is an unpredictable event and it would be difficult to assess and estimate the allocation of disaster budget. Moreover, the allocation of budget would also affect the Dzongkhag budget ceiling.


3.  Formulation of Private Sector Development Plan                   

The Member from Drametsi-Ngatshang constituency questioned the Minister of Economic Affairs on the government’s pledge to formulate a comprehensive private sector development plan and the details of the plan if any.


The Minister informed that considering the importance of private sector in the economic development of the country the government has implemented various plans and programs for the development of the private sector. Under the Nu.5 billion Economic Stimulus Plan (ESP), Nu.4 billion was injected into the financial institutions to resolve the rupee problem while the remaining Nu.1 billion was invested in setting Business Opportunities and Information Center. Bhutan’s ranking in the World Bank’s ease of doing business has improved from 145 in 2013 to 75. The government has also introduced many fiscal incentives, reviewed many policies pertaining to mining, hydropower, domestic electricity tariff, public private partnership and licensing policies to name a few. The government has also developed basic infrastructure, road networks, reduced interest rates for business and introduced G2C and G2B services for the benefit of private sector development and development of mini-dry port in Phuentsholing is underway.


4. Clarification on Budget Deficit estimate for FY 2017-18

The Member from Panbang constituency said that the Budget Report 2017-18 projected a budget deficit of Nu. 4.8 billion at the end of the FY. However, the World Bank and Asian Development Bank had estimated a much higher deficit due to impact of good and services tax, delay of hydro power projects and other economic problems. He asked the Minister of Finance to inform the House on the actual estimate of the budget deficit.


The Finance Minister informed that the government is making concerted efforts to maintain the 11th FYP fiscal deficit below 3% of GDP and by the end of the plan, the current account deficit as percent of GDP is expected to improve from 25% in FY 2012-13 to 21%. He said that the GST impact is estimated at about Nu.1 billion during the FY 2017-18.  The impact of GST on revenue for FY 2017-18 is minimum as the government will be getting Excise Duty Refund (EDR) of nu. 3.03 billion. In addition, based on verification team report the actual EDR claim that has been request to the go is Nu, 4.00 billion and an additional profit range from RMA is nu 100 million and normal increase from other revenue sources is nu. 35 million making up for the impact due to GST. The Finance Minister assured that the government is doing everything to maintain budget deficit below nu. 4.8 billion by the end of FY 2017-18 as reported.


5. Delay in Payment of Subcontractors working for Punatsangchu Project

The Member from Nyishog-Saephu constituency said that it has been observed that Bhutanese contractors sub-contracting from the Indian contractors of the Punatsangchu Project have not been paid for more than six to seven months. When the contractors ask for payment they have been told that the government has not paid them or that the project has not disbursed the payments. Therefore, he asked the Economic Affairs Minister to clarify on the matter.  


The Minister informed that information received has been that, till date the payments are being made on time as per agreements drawn between the contractors. However, disbursement of payments for extra and deviated works are made only after the final assessment of the works has been carried out by the chief engineers leading to delay in payments. The Ministry has taken certain initiatives and introduced online financial management and human resource management using the  SAP-ERP program in all the three projects, Punatsangchu I, Punatsangchu II and Mangdechu power project and audit offices have been set up in each project and a regular reporting procedure has been initiated.


6. External Commercial Borrowings by Private Sector

The Member from Bomdeling-Jamkhar constituency asked the Finance Minister on the status of the government’s pledge to allow private sector to permit external commercial borrowings.


The Finance Minister reported that to permit private sectors to borrow from external sources, the government in consultation with the Royal Monetary authority and other stakeholders issued an External Commercial Borrowing guidelines in 2010 and revised in 2012.  So far Bhutan ventures hospitably Pvt Ltd. and Yangphel Private limited (Zhiwaling) have availed financing though ECB from banks outside including International Finance Corporation (IFC).


The Finance Minister informed that under the Economic Stimulus Plan Nu. 4 billion was injected into the financial institutions to create liquidity for private sector development and for the first time since the establishment of Banks in 1962, interest rates were reduced.  Foreign Direct Investment policy 2014 was also revised to improve investment climate and attract more FDIs. Fiscal Incentives Act 2017 was passed by the Parliament to stimulate economic growth and private sector development and the government also established the Better Business Council to discuss and resolve issues pertaining to private sector for improving business environment.


7. Clarification on Types of Jobs Available

The Member from Kengkhar-Weringla asked the Minister for Labor and Human Resources to clarify on the types of jobs available and why those jobs were not taken up as the Prime Minister had said that there were more jobs than the registered number of job seekers.


The Labor Minister clarified that some of jobs available were in the hydro power projects, especially experts and technicians, in fields related to agriculture and forest, Tourism, business opportunities and self-employment, construction sector, media and information and communication and in the factories. The Minister also informed that four to five new corporations have been established which have opened up avenues for employment and also in non-government organizations. However, job seekers have preference to work in government and corporations with private sector given last preference. However, jobs were not taken up mostly because of job preferences, job placement preferences and mismatch of available jobs and skills.


8. Question on reports of fuel adulteration

The Member from Wamrong constituency raised the issue of reports of mixing of kerosene with fuel at fuel stations leading to damage to the vehicles and huge cost to the vehicle owners. He said that the Ministry should conduct surprise inspection and asked the Minister for Economic Affairs on the measures taken to curb and penalties for such malpractices.


The Minister said that the relevant department carried out regular inspections of the fuel stations and each fuel station are equipped with hydro meter to test the density and quality of the fuel. He informed that in 2017, the Department of Trade had carried out fuel testing in 89 fuel stations all over the country and no adulterations were found. However, if such incidents have been occurred, he urged the concerned person to come forward and file complaints with the concerned regional offices as this is a serious offence punishable per the Penal Code and the Consumer Protection Act.


9. Introduction of pension schemes for private sector

The Member from Nganglam constituency asked the Finance Minister on the pledge made by the government to introduce pension scheme for private sector and enforce provident fund and gratuity and the benefits accrued to the people if such a system have been introduced.


The Finance Minister informed the House that till date only a small percent of the working population is covered by the National Pension and Provident Fund which include the civil servants, the armed forces and corporations. Majority of the workforce are not covered; therefore, the government is working on formulation of policy in consultation with Gross National Happiness Commission and stakeholders and hopes to finalize and implement the policy in the next three months.


10. Setting up of Fuel stations in each gewog

The Member from Nanong-Shumar Constituency questioned the Minister for Economic Affairs on the status of government pledge to set up fuel station in each gewog.


The Minister informed that there are currently 54 fuel stations in the country and 65 more are being started and is expected to be completed within December this year. He said that plans and programs have been formulated and budgeted to provide fuel stations in all the gewogs with road connection. In additions provisions have also been made to make available cooking gas from these fuel stations for the benefit of the people.


Legislative Committee Recommendations on Narcotics Drugs, Psychotropic Substance and Substance Abuse (Amendment) Bill of Bhutan 2017

The Legislative Committee Chairperson submitted the proposed amendments to Section 59 and Schedule of the Narcotics Drugs, Psychotropic Substance and Substance Abuse (Amendment) Bill of Bhutan 2017 for Third Reading to the House.


The House after some discussion came up with three more recommendations as follows:

1. The Board may amend the schedule including addition, deletion of substances in the schedule of the whole schedule and or quantification of any substance deemed to be abused or trafficked.


2. The Board in Consultation with the Parliament may amend the schedule including addition, deletion of substances in the schedule of the whole schedule and or quantification of any substance deemed to be abused or trafficked.


3. The Board may amend the schedule including addition, deletion of substances in the schedule of the whole schedule and or quantification of any substance deemed to be abused or trafficked upon the recommendation of the competent technical advisory committee formed under it.

The House agreed on the third recommendation after prolonged deliberation and to add “Tramadol” to the schedule.


The House will vote on the Bill on November 27, 2017.



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