𝐏𝐚𝐫𝐥𝐢𝐚𝐦𝐞𝐧𝐭 𝐑𝐚𝐢𝐬𝐞𝐬 𝐑𝐞𝐝 𝐅𝐥𝐚𝐠𝐬 𝐎𝐯𝐞𝐫 𝐒𝐩𝐞𝐧𝐝𝐢𝐧𝐠 𝐀𝐧𝐝 𝐏𝐨𝐥𝐢𝐜𝐲 𝐂𝐡𝐨𝐢𝐜𝐞𝐬 𝐈𝐧 𝐅𝐘 𝟐𝟎𝟐𝟓-𝟐𝟔 𝐁𝐮𝐝𝐠𝐞𝐭

…𝒍𝒂𝒘𝒎𝒂𝒌𝒆𝒓𝒔 𝒒𝒖𝒆𝒔𝒕𝒊𝒐𝒏 𝒅𝒆𝒇𝒊𝒄𝒊𝒕 𝒍𝒆𝒗𝒆𝒍𝒔, 𝒄𝒐𝒎𝒎𝒆𝒓𝒄𝒊𝒂𝒍 𝒗𝒆𝒏𝒕𝒖𝒓𝒆𝒔 𝒂𝒏𝒅 𝒂𝒄𝒄𝒐𝒖𝒏𝒕𝒂𝒃𝒊𝒍𝒊𝒕𝒚 𝒊𝒏 𝒑𝒖𝒃𝒍𝒊𝒄 𝒔𝒑𝒆𝒏𝒅𝒊𝒏𝒈

By Yeshi Dolma

During the 4th Session of the Fourth Parliament, lawmakers engaged in rigorous scrutiny of the FY 2025–26 national budget, raising concerns over a proposed fiscal deficit of 6.2 percent of Gross Domestic Product (GDP), government-led commercial ventures, and the transparency of social and infrastructure programmes. Finance Minister Lekey Dorji defended the government’s approach, citing fiscal consolidation measures and increased domestic revenue, while ministers across sectors justified allocations intended to strengthen food security, support youth employment, and deliver social welfare. Parliament’s debate highlighted the ongoing challenge of balancing ambitious development priorities with financial discipline and accountability, stressing the critical role of legislative oversight in public resource management.

Finance Minister Lekey Dorji presented the government’s responses to observations made by the parliamentary committee, emphasising ongoing fiscal consolidation efforts while defending key allocations questioned by the House.
A central focus of the session was the proposed fiscal deficit, set at 6.2 percent of GDP, amounting to Nu.21,438.69 million. Members of Parliament expressed concern that a deficit of this scale could fuel inflationary pressures and constrain borrowing space for private sector development. The committee recommended reducing the deficit to five percent or below. Although the House adopted this recommendation, the approved budget continued to reflect a 6.2 percent deficit.

Responding to these concerns, Minister Dorji defended the government’s fiscal approach, stating that consolidation measures were already producing results. “We are regulating government spending and have seen an increase in domestic revenue,” he said. According to the Ministry of Finance, internal resources for FY 2025-26 increased by Nu.4,151.42 million in the first quarter, bringing the deficit down from 6.2 percent to 4.4 percent within a short period.
Agriculture and food security programmes drew significant scrutiny, particularly proposed allocations of Nu.149.12 million for two commercial Chirup farms and two mega strawberry farms under the Ministry of Agriculture and Livestock. Parliamentarians questioned the rationale for government-led commercial ventures, arguing that such initiatives ran counter to international best practices and Bhutan’s policy of leaving commercial activities to the private sector. Concerns were also raised that similar projects in the past had yielded limited returns.

In response, Agriculture Minister Younten Phuntsho submitted a detailed justification, stating that the farms were intended to strengthen national food security, reduce import dependency and create employment opportunities for youth. The Chirup farms established in Samrang and Pemathang are expected to produce around 575 metric tonnes of vegetables and fruits annually, primarily to supply five Gyalsung Academies catering to approximately 17,500 cadets and staff.

“These farms will not only contribute to national food security but also serve as models for modern agricultural practices in neighbouring communities,” he explained, adding that the initiative aligned with national agricultural output targets.

The strawberry farms, partially funded through European Union grants, are aimed at promoting high value agricultural products for export markets. While the 13th Five Year Plan identified Thimphu and Paro as primary sites, the Ministry expanded the programme to Wangdue, Haa, Punakha and Bumthang based on crop suitability. Despite initial challenges in securing farmer participation, seven farmers committed to semi automated greenhouse production under a cost sharing arrangement.

The session also examined the General Reserve, which accounts for more than Nu.4 billion. The committee sought assurances that these funds would not be misused. Minister Dorji clarified that all allocations were governed by constitutional provisions and the Public Finance Act, with utilisation guided by the General Reserve Guidelines 2022. “The General Reserve is audited and reviewed by the Royal Audit Authority. This ensures that all expenditures are transparent, compliant with the guidelines and properly accounted for. Robust checks and balances are in place to safeguard the prudent and accountable use of the reserve,” he said.

Other contested allocations included the Rural Life Insurance Scheme, for which Nu.263 million was earmarked under the General Reserve in addition to Nu.70.1 million under grants and subsidies. Parliamentarians raised concerns over the absence of a clear study identifying beneficiaries, premium structures and overall impact. While the House retained the allocation, the Ministry of Finance committed to establishing a multi sectoral Steering Committee to introduce a modernised income means tested approach using the National Digital Identity platform, with the aim of maintaining universal access while ensuring equitable use of public funds.

Similarly, the Third Child Policy allocation of Nu.31.5 million came under scrutiny, with members questioning the lack of prior studies on its necessity and implementation. The Ministry defended the allocation as a response to declining fertility rates and an ageing population. The programme, scheduled to begin on February 5, 2026, will provide cash support for third living children, including legally adopted children, through a coordinated multi agency delivery platform. Minister Dorji stated that the initiative would be implemented transparently and efficiently, with safeguards to ensure programme integrity and child centred delivery.

Budget management of centrally executed capital programmes was another area of concern. Parliament noted that Nu.11,321.4 million had been allocated for centrally executed projects benefiting local governments, including schools, hospitals and national highways. Lawmakers raised issues related to the longstanding deposit work practice, which had previously resulted in inefficiencies and weak financial accountability. Minister Dorji explained that central execution was necessary where technical capacity exceeded that of local governments, and that direct allocations were made only where local governments had demonstrated implementation capability.

The tourism sector also featured prominently in the debate, particularly the Nu.49.5 million allocation for airfare subsidies aimed at achieving 250,000 tourist arrivals. Parliamentarians argued that the subsidy contradicted the High Value Low Volume tourism policy and lacked evidence of effectiveness. Following the House’s adoption of the committee’s recommendation, the allocation was removed from the Budget Appropriation Act FY 2025-26. However, airlines had already incurred costs for prior bookings, prompting the government to seek parliamentary approval for payments totalling Nu.49.9 million for subsidies already utilised.

The Priority Development Fund, proposed with an allocation of Nu.94 million to support constituency level initiatives, was also discussed. Parliament recommended mobilising additional resources to prevent negative impacts on Gewog development objectives. As the FY 2025-26 budget documents did not make a specific allocation for this fund, no further action was required, though the discussion highlighted ongoing challenges in balancing national planning with local development needs.

Capital budget under-utilisation emerged as a persistent concern, with nearly 40 percent of allocated funds remaining un-utilised in FY 2024-25. Minister Dorji outlined corrective measures, including quarterly monitoring, performance dashboards under the MAX system and the integration of financial indicators into agency performance assessments. He reported that audited capital budget utilisation for FY 2024-25 stood at 87.76 percent against the revised budget, indicating early improvements.

Allocations for the National Land Commission were also reviewed, particularly funding related to correcting anomalies arising from the Property Tax Act of 2022. Parliament observed that only modest increases had been made despite earlier government commitments. Minister Dorji said coordination was ongoing with relevant agencies to conduct field surveys, collect accurate land data and address discrepancies, with urgent funding needs to be considered during the Mid Term Review.

Infrastructure projects were subject to similar scrutiny. The proposed 500 KW mini hydropower project in Lunana, with a budget of Nu.337.280 million, was questioned on the grounds that such projects typically fall under the Druk Green Power Corporation. While dialogue and possible reassignment were recommended, the House did not adopt the proposal, and the project will proceed under the Ministry of Energy and Natural Resources in collaboration with DGPC. Survey work has been completed, public clearances are underway and the project is expected to be awarded by March 2026.

The broader issue of local government autonomy in budgetary allocation was also debated. The current ten percent cap on annual grants for cultural and religious preservation was criticised for limiting smaller Gewogs with constrained resources. Although a proposal to raise the ceiling to 20 percent was considered, it was not adopted, leaving the existing framework unchanged.

The 4th Session of the Fourth Parliament thus presented a comprehensive picture of fiscal governance and parliamentary oversight. Lawmakers questioned the necessity and effectiveness of government intervention in commercial activities, examined social protection schemes and infrastructure investments, and highlighted the importance of transparency, accountability and adherence to constitutional and legislative frameworks.
“The government is committed to aligning budget decisions with national priorities and ensuring that public resources are deployed efficiently and transparently,” Minister Dorji said.

“While challenges persist, measures are in place to ensure accountability, effective project execution and the equitable delivery of social and economic programmes across the nation.”
As the fiscal year progresses, the outcomes of these initiatives, ranging from commercial farms and social insurance schemes to infrastructure development and capital budget utilisation, are expected to test the government’s ability to balance developmental imperatives with fiscal discipline, reinforcing the role of parliamentary scrutiny in public financial management.