Bhutan: Multi-year rolling budget system to be introduced in 13th Plan


The 13th Plan, the concept paper of which has been drafted by the Gross National Happiness Commission (GNHC), will have major changes in the planning and budgeting system.

One of most significant changes will be that programmes will be short-term to multi-year rolling (medium-term) in nature. This means that a capital budget for two years or more can be passed in Parliament at once.

Today a budget is passed for a year.

Finance Minister Namgay Tshering said that the multi-year rolling budget is aimed at ensuring greater flexibility and doing away with the shortcomings in the current planning and budgeting system. Citing an example, the finance minister who is also the vice-chairperson of the GNHC, said that the budget had to be surrendered to the finance ministry when activities got delayed. He said the quality of works also got hampered as the budget had to be utilised within the 12-month fiscal year.

“If a budget is given to be used in two years, then there will be fewer chances of the budget lapsing. The quality of work will also improve,” he said.

The new system, he said, would provide space for allocation of performance-based grants to agencies, including local governments.

This means that if a two-year budget is implemented within a year, then the agency will be eligible for an additional budget. Lyonpo Namgay Tshering said that the ministry was carrying out the reform exercise in the budgeting system while the GNHC had started work on the 13th Plan.

The government had earlier said that it would do away with the five-year-plan system.

The Plan, officials say, will leave rooms for the government to accommodate immediate priorities without losing focus on the long-term goals.

The long-term activities would be of “high-impact programmes and projects of national importance” that span over more than one Plan period. The finance minister explained that such programmes would include large projects that will have high returns such as the hydropower projects. “They may be inside or outside the regular budget.”

However, the officials said that the process of drafting the Plan was in early stages.

The 13th Plan will coincide with the country’s graduation from the group of Least Developed Countries (LDC) in 2023. A new government or government term will be in place.

The Plan, according to the government, would emphasise on economic growth and employment generation through growth promoting policy reforms and programmes. In his State of the Nation report, Prime Minister Dr Lotay Tshering said the 13th Plan will draw inspiration from the timeless Royal visions and the Constitution.

“The planning framework for the 13th FYP will be designed to ensure sharper focus, greater flexibility and systemic transformation. It will be pursued through two programme designs,” he stated.

The government aims to strengthen the national monitoring and evaluation system to ensure effective implementation and delivery of results and enhance greater accountability.

Officials familiar with the process of drafting a Plan said the process was lengthy and that the plans of local governments and the central government needed to be combined. It was learnt that the GNHC has presented the 13th Plan concept paper to the government and some parliamentarians.

A GNHC official said that there was time for drafting the 13th Plan. He said that consultations with stakeholders and budgeting agencies will be carried out.

The GNHC had initiated an in-house assessment that presented scopes for improvements in our current planning system on the design, approach and operations fronts.

However, the findings of the assessment do not represent the views of the commission but that they would be looked into, the official said. The assessment report recommends that the overall planning approach will need to be driven by an overarching long-term strategy spanning up to 15 years.

The programmes, it states, should envision the future path of the country and accordingly identifies priority areas that meet the visions.

It states that all plans need to be driven by a long-term vision which will be a guiding direction for where Bhutan will head in the next few years.

For this, there needs to be a consolidation of sector vision documents and roadmaps, which will portray a clear illustration of the country in the next 10 to 15 years. “Currently there are different sector roadmaps and visions but there is no consolidation of these visions,” the report states.