COUNTRY BACKGROUND - Gross National Happiness Commission

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Economic Outlook 8 (b) major investments which are themselves net revenue generators to the government (notably hydel schemes and the proposed Dungsum Cement Project during 7FYP). 7.17 The second category have traditionally been considered as "non-plan" projects, to proceed if funding can be secured. This approach makes sense for several reasons: - the projects are so large that their inclusion within a single capital expenditure target would distort the entire programme; - as long as they are genuinely self-liquidating (i.e. they can earn a commercial rate of return on investment), the recurrent budget constraint which limits the capital expenditure which RGOB should undertake does not apply to them; - because of their commercial potential, such projects should be able to tap funding sources which are not accessible to mainstream capital projects: competition for funding between Plan and non- Plan projects is therefore limited. 7.18 Accordingly, the expenditure projections for 7FYP focus mainly on the target for recurrent plus Planproject expenditure. Anticipated expenditures on non-Plan projects (and the funding that they require) are identified separately. However, this does not imply that these projects are less important. The overall target for (Plan Project) capital expenditure is Nu. 6980m for the 7FYP, ( in nominal prices) with a ratio of capital to recurrent expenditure being 45:55 compared with 50:50 in the 6FYP. The distribution between capital and recurrent funds is shown in Figure 7.3. Non-Plan projects amount to Nu.9,632m and include power projects and the Dungsum Cement Plant. As already noted, this figure is separate from the main Plan targets, in the sense that an increase/decrease in estimates for non-Plan projects need not affect the targets for Plan projects or for recurrent expenditure, although it does affect the total external financing requirement. Sectoral AllocationsSectoral Allocations Figure 7.4 7.19 Figure 7.4 shows the allocation of the recurrent budget between the major sectors, while the distribution of both capital and recurrent funds between the Departments is shown in more detail in Table 7.2. The social sector includes health and education and as indicated in Figure 7.4, social services have been allocated 19.8% of the recurrent budget. The recurrent budget for the social services sector will be increased substantially in the first year of the Plan as shown in Figure 7. 2. The economic services sector has a higher share, however this includes Departments such as Power and Roads, which are vital for economic development but also enable greater access to social services and improve the quality of life. Other activities in the economic sector will be revenue generating, including Power and Telecommunications, and will therefore be largely self financing. 7.20 In terms of total funds, the social services sector will receive 22.7%, increasing from 15% of the total budget in the 6FYP. The economic services sector will receive 42%: the Ministry of Agriculture 17.3%; Ministry of Trade and Industry 15.7% and the Ministry of Communications 9%. As noted already, the activities funded in the
Economic Outlook economic sector will also enhance the provision of social services. In addition, the emphasis of many programmes will be on improving the quality of service rather than on expansion of programmes. This is particularly the case for the health sector. Some expansion will take place in education, however the Government will encourage communities to establish their own schools, with financial support and provision of materials and teaching staff by the RGOB. It is envisaged that this will reduce the need for Government financing. There are also administrative functions with important development implications that will require increased resources over the Plan period: these include financial management, revenue collection and statistics. The recurrent budget for administration also includes Nu. 1,222m required for debt servicing, including principal and interest payments. V. Domestic Revenue PotentialV. Domestic Revenue Potential Table 7.3 Recurrent Expenditures and Revenue Projections for the 7FYP (Figures in Brackets in 1992/93 Prices) (Nu. million) Recurrent Expenditure 1374 (1374) Low Revenue Scenario 898 (898) High Revenue Scenario 1060 (1060) 7.21 The Royal Government's objective of recurrent budget self-sufficiency requires vigorous efforts to increase domestic revenue during 7FYP. Some of the constraints in raising additional revenues and possible revenue measures are explained in Chapter 6, Fiscal and Monetary Policy. The following paragraphs consider two revenue scenarios which are then compared with recurrent expenditure projections to identify likely financing requirements, as shown in Table 7.3. Low revenue scenarioLow revenue scenario 1992/3 1993/4 1994/5 1995/6 1996/7 7FYP Total 1529 (1389) 930 (845) 1166 (1060) 1733 (1433) 1096 (906) 1323 (1094) 1907 (1432) 2068 (1412) 8611 (7040) 7.22 The `low revenue scenario' is based on the revenue forecast made by the Department of Revenue and Customs in late 1989. The forecast has been updated to include additional revenue anticipated from several 1162 (873) 1495 (1123) 1220 (833) 1686 (1152) Deflator 1.000 0.909 0.827 0.751 0.683 Recurrent Funding Gap Low Revenue Scenario -476 (-476) High Revenue Scenario -314 (-314) -599 (-544) -363 (-329) Revenue as Percentage of Recurrent Expenditure -637 (-527) -410 (-339) -745 (-559) -412 (-309) -848 (-579) -382 (-260) 5306 (4355) 6730 (5489) -3305 (2685) -1881 (1551) Low Revenue Scenario 65% 61% 63% 61% 60% 62% High Revenue Scenario 77% 76% 76% 78% 82% 78% Growth Rates Recurrent Expenditure 32% 11.3% 13.3% 10% 8.4% Aver. 10.8% Low Revenue Scenario 3.6% 17.8% 6% 5% Aver. 8.1% High Revenue Scenario 1.1% 13.5% 13% 12.8% Aver. 12.3% Source: Planning <strong>Commission</strong> Secretariat 9
Page 1 and 2: COUNTRY BACKGROUND I. Physical Char
Page 3 and 4: COUNTRY BACKGROUND Minerals The exa
Page 5 and 6: COUNTRY BACKGROUND Bhutan is the le
Page 7 and 8: COUNTRY BACKGROUND personnel polici
Page 9 and 10: CHAPTER 2 ECONOMIC PERFORMANCEECONO
Page 11 and 12: 2: Gross Domestic Product 1980 —
Page 13 and 14: Figure 2.2 Economic Performance IV.
Page 15 and 16: Table 2.4 Government Expenditures 1
Page 17 and 18: Table 2.5 Summary of RGOB Budgetary
Page 19 and 20: Figure 2.5 Economic Performance 2.2
Page 21 and 22: Economic Performance of Infant Mort
Page 23 and 24: Approach to Development · sustaina
Page 25 and 26: Approach to Development 3.19 The fo
Page 27 and 28: Environment and Sustainable Develop
Page 29 and 30: Environment and Sustainable Develop
Page 31 and 32: Women's Involvement in Development
Page 33 and 34: CHAPTER 6 PRIVATISATION AND PUBLIC
Page 35 and 36: unacceptably high inequalities of i
Page 37 and 38: CHAPTER 7 ECONOMIC OUTLOOKECONOMIC
Page 39 and 40: Economic Outlook 7.9 This section e
Page 41 and 42: Table 7.2 Seventh Plan Outlay and S
Page 43: Figure 7.2 Figure 7.3 Capital Expen
Page 47 and 48: Economic Outlook recurrent expendit
Page 49 and 50: Financing GapFinancing Gap Table 7.
Page 51 and 52: Fiscal and Monetary Policy Table 8.
Page 53 and 54: Fiscal and Monetary Policy Strategy
Page 55 and 56: Fiscal and Monetary Policy Table 8.
Page 57 and 58: Fiscal and Monetary Policy TABLE 8.
Page 59 and 60: I. IntroductionI. Introduction CHAP
Page 61 and 62: Aid Policy 9.9 Sectoral Allocation
Page 63 and 64: Aid Policy 9.20 Sector Ministries,
Page 65 and 66: Aid Policy Aid and the Private Sect
Page 67 and 68: Culture and Religion Dratshangs and
Page 69 and 70: Culture and Religion and documented
Page 71 and 72: Culture and Religion V. Financial a
Page 73 and 74: Education Table 11.1 Educational In
Page 75 and 76: Education Higher EducationHigher Ed
Page 77 and 78: Education 11.24 In 1986, the enrolm
Page 79 and 80: Education Table 11.3 Enrolment Targ
Page 81 and 82: Education particularly of the natio
Page 83 and 84: Education writing and numeracy and
Page 85 and 86: CHAPTER 12 Human Resource Developme
Page 87 and 88: of Bhutan + Corporation Planning Co
Page 89 and 90: Joint and Public Sector IndustriesJ
Page 91 and 92: Table 12.5 Sectoral Training Funded
Page 93 and 94: Human Resource Development IV. Manp
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CHAPTER 13 HEALTH SERVICESHEALTH SE
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Table 13.2 Health Institutions July
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A. Objectives and Strategies in the
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Table 13.5 Goals for Children and W
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Health Services IV. Health Sector P
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Mother and Child Health (MCH)Mother
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TOTALS FOR Health 1992/93 1993/94 1
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Human Settlements Chhukha. Certifie
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Human Settlements Lack of Skilled M
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Human Settlements only a fraction -
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Human Settlements awareness of the
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CHAPTER 15 TRANSPORT SECTORTRANSPOR
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Table 15.2 Passenger Carriage by Dr
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Civil AviationCivil Aviation Transp
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Transport Sector 15.25 In the 7FYP,
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Transport Sector target for formati
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Transport Sector 11
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CHAPTER 16 COMMUNICATIONS SECTORCOM
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Table 16.1 Telephone Facilities 199
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A. Objectives for the 7FYPA. Object
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Communications Sector Dzongkhags -D
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TOTALS FOR Department of Post, Tele
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Renewable Natural Resources Table 1
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Renewable Natural Resources earning
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Renewable Natural Resources 17.27 T
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Renewable Natural Resources Table 1
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Renewable Natural Resources coopera
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Renewable Natural Resources Institu
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Renewable Natural Resources 17.67 A
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Renewable Natural Resources Wildlif
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Renewable Natural Resources TOTALS
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Chapter 18 MANUFACTURING AND TRADEM
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18.8 (see Chapter 19 on Mineral Dev
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Input supplyInput supply Manufactur
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Manufacturing and Trade Polythene P
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Manufacturing and Trade Formulation
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Manufacturing and Trade V. Financia
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Mineral Development Coal mining and
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Mineral Development Table 19.2 Esti
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Mineral Development be purchased: 3
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CHAPTER 20 ENERGY SECTORENERGY SECT
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Exports and ImportsExports and Impo
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Energy Sector 20.21 Most of the rur
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shortages. Energy Sector 20.34 Alte
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Energy Sector items will include pu
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COUNTRY BACKGROUND - Gross National Happiness Commission

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