It is pru­dent to en­act a public debt man­age­ment act: PAC

Bhutan Times - - Front Page - Biku Gu­rung

The Chair­per­son of the Public Ac­counts Com­mit­tee (PAC) and mem­ber of the Par­lia­ment from Nganglam Choida Jamt­sho pre­sented the re­port of the Royal Au­dit Author­ity (RAA) on public debt man­age­ment to the joint sit­ting of Par­lia­ment. The re­port was re­viewed by the PAC con­sid­er­ing sig­nif­i­cant au­dit find­ings.

It is re­ported that the public debt pro­jec­tions in­di­cated in­creas­ing trend as of now. It came by the end of the pe­riod, the public debt fig­ure pro­jected to be Nu 258,796.410m and debt to GDP ra­tio will be over 120 per­cent.

Public Ac­counts Com­mit­tee (PAC) re­ported the In­dian Ru­pee debt will con­sti­tute over 73 per­cent of the to­tal public debt and also the pro­jec­tions in public debt fig­ures dur­ing the pe­riod along with the GDP.

Out of the public debt pro­jec­tions for the pe­riod 2013-14 to 2017-18, the cur­rent sce­nario by the end of March 2015 the public debt pro­jected to the nom­i­nal GDP of Nu 124,534.74 mil­lion, the to­tal public debt to Nu 118,546.62m (95.20% of GDP), ex­ter­nal debt of Nu 114,071.32m (91.60% of GDP), Do­mes­tic debt of Nu 4,475.30m, hy­dro power debt to Nu 81,580.38m (65.5% of GDP) with the ru­pee debt Nu 78,148.22m (62.80% of GDP) ac­cord­ing to the re­port of the Public Ac­counts Com­mit­tee (PAC) so far.

PAC com­ments as per the cur­rent sta­tus re­port on im­ple­men­ta­tion of the rec­om­men­da­tions of the Royal Au­dit Author­ity (RAA), the Min­istry of Fi­nance (MoF) has agreed on all 33 rec­om­men­da­tions and is cur­rently work­ing on them to re­solve the is­sues raised in the au­dit re­port.

To the re­view on PAC’s au­dit re­port on public debt sit­u­a­tion in Bhutan, the RAA had con­ducted a re­view public debt sit­u­a­tion in three plan pe­ri­ods, the first one 9th Five Year Plan (200304/2007-08), the sec­ond 10th FYP (2008-09/201213) and pro­jected 11th FYP (2013-14/2017-18). The to­tal debt stock in­clud­ing var­i­ous gov­ern- ment guar­an­tees stood at Nu 97,094.12m as of 30th June 2013.

It is said the MoF has drafted a Public Debt Pol­icy in col­lab­o­ra­tion with Min­istry of Eco­nomic Af­fairs, Royal Mon­e­tary Author­ity, Gross Na­tional Hap­pi­ness Com­mis­sion and Na­tional Sta­tis­ti­cal Bureau which seeks to ad­dress ma­jor­ity of the rec­om­men­da­tions made by RAA in­clud­ing the debt ceil­ing.

PAC com­ments that there are dif­fer­ent in­sti­tu­tions man­ag­ing dif­fer­ent loans availed or guar­an­teed by the gov­ern­ment in-or­der to har­mo­nize the ex­ist­ing laws; Fi­nance Min­istry is hold­ing dis­cus­sions with the dif­fer­ent au­thor­i­ties.

The com­mit­tee com­mented the hy­dro power debt may be con­sid­ered as self- liq­ui­dat­ing as in­di­cated in the In­ter­na­tional Mon­e­tary Fund and World Bank Re­port. The hy­dro power debt shows an in­creas­ing trend due to change in fund­ing pat­tern.

As Bhutan now ranks mid­dle in­come coun­try from low in­come coun­try, hence­forth there will be less flow of aid from the de­vel­oped coun­tries and loans would be more on strin­gent terms. Against this back­drop, the in­creas­ing trend in the non-hy­dro debt with­out a com­men­su­rate in­crease in do­mes­tic rev­enue is a con­cern, the com­mit­tee has added.

They also com­mented that most of the growth is based on loans and grants, rather be­ing fi­nanced through sav­ings and rev­enue gen­er­a­tions.

How­ever, PAC rec­om­mends the MoF and rel­e­vant agen­cies to im­ple­ment the rec­om­men­da­tions made by RAA on a pri­or­ity ba­sis and sub­mit an Ac­tion Taken Re­port to the PAC.

Apart from the rec­om­men­da­tions made by the RAA, PAC rec­om­mends that it would be pru­dent to en­act a public debt man­age­ment act that will en­hance the man­age­ment of debt and con­fer legal author­ity to the public debt pol­icy, with the in­creas­ing non-hy­dro debt; there is a need to di­ver­sify the rev­enue base.

They have also a rec­om­men­da­tion to in­ten­sify ef­forts to in­crease na­tional sav­ings to fi­nance growth and re­duce the de­pen­dence on grants and loan. PAC sup­ports the up gra­da­tion of the Debt Man­age­ment Di­vi­sion to a depart­ment with the req­ui­site tech­ni­cal ex­per­tise in or­der to con­sol­i­date all the debt re­lated func­tions which are presently frag­mented.

The re­port also in­di­cated that PAC sup­ports the up -gra­da­tion of the Debt Man­age­ment Di­vi­sion to a Depart­ment with the req­ui­site tech­ni­cal ex­per­tise.

The joint sit­ting will de­lib­er­ate on the re­port to­mor­row.

Newspapers in English

Newspapers from Bhutan

© PressReader. All rights reserved.