The sit­u­a­tion of ru­pee short­ages has im­proved

Bhutan Times - - Home - Sonam Pen­jor

De­spite of hav­ing 1:1 pegged of Bhutanese Ngul­trum (Nu) with In­dian Ru­pee (INR), Bhutanese shop­per are charged 6 per­cent to 8 per­cent ex­tra if they can­not pay in INR since 2012 af­ter coun­try faces ru­pee short­ages.

Dur­ing the ques­tion and an­swer ses­sion last Fri­day, Mem­ber of Par­lia­ment from Wam­rong (MP) Karma Ten­zin ques­tioned to Fi­nance Min­is­ter re­gard­ing the short­age of INR since 2012.

He said that Nu is a legal ten­der in In­dia and its ac­cep­tance by In­dian shop keep­ers is a ma­jor con­cern be­cause of Nu and INR are pegged 1:1 and charg­ing 6 per­cent to 8 per­cent means de­val­u­at­ing of our own cur­rency, Bhutanese peo­ple get­ting INR with­out proper bills/re­ceipts/chal­lan and il­le­gal trad­ing of cur­rency.

He ques­tioned that what are the mea­sures are taken by the gov­ern­ment to ease ru­pee short­age and putting in the cor­rec­tive mea­sures.

Re­spond­ing to the ques­tions, Ly­onpo Nam­gay Dorji said that get­ting of for­eign cur­rency is not very easy. He said that dur­ing the year 2010 to 2012, the coun­try has faced ru­pee short­ages and due that gov­ern­ment has taken lots of chal­leng­ing mea­sures like ban­ning of ve­hi­cle im­port, im­ports of fur­ni­ture and al­co­hol.

Ly­onpo fur­ther added that the rea­son for the short­age of ru­pee was there since ru­pee be­longs to the other coun­try, so we have to do ex­port in or­der to earn ru­pee. He cited an ex­am­ple that by ex­port­ing elec­tric­ity to the out­side coun­try, for that we earned in terms of ru­pee but if we can­not ex­port more than the im­port, than there will be a short­age of ru­pee.

When we ex­port elec­tric­ity we earned around 11Bn, how­ever, the im­port of fos­sil fu­els it­self cost around 7Bn which is in the form of ru­pee, Ly­onpo said. He said what­ever we pur­chase from neigh­bor­ing coun­tries we have to pay in the form of ru­pee. So be­cause of that the ru­pee had to be bor­rowed and the ru­pee debt has in­creased. What it shows was that the im­port is more than the ex­port.

Although we have pro­duc­tion of agri­cul­ture and the dairy prod­ucts but still we had to im­port. Ly­onpo added that, dur­ing the year 2014, we have im­ported goods worth of around 8B. In or­der to tackle the sit­u­a­tion, Ly­onpo added that Busi­ness Op­por­tu­ni­ties and In­for­ma­tion Cen­tre (BOiC) was es­tab­lished.

Ly­onpo said that dur­ing 2014, for 2Bn the meat was im­ported and since we do not have the ru­pee we have to bor­row and when we bor­row we have to pay in­ter­est. So in or­der to im­prove new rules and reg­u­la­tions has to be im­ple­mented.

How­ever, Ly­onpo added that com­pared to 2012, the sit­u­a­tion of ru­pee short­age has im­proved; this is be­cause of im­ple­ment­ing new rules and reg­u­la­tion and by im­pos­ing taxes. He said that the gov­ern­ment is dis­cour­ag­ing to im­port of ve­hi­cle by im­pos­ing tax.

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