The situation of rupee shortages has improved
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.