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India's assistance to the Eleventh Five - Year Plan...
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India's assistance to the Eleventh Five -Year Plan (2013-2018) of RGoB

During the visit of the Prime Minister of Bhutan, Lyonchhen Tshering Tobgay to India from August 30 to September 4, 2013, Government of India's Assistance Package for Bhutan's 11th Five Year Plan (July 2013 to June  2018), was decided . At Bhutan's request, India agreed to contribute Rs 4500 Crores.  For the current Five Year Plan of Bhutan, out of the total committed external assistance of Nu/Rs 6600 cr.; India’s contribution of Rs. 4500 cr., represents about 68% of the total external assistance and 49% of the capital expenditure of RGOB’s Nu 9200 cr.

Additionally, GOI agreed to provide Rs. 500 Crore as Economic Stimulus Package, to boost the Bhutanese economy and help RGOB overcome the problems arising out of the acute INR shortage.

Out of the Rs. 4500 crore, Rs. 2800 Cr., will be provided as Project Tied Assistance (PTA) for funding 86 mutually agreed projects covering major priority sectors of socio-economic development like roads and bridges; education (schools); education (tertiary); health and construction of regional hospitals; engineering services; industries; energy; security; agriculture; livestock; judiciary; civil aviation; roads and urban transport; sports; culture; ICT & e-governance; scholarships and trainings, HRD etc.

Rs. 850 Cr will be allocated for funding Small Development Projects (SDP).  These projects are short gestation and community-oriented, focusing mainly on drinking water schemes, schools in rural areas, irrigation canals, farm roads, gewog connectivity roads, RNR centres, basic health units and staff quarters, market sheds,  community meeting halls and other basic infrastructure in rural areas. Such projects are becoming increasingly popular with village communities actually identifying them, on the basis of their needs and requirements. Having a direct bearing on the lives of the grassroots people, these projects have become an effective tool for addressing rural poverty.

The remaining Rs. 850 Cr is provided as Programme Grant (Development Subsidy) to the RGOB. Programme Grant is released in quarterly installments of Rs. 42.5 cr.

There are several institutionalized mechanisms to decide on the projects, and monitor their implementation and progress. The Annual Plan Talks or India-Bhutan Development Cooperation Talks is the overarching mechanism for discussing India's bilateral assistance to RGOB, including PTA, Programme Grant, SDP, Excise Duty Refund, ESP etc. Separately, to monitor implementation and fast track progress of PTA projects, there is a Project Monitoring Committee (PMC). In addition to this, in September 2014, during the 3rd Plan Talks, the two sides decided to form a Sub-Committee to the PMC to closely monitoring the implementation of PTA projects. The sub-committee which is to meet every two months, held its first meeting on 18th November.

Similarly, for deciding the Small Development Projects, which are undertaken in batches, there is a Small Development Project Committee (SDPC), which meets every 6 to 8 months. Under the 11th Plan, two batches of projects numbering 303, have been agreed upon for implementation. To monitor the progress of these projects, the last SDPC meeting decided to set up a sub-committee that will meet every two months. The first meeting is scheduled to be held in January 2015.

GoI also provides subsidies on Kerosene/LPG and excise duty refund to RGoB on imports from India on an annual basis.




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