The Chairperson of the Economic and Finance Committee (EFC), Member from Choekhor-Tang Constituency, presented the Committee’s Review Report on the Budget Appropriation Bill for FY 2026–2027 and the Supplementary Budget Appropriation Bill for FY 2025–2026.

The Committee submitted the following key observations and recommendations:

1. Supplementary Budget Appropriation for FY 2025–2026 The Committee noted that the proposed supplementary budget incorporation of Nu. 1,211.846 million was in accordance with the relevant laws and regulations and recommended its approval as proposed.

2. Fiscal Deficit and Macro-Fiscal Stability To reduce the fiscal deficit to 4 percent of GDP, the Committee recommended that the Government rationalize and prioritize public expenditure by sequencing capital projects based on economic returns, implementation readiness, and national priorities, while deferring non-essential and low-priority expenditures.

3. Non-Hydro External Debt and Foreign Exchange Risks The Committee recommended periodic stress testing of external debt under adverse exchange rate scenarios and the adoption of measures to mitigate foreign exchange exposure risks. It further emphasized directing external borrowings toward productive and growth-enhancing sectors capable of generating long-term economic returns.

4. Inflation and Cost of Living The Committee recommended a balanced approach that promotes economic growth while containing inflation. Suggested measures included strengthening domestic production, enhancing food security, improving supply chains, reducing import dependency, supporting productivity growth, implementing effective GST transition strategies, enhancing market surveillance and price monitoring, expanding affordable housing initiatives, and developing inflation mitigation strategies.

5. Capital Budget Utilization The Committee recommended strengthening mechanisms to ensure optimal utilization of the capital budget through adequate human resource deployment, periodic monitoring, and enhanced accountability measures to improve both expenditure efficiency and quality of implementation.

6. Performance-Based Grant System for Gewogs The Committee recommended reviewing and strengthening the implementation framework of the performance-based grant system to ensure fairness, inclusiveness, and balanced regional development. It further proposed extending a similar performance-based approach to Dzongkhags and central agencies and ensuring adequate human resources for effective implementation.

7. Performance of State-Owned Enterprises (SoEs) In accordance with Section 79 of the Public Finance Act 2007, the Committee recommended a comprehensive performance review of Bhutan Livestock Development Corporation Limited (BLDCL) and, where appropriate, consideration of privatization or divestment in line with the provisions of the Act.

8. Rural Life Insurance Scheme (RLIS) The Committee recommended that the Government institutionalize and ensure consistency in budget allocations for the Rural Life Insurance Scheme to enhance accountability, transparency, and effective implementation. Given the broader implications relating to the scheme’s viability and sustainability, the Committee tabled the matter for further deliberation by the House.

9. Establishment of Farm Shops The Committee recommended conducting a comprehensive assessment of previous farm shop initiatives, including an analysis of operational and financial challenges, before committing additional investments. It also suggested exploring partnerships with the private sector to deliver similar services more effectively.

10. Resurfacing of the Dochula–Wangdue Primary National Highway The Committee recommended the proposed budget allocation of Nu. 111.873 million for road resurfacing be deferred or reconsidered pending a reassessment of the urgency of the work based on the current condition of the highway.

11. Tourism Sector Development Recognizing the tourism sector’s significant economic potential and the need for its continued recovery and expansion, the Committee recommended an additional allocation of Nu. 39 million to support priority interventions and accelerate sectoral growth.

Following the presentation, the House deliberated on the Committee’s observations and recommendations concerning both the National Budget for FY 2026–2027 and the Supplementary Budget for FY 2025–2026. While the House endorsed Recommendation No. 1, it directed the Economic and Finance Committee and the Finance Minister to further review recommendations on reduction of fiscal deficit to 4 % for further deliberation the next day.