Against the campaigners of the Gross National Happiness to drive Bhutan to the path of self reliance, the size of debt has overburdened the country, exceeding the national economy by 12 per cent. According to Royal Monetary Authority (RMA), the country’s debt to GDP ratio stands at 112 per cent. The World Bank projects the debt would increase to 121 percent by 2016-17 fiscal year.
Country’s GDP is Nu 104B while the debt has increased to Nu 114B. RMA said it was at 108 per cent in September. And more than three quarter of the debts are payable to India (in rupees). RMA’s annual report states, hydropower loans accounts for 83.4 per cent of the outstanding rupee loan.
The government has cleared about Rs 15.6B loan undertaken from various arrangements with India, but owes Rs 10B, which was borrowed from GoI line of credit and is due this month. Bhutan does not have any regulations in place regarding the threshold limit for borrowing the loans.
The government-formed working committee to draft debt policy hasn’t come yet with the draft even after eight months.