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• The Royal Civil Service Commission and the Ministry of Finance has jointly launched the piloting of Cluster Finance Services in Bumthang on 20th April, 2021.
• The joint launch was attended by Hon’ble Finance Secretary and Hon’ble Focal Commissioner for MoF, Royal Civil Service Commission.

• The Cluster Finance Services is the collaborative initiative of the Royal Civil Service Commission and the Ministry of Finance.

• The objective of this initiative is based on the concept of sharing of services by leveraging the use of ICT.

• It will bring together all finance personnel working in various regional/autonomous/branch offices under one cluster office in each region/Dzongkhag. However, this initiative does not include the Finance Sections of the Dzongkhag administration.
• All finance services would be catered from the office of Cluster Finance Services irrespective of the location of the agencies.

• The initiative will optimize and rationalize the deployment of finance personnel and eliminate the current practice of their placement in individual agencies and achieve the objective of doing more with less.

• This initiative is expected to enhance prudent fiscal discipline through proper check and control mechanism, and institute adequate internal control system in the agencies.

• It is also expected to improve the performance and delivery of finance services through enhanced efficiency of finance personnel and standardized service delivery across agencies.
• The Cluster Finance Services is expected to contribute towards restructuring the budget process and financial norms as enshrined in the Royal Kasho on Civil Service Reform.

• This initiative was also launched for the regional offices under Paro Dzongkhag on 8th April 2021. It will be implemented on pilot basis for regional offices under Bumthang and Paro Dzongkhags until June this year and will be rolled out in Thimphu and other Dzongkhags in a phased manner from July 2021.
• The pilot initiative is being carried out with the financial support of multi-donor fund (MDF) contributed by the European Union (EU) and Austrian Development Agency (ADA), and administered by the World Bank (WB).

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• The Ministry of Finance in coordination with the Royal Civil Service Commission has launched the piloting of Cluster Finance Services in Paro and Bumthang Dzongkhags.
• Hon’ble Finance Minister, Lyonpo Namgay Tshering graced the launch event at Paro on 8^th April, 2021.

• This initiative is carried out as a part of overall public financial management (PFM) reforms to strengthen fiscal discipline and to provide efficient finance and accounting services in budgetary bodies.

• The objective of this initiative is based on the concept of sharing of services.

• It will bring together all finance personnel working in various regional/autonomous/branch offices under one cluster office in each region/Dzongkhag. However, this initiative does not include the Finance Sections of the Dzongkhag administration.

• All finance services would be catered from the office of Cluster Finance Services irrespective of the location of the agencies.

• The initiative will optimize and rationalize the deployment of finance personnel and eliminate the current practice of their placement in individual agencies.

• This initiative is expected to enhance prudent fiscal discipline through proper check and control mechanism, and institute adequate internal control system in the agencies.

• It is also expected to improve the performance and delivery of finance services through enhanced efficiency of finance personnel and standardized service delivery across agencies.

• This initiative will be implemented on pilot basis for regional offices under Paro and Bumthang Dzongkhags until June this year and will be rolled out in Thimphu and other Dzongkhags in a phased manner from July 2021.

• The pilot initiative is being carried out with the financial support of multi-donor fund (MDF) contributed by the European Union (EU) and Austrian Development Agency (ADA), and administered by the World Bank (WB).

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The Annual Royal Civil Service Award 2020 of the Ministry of Finance was held on December 14, 2020. The award ceremony was graced by Hon’ble Dasho Secretary, Ministry of Finance.

The award ceremony was conducted to fulfill the noble wishes of His Majesty the Druk Gyalpo to recognize the utmost dedication and loyalty of civil servants and their outstanding contribution to the TSA-Wa-Sum. It was also to remind them of their greater responsibilities that they need to shoulder for the nation. For this year, there were total of 244 medal and certificate recipients in the following categories:

1.     Lifetime Service Award – 25 recipients.

2.     Gold Medal for 30 years Service- 12 recipients

3.    Silver Medal for 20 years Service -42

4.     Bronze Medal for 10 Service -165

The Ministry would like to congratulate and convey our heartfelt wishes to each award recipient for their commitment, hard work and dedication to Tsa-Wa-Sum.

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The RMA transferred Nu. 2,001 million as surplus to the Royal Government of Bhutan on 29th October, 2020. The RMA closed the books of accounts for the Financial Year 2019-2020 with a surplus of Nu. 1,769,391,841.67. Given the current situation of the Government experiencing decline in the revenue due to the pandemic, the RMA management and staff voluntarily surrendered performance linked incentives of Nu.15.20 million and retained earnings of Nu.216.40 million for the financial year 2019-2020 totaling to Nu.2,001 million as surplus transferred to Royal Government of Bhutan.

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Recognizing the private sector as a critical partner for the economic growth, the Government has always placed high importance on the private sector. Further, to enhance access to financing, the Government has launched the National Credit Guarantee Scheme (NCGS), as a counter cyclical policy measure during the COVID-19 pandemic situation on October 5th 2020. It will sustain investments by easing access to credit during the COVID-19 times. The NCGS is an intervention under which the Government guarantees a portion of the loans availed for establishing a viable business entity.

Growth in domestic credit is critical for investments, boosting domestic demand and generating employment. However, collateral requirement has been a major impediment, in particular, for aspiring entrepreneurs to avail financing. Therefore, the NCGS will alleviate this challenge of aspiring entrepreneurs. Under the NCGS, for availing loans, Cottage and Small category will not require collateral except 10% equity and startups under this category will be eligible for 100 percent debt financing under the NCGS.
Unlike practices across the globe, the medium and large categories will also be eligible for loans under the NCGS. However, under such categories, a loan financing up to 50% or Nu 30 million, whichever is lower will be guaranteed by the Government and the balance will be shared between the lender and the borrower.

In addition, CGS will also be available for up-gradation of businesses from CSI to medium and medium to large.
Therefore, the NCGS has been designed to be an inclusive instrument for all categories of industries.
The projects under the NCGS will focus on the following thrust areas of:

• Boosting exports;
• Reducing economic dependency by investing in import substitution-based projects;
• Promoting innovation and technology; and
• Creating jobs to absorb the displaced and unemployed.

Implementations:

• The NCGS will be implemented under the overall guidance of a National Credit Guarantee Committee, which will be chaired by the Finance Minister with representative from key economic sectors;
• The NCGS will be implemented in partnership with the State-owned Banks, namely Bank of Bhutan, Bhutan Development Bank and the National CSI Development Bank (NCSIDBL); and
• A full time NCG Support Facility (NCGSF) will be established with the NCSIDBL, to provide all necessary support in availing loans and implementing projects under the NCGS.

Conclusion:

Under the COVID-19 Pandemic situation, the NCGS will go a long way in securing financing for the establishment of viable new business entities besides supporting the upgradation of existing businesses.
There will be challenges and risks in the journey of implementing the NCGS. Globally, monitoring and support mechanisms of such initiatives have been critical in determining the success of such schemes. While the government will ensure that and fulfill its responsibility to create the environment and platform, we urge the private sector to grab the opportunity, with responsibility. Through collaboration with responsibility, the investments that emerge as a result of the NCGS shall sustain economic activities, and turn aspirations into a reality for a resilient economy.

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