The present set of lawmakers need to seriously consider what they will be imperiling – should they choose not to be responsible – when they discuss the issue of vehicle quota in the coming days.
I spoke about this on this Blog some four years back – but I want to speak about it once again so that the issue remains in the public attention.
I believe that not many of the Hon’ble Members of Parliament of the NA & NC are aware of the fact that the payments for the hydropower projects – both 70% loan at 10% interest and 30% grant – do not come into the coffers of either the GNH or the Ministry of Finance. It goes directly into various bank accounts of the power projects – most likely in the Indian banks in Hasimara or Alipur Duars.
Against the above backdrop, consider that almost 70% of the fossil fuel imported by Bhutan is said to be consumed by various hydropower projects around the country. So, what is the implication here? The implication here is that this scam has long term implications the impact of which we have already felt in a variety of forms – energy trade imbalance, Rupee crisis, depleting foreign currency reserve, poor control over project fund disbursement, poor stewardship resulting in rampant corruption etc.
The vehicle quota exasperates this problem further - because every vehicle quota generates two vehicle imports - the more you import the more you compromise the hydropower benefit, if any.
In Bhutan’s context hydropower is not an end to a means – it has to be seen as a means to an end.
The Parliamentarians will do well to remember what the World Bank's economist Dr. Martin Rama said about Bhutan’s duty exemptions and tax holidays:
“…… the decline in tax revenue in relation to GDP is not due to a change in tax instruments or in tax rates, but because of policy decisions of tax holidays and exemptions. Sales Tax exemptions result in 50 percent of foregone revenue. Further around 63 percent of all imported commodities are exempted from Custom Duties.”
“Instead of losing the tax revenue to exemptions that are not rational, management of taxation could also play a vital role in attaining fiscal self-sufficiency.”
The vehicle quota debate has been going on for a long time – nothing has come of it so far. Look at what the Ex-Prime Minister had written in 2009, when he was the Opposition Leader:
There is a very nice Indian saying that goes, “Hathi ke daant dikhaane ke kuch aur khaane ke kuch aur”. Meaning: The elephant is equipped with two sets of teeth – one for display and the other to chew with.
During PDP’s five years tenure, the RSTA reported that the country recorded the highest percentage increase in new motor vehicle registrations. Obviously the PDP’s teeth that were on display was the display set.
Lets see what the DNT will display.
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