FYP: Bhutan’s first five-year development plan (1961-66), entirely funded by the government of India, had an outlay of Indian rupee (INR) 174.7M, with more than INR 100M earmarked for building roads, such as the Thimphu-Phuentsholing highway.
But only about INR 107M was utilized, according to records available on the website of the Gross National Happiness commission (GNHC), formerly the planning commission.
Shortage of trained technical personnel and not too many interested to come and work in an extremely remote location from the open market in India hampered implementing the plan.
Shortage of local labour and insufficiency of rations for employment of imported labour was another hurdle. This was partly overcome by a quota of 200 metric tonnes of grain a month provided by the India, which enabled employing a labour force of 7,000 at any time.
The Plan was also considerably set back by what is described as the ‘Chinese incursion’ in 1962.
The local agrarian economy also took a hit. While Bhutan was self-sufficient in cereal, with a small surplus exported to Tibet, the closure of the Tibetan border had, to some extent, destroyed the incentive to produce surplus. The diversion of available manpower to defense as well as development seriously affected the agricultural output.
The influx of large numbers of workers for development activities further affected the economy and the cost of eggs, grain, vegetables tripled and quadrupled in the plan period. Development money had been mainly ‘frittered away’ in the purchase of consumer goods, which contributed little to developing the economy.
The second plan (1966-71), had an outlay of Rs 220M of which about Rs 200M was spent. Both the first and second plans, which were entirely financed by India, focused on creating basic infrastructure like roads, power, transport and communication.
In the first two plans, the 180 km Thimphu-Phuentsholing highway was built and opened and most of the 520km east-west lateral highway had been completed. The hydel projects at Thimphu, Paro and Wangduephodrang were also completed, and the foothill towns were linked with power supply from Assam, while detailed investigations were undertaken for the Chukha project.
In the second plan, the budget for the road sector dropped to 40 percent of the overall outlay, and agriculture became a priority sector, receiving 10 percent of the budget.
In the third plan (1971-76), which had an outlay of Rs 355M, the budget share of the road sector further fell to 20 percent. Health and education became priorities, with an eight percent and 19 percent outlay. Agriculture received 17 percent.
It was in the third plan that Bhutan for the first time met some part of the plan expenditure through domestic resources to the tune of Rs 25M. It was also the first plan, which was implemented under a Bhutanese planning commission.
The fourth Plan (1976-81) showed the first major shift from an earlier pattern of development expenditure with a more balanced distribution. Several large-scale projects outside the plan emerged, such as Chukha and Penden Cement and a major irrigation scheme in Gelephu. It was also the first plan that saw donor assistance beside India.
Of the total plan outlay of Rs 900.8M, the government of India made a net contribution of Rs 702.9M, UNICEF Rs 103.6M, and the rest was met from internal resources.
As of October 1982, there were 2,690 registered vehicles in the country, of which 1,115 were private vehicles, including 128 foreign cars, 176 trucks, 93 motorcycles and 410 scooters.
Then, the power generating capacity was 12.07MW, of which 3.45MW was hydropower and the rest coming from diesel generating sets. A total of 27 townships and 97 villages had access to electricity.
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