Debt, project delays worry Bhutan

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Mains Paper 2: IR | India and its neighborhood- relations.

From UPSC perspective, the following things are important:

Prelims level: Not Much

Mains level: Amid Doklam Standoff, the relations of India and Bhutan have become more important, also it is a hot topic of discussion these days.


Concerns of Bhutan on Indian projects

  1. In a two-day conference in Bhutan, they mention that Bhutan wants more focus of India on issues like hydropower project constructions
  2. According to Bhutanese experts, Hydropower projects are critical for the Bhutanese economy
  3. And are at the core of Bhutan’s plans for self-reliance ever since the first five-year plans in 1961

Rising Debt of Bhutan and issues related to it

  1. As of July 2017, Bhutan’s debt to India for the three major ongoing projects: Mangdechhu, Punatsangchhu 1 and 2
  2. It is approximately 12,300 crore which accounts for 77% of the country’s total debt, and is 87% of its GDP
  3. The cost of the 720 MW Mangdechhu project has nearly doubled in the past two years
  4. Both Punatsangchhu 1 and 2, each of 1200 MW capacity have trebled in cost and been delayed more than five years over the original completion schedule

Indian Government Stand on the issue

  1. The Indian government is looking at the proposals of the hydropower committee of Bhutan
  2. But accepted that it would be difficult to meet many of them, given India’s own power sector needs to compete in the same area
Foreign Policy Watch: India-SAARC Nations
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