Economic Development Policy of The Kingdom of Bhutan, 2010

Name of policy Economic Development Policy of The Kingdom of Bhutan, 2010
Jurisdiction Country
Supranational region
Country Bhutan
Region Asia


Subnational region or state
City or local
Policy objective
  • Mitigation
  • Economic development
Type of policy instrument
  • Policy support
    • Strategic planning
    Sector name
    • General
      Policy description The Economic Development Policy of 2010 set two main objectives: too achieve economic self-reliance by the year 2020, and to achieve full employment (97.5%).

      To reach those objectives, the policy aims to develop several strategies, including diversifying the economic base with minimal ecological footprint, harnessing and adding value to natural resources in a sustainable manner, and reducing dependency on fossil fuel especially in respect to transportation. (Art. 5.b)

      Art. 5.b states that "the economic development process shall take into account environment mainstreaming in a phased manner that allows for industries to grow as well as engage in cleaner production. The Royal Government shall also provide incentives for the promotion of green technology, micro-hydro projects, solar, wind, biomass and energy efficiency and conservation programmes. The success of the country’s environment conservation efforts shall be one of the main drivers for developing the “Brand Bhutan” theme. Protection of biodiversity, genetic resources and promotion of indigenous knowledge shall be pursued."

      The Economic Development Policy plans to ensure national energy security through capacity allocation, development of storage hydroelectric projects, and through development of solar, wind and other renewable energy sources. (Art 7.2) Art. 7.2 also states that "energy efficiency and conservation measures shall be promoted for sustainable supply and end use."

      The Economic Development Policy plans to develop several economic incentives to achieve its objectives.

      Art. 9.1.8 states that "Business which has undertaken environmentally friendly technological up gradation shall be allowed income tax rebate of 15% of the up-gradation expenses."

      Art 9.1.12 states that "Sales tax and customs duty exemption shall be granted for purchase of electric cars/hybrid cars/cars that run on renewable energy including spare parts."

      Art. 9.3.8.2 states that "Green building materials shall be exempted from customs duties and sales tax."

      Policy type
      • Energy efficiency
      • Renewables2
      Policy stringency
      Implementation state Implemented
      Date of decision 2010
      Start date of implementation
      End date of implementation
      High impact No
      Impact indicator


      Source or references http://www.biodiv.be/bhutan/legal-instruments/policies/economic-development-policy-kingdom-bhutan-2010
      Supports policies
      Is supported by policies
      Comments (background and assessment)
      Status Final

      Download this policy as Excel file