Key to the budgetary process since 1949 has been the annual subsidy given to Bhutan by the Indian government. In the late 1980s, the subsidy stood at 40 percent of total revenue, but this proportion was significantly less than the nearly 100 percent New Delhi once provided. The rest was funded by international aid organizations and a few domestic sources.

During most of the 1980s, the budget ran a deficit. Only in 1984, out of the four years between 1983 and 1986, did government revenues exceed expenditures, and revenues depended heavily on foreign aid. In other years, revenue shortfalls reached as much as Nu207 million (in 1985). In FY 1989, Bhutan's revenues of nearly Nu1.7 billion (US$99 million) were exceeded by expenditures of nearly Nu2.2 billion (US$128 million, of which US$65 million were for capital expenditures).

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Source: U.S. Library of Congress