The First Five-Year Plan — Bhutan begins planned development, 1961-66.

The decision to plan

By 1960 His Majesty the Third Druk Gyalpo had been on the throne for eight years and had completed the foundational reforms of His reign — the abolition of slavery and serfdom (early 1950s), the founding of the Tshogdu (1953), the move of the capital from Bumthang to Thimphu (1952-53), the 1958 Nehru visit that opened the country diplomatically. The next institutional question was: how does a country that has been substantially closed for two centuries open economically without losing the cultural and religious framework that defines it? The answer was the Five-Year Plan structure — borrowed from the Indian model of planned economic development, adapted to Bhutanese constraints. The First Plan was prepared across 1960-61 in consultation with the Indian Planning Commission and launched in 1961.

The other principal initiatives

Beyond roads, the First Plan launched several principal institutions: the Bhutan Government Transport Service (1962, the country's first state transport agency, the principal long-distance bus operator across the subsequent decades); the first Bhutanese postage stamps (1962, both for postal use and as a substantial early source of foreign exchange — the Bhutanese stamps issued across the 1960s and 1970s, including the famous 3-D and silk and CD-ROM stamps, are widely collected internationally); a Health Department operating three hospitals and eleven dispensaries by plan end; the Geological Survey of India invited to undertake the first systematic mineral and resource survey of the country; the launch of the first modern educational institutions outside the existing monastic system. The combined effect was the institutional founding of the modern Bhutanese state — the country a visitor encounters today operates within the framework the First Plan established.

Common questions

Why was the First Plan entirely India-financed?

Two principal reasons. First, Bhutan in 1961 had effectively no internal revenue base capable of supporting a modernisation programme of this scale — the annual British subsidy under the 1910 Treaty (and its 1949 Bhutan-India successor) was the principal external revenue stream, and the internal tax base was small. Second, the broader Bhutan-India strategic relationship under the 1949 Treaty made India the natural development partner; the financing arrangement was treated by both governments as the appropriate institutional vehicle for the bilateral cooperation framework Prime Minister Nehru had articulated in His 1958 Ugyen Pelri address. The pattern continues today — India remains by a substantial margin the principal external development partner of Bhutan.

What is the contemporary Five-Year Plan?

The 13th Five-Year Plan (covering 2024-29), prepared by the Gross National Happiness Commission (the institutional successor to the Planning Commission, which Crown Prince Jigme Singye Wangchuck had chaired from 1971). The plan is organised against the GNH framework — every major initiative is evaluated against the GNH nine domains. Visitors interested in the contemporary development arc will see the 13th Plan referenced across infrastructure signage, hydropower-project sites, the institutional architecture of the Bhutanese state. The 13th Plan is the 13th iteration in an unbroken sequence from the 1961 First Plan.

Can a visitor see the legacy of the First Plan today?

Everywhere. The Phuentsholing-Thimphu highway that brings visitors from the southern Indian border into the capital is the principal First Plan project. The Trongsa-Gelephu and Trashigang-Samdrup Jongkhar roads carry visitors who undertake the eastern and central Bhutanese circuits. The Bhutan Government Transport Service buses are visible on every major road. The Bhutanese postage stamps issued from 1962 are part of the philatelic register that visitors with an interest collect. The Tashichoedzong in Thimphu — reconstructed under the First and Second Plans across 1962-69 — is the principal building of the contemporary state and is open to visitors most days during the standard cultural tour.