Accurate Subsidy Distribution Can Reduce Burden to State Budget: DPR

Jakarta: The Indonesian government can reduce the huge subsidy burden from the state budget by ensuring accurate subsidy distribution and redirecting the sum for other beneficial purposes, according to the House of Representatives (DPR RI) Budget Committee.
 
"It is to ensure that the state budget will benefit residents more, as the subsidy will be redirected to poorer residents who need (the subsidy direly). The approach can also reduce harmful effects of inflation on poor households," DPR RI Budget Committee Chair Said Abdullah said in a statement here, Friday.
 
The Rp502 trillion (US$33.6 billion) vehicle fuel subsidy budget is ideally redirected to develop public sectors that will benefit residents, such as education, healthcare, energy infrastructure, and other sectors, he remarked.

According to Abdullah, the huge subsidy can be used instead to develop 3,501 kilometres of toll roads, 3,333 mid-level hospitals, 41,666 new public health centres, and 227,886 primary schools.
 
The government can redirect the subsidy only to a particular group, such as to micro, small, and medium enterprises (MSMEs) in need of fuel for their daily production, he stated.
 
The subsidy can also be reallocated to boost Indonesia's food resilience, especially as the country still needs to import basic food commodities, such as meat, vegetables, sugar, and soybean, despite achieving self-sufficiency in rice, he noted.
 
"Food self-sufficiency is essential because our dependence on food imports (makes us) vulnerable to various economic risks that affect the people and our fiscal balance," the budget committee chair stated.
 
The legislator also suggested to redirect the subsidy budget to bolster energy conversion programmes in a bid to reduce dependence on the imported crude oil commodity.
 
Energy conversion must be prioritized, as it will be essential to achieve energy self-sufficiency to reduce budget swelling in the vehicle fuel subsidy in future, he added.
 
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