Reducing State Budget Burden, Economist Suggests Government To Fix Subsidy Distribution Mechanism

Illustration (Photo: Doc. Antara)

JAKARTA - The government plans to reduce the burden on the state budget (APBN).

Research Director of the Center of Reform on Economics (Core) Indonesia Piter A Redjalam said the plan could be carried out by fixing the mechanism for distributing subsidies to be more effective and efficient.

Piter said, the subsidy policies given by the government so far have been able to contain the inflation rate.

Such as subsidies for Pertalite fuel, 3 kilograms (Kg) LPG, and electricity below 900 VA.

However, continued Piter, the government's policy actually caused the burden of subsidies in the APBN to be very large, which was more than Rp. 500 trillion.

By improving the mechanism, said Piter, subsidies can be more targeted and at the same time ease the burden on the state budget.

"To reduce the burden of subsidies in the APBN, the government plans to improve the subsidy mechanism that is more targeted," he said, in Jakarta, Friday, August 5.

According to Piter, this method will allow people to enjoy affordable subsidized prices.

At the same time, the government can contain inflation.

"Thus the burden of subsidies can be reduced without having to increase the price of subsidized goods. So that the inflation rate can still be maintained not too high," he said.

Government Prepares Targeted Subsidy Policy

Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto said that next year the government will begin to prepare a more targeted subsidy policy to maintain inflation.

The Golkar chairman also explained that the types of subsidies that will be reviewed to be more targeted are subsidies for fuel oil (BBM), melon gas (3kg), and fertilizers.

"We see that the government basically maintains inflation and it is true that the subsidy program is made to be right on target and there is a program being prepared, and of course, we will announce it when the time is right," said Airlangga.