Till late June, budget absorption was only 26.2 percent, which is Rp208.5 trillion, far below the target.
Jakarta (ANTARA News) - Chairman of the Indonesian House of Representatives Setya Novanto has urged the government to increase the absorption of the state budget in the second semester of 2015, to boost economic growth.

"As we have been informed, budget absorption by the central government, notably ministries and institutions, in the first semester of 2015 was less than that in the first semester last year," he said in his opening remarks at the plenary session of the first sitting of the parliament for 2015-2016 here on Friday.

During the plenary session, President Joko Widodo delivered a speech on the 2016 draft state budget and its financial notes.

Till late June, budget absorption was only 26.2 percent, which is Rp208.5 trillion, far below the target.

Novanto appealed to the government to intensify the realization of infrastructure development projects.

"An increase in budget absorption can boost economic growth," he affirmed.

Furthermore, the government has proposed a national draft budget of Rp2,121.3 trillion for 2016, with revenue set at Rp1,848.1 trillion and deficit at Rp273.2 trillion.

"The deficit in the draft 2016 budget is Rp273.2 trillion," President Joko Widodo stated before the parliament here on Friday.

Based on the direction of policies and targets to be achieved, he added, the draft budget for 2016 has been set at Rp2,121.3 trillion, with central government spending set at Rp1,339.1 trillion, spending of ministries and state institutions at Rp558.7 trillion, and transfers to regions and villages at Rp782.2 trillion.

With regard to funding, the president pointed out that the government will use debts for productive activities and will empower the role of private companies as well as enterprises owned by the state and regional governments, to expedite infrastructural development. It will also make innovations for financing instruments.

As a consequence of the acceleration of infrastructural development, Jokowi noted that the government will need an expansive fiscal policy that will lead to a budget deficit.

"To support the implementation of the fiscal policy, the budget deficit will be covered by both domestic and foreign financing sources," he explained at the plenary meeting, which was chaired by Novanto.(*)

Editor: Heru Purwanto
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