Next year, subsidies will account for only 9 to 10 percent."
Jakarta (ANTARA News) - Subsidies will account for only 9 percent of the governments draft state budget for 2016, according to Vice President M. Jusuf Kalla.

"Next year, subsidies will account for only 9 to 10 percent (of the government budget)," he said during a dialog at the office of the National Development Planning Agency (Bappenas) here on Wednesday.

He added that 3 percent of the subsidies will be allocated for fuels, 2 percent for electrical power and 4 percent for non-energy sectors.

Under the 1945 Constitution and health law number 36/2009, budget allocations for the fields of education and health constitute 20 percent and 5 percent of the state budget, respectively.

The total non-discretionary budget will constitute 80 percent of the budget in the draft state budget for 2016.

Although the draft budget will have Rp2,095 trillion, as much as 81 percent of the total will be non-discretionary budget, of which the central government will be able to provide Rp398 trillion as discretionary budget, which is 19 percent of the total, he stated.

Kalla also pointed out that the accurate and precise implementation of the budget will be the key to its success in supporting economic growth.

Earlier, an analyst of the Indonesian Economic and Political Association, Dani Setiawan, had described as "inappropriate" state electricity company PLNs idea of changing the subsidy for electrical power.

He believes that the move will lead to a reduction in budget allocations of the state budget.

"The policy is undoubtedly inappropriate on the ground that lowering subsidies will affect national competitiveness, particularly in the face of the ever-increasing aggressive trade liberalization," he had explained on July 23.

President Director of PLN Sofyan Basir had recently suggested that the government hand over electricity subsidy to the poor directly through cards.

"Looking ahead, we want the government to give subsidies (to the poor) through direct payments, in accordance with the number of people in the category," he remarked.

(Reported by Muhammad Razi Rahman/Uu.S012/INE/KR-BSR/A014)

Editor: Priyambodo RH
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