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Dream - President Joko Widodo (Jokowi) has increased the social assistance (Bansos) budget for the subsidized fertilizer program amounting to Rp14 trillion. "The President has agreed to add a subsidy of Rp14 trillion," said Indonesian Minister of Economic Affairs Coordinating Airlangga Hartarto quoted from Merdeka.com, Tuesday, February 6, 2024. To facilitate the implementation of Bansos, the government has cut several budget allocations that were originally used for ministry and agency programs.
The addition of this new social assistance budget is considered necessary as the number of farmers eligible for subsidized fertilizer increases. There are currently 2.5 million farmers in need of subsidized fertilizer.
Airlangga said, the source of the Rp14 trillion funds comes from the automatic adjustment policy through blocking from the spending limit of each ministry or institution (KL).
With that policy, the Ministry of Finance (MoF) in 2024 will temporarily block 5 percent or equivalent to a budget of Rp50.14 trillion from the KL expenditure ceiling.
Regarding the technical settings of automatic adjustment policy for the addition of fertilizer subsidy budget, Airlangga said that President Jokowi will fully entrust it to Minister of Finance Sri Mulyani Indrawati. "Later, there are various ways for the technique, Mrs. Minister of Finance will handle it. One of them is automatic adjustment," said Airlangga.
Initially, the initial budget for the subsidy program, which reached Rp26 trillion, was not able to cover the additional number of beneficiary farmers. According to Airlangga, the Rp26 trillion budget only reached approximately 5.7 million farmers. "First, fertilizer subsidies are important because we are entering the planting season and with the available funds of 26 trillion, it only covers 5.7 million farmers," he explained.
Head of the Communication and Information Services Bureau of the Ministry of Finance (Kemenkeu), Deni Surjantoro, stated that the budget blocking policy for KL is a direct instruction from President Jokowi.
This policy aims to anticipate the impact of geopolitical tensions. "In accordance with the President's directive during the handover of the DIPA for the year 2024, the current dynamic global geopolitical conditions have the potential to affect the world economy, so it is necessary to anticipate potential or possible occurrences in the year 2024," expressed Deni.
"He said that a similar policy had been taken by the government in 2022 and 2023. However, the blocked budget remains available within each ministry's budget. Automatic adjustment policy is one method to respond to global dynamics and has proven effective in maintaining the resilience of the state budget for 2022 and 2023. "Basically, the budget affected by automatic adjustment still remains within each ministry," Deni concluded."
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