2021 State Budget Bill Allocates Rp356.5 T for National Economic Recovery
Date 14 Agustus 2020
In line with importance of the continuation of the National Economic Recovery, the 2021 State Budget Bill allocates a budget of around Rp356.5 trillion.
The statement was made by President Joko “Jokowi” Widodo in an Address of President of the Republic of Indonesia on the Presentation of the Government Statement on the Bill on the State Budget for the 2021 Fiscal Year and Its Financial Note Before the Plenary Session of the House of Representatives of the Republic of Indonesia, Friday (14/8), at the Nusantara Building, Senayan, Jakarta.
According to the President, the budget is aimed at:
First, healthcare services with a budget of around Rp25.4 trillion for the procurement of antiviral vaccines, health facilities and infrastructure, laboratories, research and development, and Social Security Provider Body (Badan Penyelenggara Jaminan Sosial/BPJS) contribution assistance for Non-Salaried Employees (Pekerja Bukan Penerima Upah/PBPU).
Second, social protection for the middle to lower class society of around Rp110.2 trillion through the aspiring family program, staple food cards, pre-employment cards, and cash social assistance.
Third, sectoral Ministries/Institutions and regional governments with a budget of around Rp136.7 trillion, which is aimed at boosting tourism sector, food security and fisheries, industrial estates, Information and Communication Technology development, Central Government loan to regional governments, and anticipating economic recovery.
Fourth, support for Micro, Small, and Medium-sized Enterprises (MSMEs) of around Rp48.8 trillion, through Smallholder Business Credit (Kredit Usaha Kecil/KUR) interest subsidies, MSMEs financing, guarantees and placement of funds in banks.
Fifth, corporate financing of around Rp14.9 trillion, which is earmarked for credit guarantee companies and State-owned Enterprises that carry out the assignment.
Sixth, business incentives of around Rp20.4 trillion through taxes borne by the Government, exemption of import income tax, and preliminary Value Added Tax (VAT) refunds.
The President went on to say that infrastructure development in 2021 is budgeted at Rp414 trillion, which will be mainly targeted for economic recovery, provision of basic services, and improved connectivity. The COVID-19 pandemic shows that availability and reliability of fully functioning digital infrastructure are critical and strategic.
“Infrastructure spending, in this regard, is directed towards strengthening digital infrastructure and encouraging logistics efficiency and connectivity; labor-intensive infrastructure that supports industrial and tourism areas; and construction of public health facilities and provision of basic necessities, such as clean water, sanitation, and housing,” the President said.
As for Food Security in 2021, he asserted that a budget of around Rp104.2 trillion is aimed at promoting production of food commodities through development of facilities and infrastructure and utilization of technology; revitalizing the national food system by strengthening farmer and fisherman corporations and food distribution; and developing large-scale food estates to increase food productivity.
In addition, the Government is committed to improving the welfare of farmers and fishermen by targeting the Farmer Exchange Rate or NTP (Nilai Tukar Petani) and Fisherman Exchange Rate or NTN (Nilai Tukar Nelayan) of 102 to 104 in 2021.
“Social protection support in 2021 is budgeted at Rp419.3 trillion, which is aimed at accelerating social recovery and supporting gradual reforms of the social protection system,” the President stated.
Social protection measures are carried out through social assistance programs, such as the aspiring family program, staple food cards (Kartu Sembako), cash assistance, and pre-employment cards; encouraging comprehensive social protection reform programs based on life cycles and anticipation of the aging population; improving integrated data on social welfare (Data Terpadu Kesejahteraan Sosial/DTKS) and mechanisms for distributing social protection programs, as well as strengthening monitoring and evaluation.
The gradual reforms of the social protection system, he added, is essential in supporting efforts to eradicate extreme poverty by 2024. Tourism development in 2021 is budgeted at approximately Rp14.4 trillion, which is aimed at encouraging economic recovery in the tourism sector.
The Head of State also asserted that the policy is carried out through tourism recovery by developing 5 priority tourist destinations: Lake Toba, Borobudur, Mandalika, Labuan Bajo, and Likupang; development of 3A aspects-attractions, accessibility and amenities-as well as improvements to 2Ps-promotion and participation-of private entrepreneurs; a storynomics tourism approach that emphasizes on narrative, creative content, living culture, and cultural strengths; and utilization of the Public Private Partnership (Kerja Sama Pemerintah dengan Badan Usaha/KPBU) scheme in development of amusement centers, such as theme parks that will attract a lot of tourists.
“The overall state expenditure policies are expected to support the achievement of development targets in 2021, namely an unemployment rate of 7.7 to 9.1 percent, poverty level in the range of 9.2 to 9.7 percent, with an emphasis on reducing extreme poverty groups, the level of inequality in the range of 0.377 to 0.379, as well as Human Development Index (HDI) ranging from 72.78 to 72.95,” the President explained. (TGH/MAY/EN)
Translated by : Rany Anjany
Reviewed by: Mia Medyana