Revised Budget Includes Cooking Oil Subsidy

The House of Representatives on Tuesday (28/8/07) approved the midyear revisions to the 2007 budget, which see a downsizing in anticipated government revenue and spending, a wider deficit, additional funds for bureaucracy reform and a new cooking oil subsidy, reported The Jakarta Post.

The subsidy, intended to shield poor households from the effects of higher cooking oil prices, will amount to Rp325 billion ($36 million), while the additional money earmarked for helping fix the bureaucracy -- mostly in the form of pay rises in the Finance Department -- comes to Rp1.46 trillion.

The revised budget also sees a bigger subsidy for state power firm, PT PLN, at Rp32.4 trillion, but lower fuel subsidy spending of Rp55.6 trillion.

Legislators agreed that the two new allocations be included in this year's total government spending, which saw a 1.4% cut to Rp752.4 trillion ($83 billion).

The 2007 revised budget still sees the economy growing by 6.3%, inflation is predicted to continue slowing to 6%, while the rupiah is forecast to average Rp9,050 against the US dollar, and the central bank benchmark interest rate at 8%.

All of the House's 10 factions approved the budget revisions, subject to supplementary comments.

"This year's 6.3% growth should be of higher quality, in the sense that it should create millions of new jobs, and be built on 3.3% growth in the agricultural sector and 8.5% growth in the manufacturing industry," budget committee chairman Emir Moeis said.
_________________________
Jawawa.net: Indonesian Business and Investment News Aggregator