Indonesia to cut spending further on free-meals scheme, minister says

JAKARTA — Indonesia will reduce spending on its free-meals programme, possibly by around 40 trillion rupiah (S$2.9 billion) this year, the finance minister said on Friday (June 26), amid growing concerns about the cost and governance of the scheme.

Purbaya Yudhi Sadewa told reporters a budget efficiency plan had been discussed with the National Nutrition Agency, which runs the programme. 

The NNA would determine the final figure and inform President Prabowo Subianto before releasing it publicly, he said.

"There will be further savings from the programme and I think quite significant," Purbaya said. He answered "maybe" when asked if the cuts would be 40 trillion rupiah.

The minister did not comment on whether there would be a reduction in the number of schoolchildren, toddlers, pregnant women, and breastfeeding mothers covered by the scheme, which was a key election promise of Prabowo.

On Thursday, Reuters reported that Jakarta was weighing cuts of more than US$2 billion (S$2.6 billion) to the programme and the number of recipients could be cut to 49 million from a current 62.5 million. 

The initial target of the programme was to provide meals for 83 million people.

The budget for the programme this year was initially set at 335 trillion rupiah, making it one of the biggest allocations to a single project. 

In May, the planned spending was cut to 268 trillion rupiah.

Purbaya said the "budget sharpening" and lower global oil prices would give the government more room to maintain the fiscal deficit below the mandated level of three per cent of GDP this year.

He said the NNA had asked the Finance Ministry to help it monitor the implementation of the programme.

The flagged lower spending comes as Jakarta seeks to reduce pressure on its budget position, which has been stretched by factors including higher oil prices and a weaker rupiah currency.

[[nid:738906]]