The government announced Monday its Rp 73.3 trillion (US$6.31 billion) stimulus package to help boost the economy was starting to flow as scheduled.

However, four ministries have proposed a delay in spending the package due mostly to the complicated infrastructure projects they will have to carry out.

Acting Coordinating Minister for the Economy Sri Mulyani Indrawati said Rp 56.3 trillion worth of the stimulus had been channelled in the form of tax incentives starting on Jan. 1.

“The effect can be seen when companies and workers pay their taxes,” said Mulyani, who is also the Finance Minister, after meeting with President Susilo Bambang Yudhoyono at the Presidential Palace.

The tax incentives, she said, included tax cuts for companies, workers and individuals, totalling Rp 43 trillion this year.

Another Rp 13.3 trillion is allocated for tax subsidies and import duties exemption for certain labor-intensive industries.

The tax incentives stimulus is aimed at easing the burden of labor-intensive companies in coping with the deepening global economic downturn.

With the package, the government is upbeat it can prevent mass layoffs, especially during the upcoming legislative elections on April 9 and presidential election in July.

The stimulus is aimed at maintaining private consumption, the main driver of the economy, growing at between 4 and 4.7 percent.

Mulyani said the government had some difficulties in spending another Rp 12.2 trillion of the stimulus package for infrastructure projects and empowerment programs for people living in rural areas.

“The project filing [DIPA] has already been submitted by several ministries and agencies by the March 18 deadline,” she said.

“However, the Agriculture Ministry, the Trade Ministry, the Transportation Ministry and the Manpower and Transmigration Ministry have requested more time to plan the spending of their stimulus allowances.”

Mulyani said the Agriculture Ministry had difficulties planning the building of roads linking agricultural areas with processing and marketing areas, and highways connecting villages with cities.

The Trade Ministry is still struggling to map out the location of new traditional markets in villages to improve the distribution chain.

The Transportation Ministry has difficulties in project spending relating to railways and the construction of a national-scale highway.

The Manpower Ministry is still seeking the best way to help the country’s laid-off migrant workers survive during the crisis by providing them with more training and  temporary shelters.

The government expects its stimulus package to absorb an extra 3 million workers amid large scale layoffs by companies hard hit by the global economic downturn.

Stimulus package breakdown

Total: Rp 73.3 trillion

1. Rp 56.3 trillion for tax and import duties incentive for certain sectors

— Rp 43 trillion for companies, workers and individuals

— Rp 13.3 trillion for tax subsidies and import duties exemption

2. Rp 12.2 trillion for infrastructure projects and empowerment programs for people living in rural areas

3. Rp 4.8 trillion for diesel and electricity subsidies, as well as loans for rural empowerment (PNPM)

Source: Finance Ministry

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