"The spirit of subsidy and social assistance policies is to strengthen our people and increase self-reliance, instead of making them depend on subsidies. It needs to be underlined [subsidies] should not be made addictive," Jokowi said during a limited meeting on subsidies at the Presidential Office in Jakarta on Wednesday.

He said subsidy allocation in the revised state budget reached Rp 177 trillion (US$13.4 billion) or 13.6 percent of total government spending. Of the total subsidy budget, Rp 94.4 trillion or 53 percent are energy subsidies, while the remaining Rp 83.4 trillion or 47 percent are for non-energy subsidies. In addition, the government also allocated Rp 59 trillion for social spending and Rp 47 trillion for the village fund.

"We must ensure that subsidies and social assistance, which have already been allocated in the budget, can be more effective in reducing poverty and inequality. And to make subsidies and social assistance truly effective, we need to thoroughly improve in planning, financing and distribution," he explained.

In 2015, Jokowi added, the government made the decision to transfer fuel subsidies to well-targeted programs such as to increase the subsidy for the government-backed micro-credit program (KUR) by Rp 1.9 trillion to 15.8 trillion.

"It shows that the transfer of subsidies are aimed at people and small and medium enterprises (SMEs) who really need it. To even better target funds, I want the planning of subsidies, social assistance, village funds and government spending to be integrated and not overlapping," he said. (evi)

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