Finance Minister Sri Mulyani Indrawati said the “national economic recovery” program would include a strengthened social safety net, tax incentives, capital injections into SOEs and interest rate subsidies for MSMEs, among other measures.
Sri Mulyani said the widening budget deficit was warranted as government revenues may drop by Rp 69.3 trillion to Rp 1.69 quadrillion, while the government boosts state spending by Rp 106 trillion to Rp 2.72 quadrillion. “This will serve as support for SOEs affected by COVID-19 including from supply chain disruption, falling demand and operations, as well as the severe financial impact, ” said Sri Mulyani. The stimulus will be targeted at SOEs with strategic roles, she added.
It is also planning to provide Rp 172.1 trillion for the social safety net, far higher than the previous plan of Rp 110 trillion, as well as increasing its tax incentives program to Rp 123 trillion from the initial plan of Rp 70.1 trillion