Budget Committee Chair: Importing 105,000 Commercial Vehicles from India Using State Budget Should Be Cancelled

The Budget Committee of the Indonesian House of Representatives has stated that PT Agrinas Pangan Nusantara (Agrinas) does not need to import 105,000 commercial vehicles from India.

The Chair of the Budget Committee, Said Abdullah, said the plan to import commercial vehicles could potentially harm the national economy and therefore needs reconsideration, particularly given that the corporate action is being carried out using state budget funds.

“This vehicle purchase plan uses the state budget and is multi-year in nature. Given the limited fiscal space in the state budget structure, every purchase of goods and services using state budget money should be evaluated for its economic benefit,” said Said in his statement in Jakarta on Wednesday.

He cited calculations from the Centre of Economic and Law Studies (Celios) which revealed potential losses from the vehicle import plan, including a reduction in gross domestic product (GDP) of up to Rp39.29 trillion and a decrease in household incomes of Rp39 trillion.

There is also the possibility of cutting the automotive industry surplus by Rp21.67 trillion, reducing wage income across the entire automotive supply chain by Rp17.39 trillion, and reducing net tax revenues by Rp240 billion.

Said did not deny that the offer price for commercial vehicles from India may be cheaper. However, consideration must also be given to after-sales service, the availability and accessibility of workshops and spare parts. “If all of this is taken into account, the price could end up being more expensive than the original efficiency objective,” he said.