House approves revised state budget

House approves revised state budget

JAKARTA (JP): After nine days of debate, the House of
Representatives finally approved late on Friday the 2001 state
budget revision proposed by the government.

The revised state budget was set at Rp 340.32 trillion
(US$25.45 billion), compared to Rp 315.76 trillion set under the
original January-December budget.

The approval came at the conclusion of the debate session
between the House task force and the government.

The government proposed the revision of the current state
budget following the recent sharp plunge in the value of the
rupiah against the U.S. dollar and rising domestic interest
rates.

The budget revision includes several fiscal measures such as
raising fuel prices and electricity rates to help maintain the
budget deficit at a reasonable level of 3.7 percent of gross
domestic product (GDP) or the equivalent of Rp 54.32 trillion.

Earlier last week, the House rejected the government plan to
raise value added tax (VAT) to 12.5 percent from 10 percent.

Under the revised budget, the assumed exchange rate of the
rupiah has been adjusted to Rp 9,600 per dollar (compared to Rp
7,800 under the original plan), inflation rate 9.3 percent
(originally 7.2 percent), economic growth 3.5 percent (originally
5 percent), and the interest rate of Bank Indonesia 3-month SBI
promissory notes 15 percent (formerly 11.5 percent).

The government had expected the International Monetary Fund
would immediately send its review team to Jakarta following the
completion of the budget talks with the House.

The visit of the IMF review team would pave the way for the
disbursement of the next IMF loan tranche to the country. The
IMF had delayed the loan disbursement late last year.

But IMF Jakarta representative John Dodsworth was quoted by
Reuters as saying that the IMF had no immediate plans to send the
review mission to Jakarta to assess the country's economic reform
program.

"There is no schedule for a team to come out," he said.
(rei/jsk)