Industry Minister Requests Additional Rp 1.59 Trillion Budget from Parliament: What For?

The Ministry of Industry is facing a major challenge in 2027. Despite the government’s set targets for manufacturing industry growth, the ministry’s indicative budget ceiling has actually experienced a significant decline. The industrial sector remains a driver in national economic development and downstream processing. “We support the implementation of national priorities through various main agendas, including the downstreaming of priority commodities, development of strategic industries, strengthening of the halal industry and halal SMEs, digital industrial transformation, resource efficiency, and industrial decarbonisation programmes towards a green industry,” stated Minister of Industry Agus Gumiwang Kartasasmita during a working meeting with Commission VII of the Indonesian House of Representatives (DPR RI) on Wednesday (10/6/2026). The government has set several targets for the manufacturing sector in 2027, covering the growth of the processing industry, increased investment, manufacturing exports, and job creation. However, the available budget is becoming increasingly tight. “In 2027, we received an indicative ceiling of Rp 2.01 trillion, a decrease of Rp 488.16 billion, equivalent to 19.5%, compared to the initial ceiling for 2026,” Agus stated. The budget cut is made more onerous because the portion of employee and operational spending continues to increase year on year. Consequently, the allocation available for industrial development programmes is becoming more limited. “If we look from 2023, it was only 25%, but if we look at the 2027 indicative budget, it has increased to 73.19%. This means non-operational spending, which was previously 74.36%, has fallen to around 26.81%,” he explained. Therefore, the Ministry of Industry is proposing an additional budget to the government and the DPR. The additional budget will be used for restructuring industrial machinery, strengthening Small and Medium Industries (IKM), downstreaming natural resources, vocational education, and developing industrial information systems. “Hence, we are proposing an additional budget requirement of Rp 1.59 trillion to strengthen the implementation of priority programmes that have a direct impact on increasing productivity, competitiveness, downstreaming programmes, strengthening small and medium industries, developing industrial human resources, and transforming the national industry,” Agus elaborated.