Infrastructure Budget Proposed at Rp 435 Trillion, Covering Rice Field Development and Garuda Schools
The government has allocated an infrastructure budget of Rp 435.49 trillion in the 2027 Draft State Budget (RAPBN).
The budget is directed towards supporting the development of basic infrastructure, connectivity, energy, food, and information and communication technology.
Historically, Indonesia’s infrastructure budget has shown an upward trend, although its movement has not always increased every year. After reaching Rp 455.8 trillion in 2023, the budget fell to Rp 422.7 trillion in 2024 and Rp 400.3 trillion in 2025, before rising again to Rp 434.8 trillion in the 2026 State Budget.
In the 2027 RAPBN, the infrastructure budget is planned at Rp 435.49 trillion, an increase of only around Rp 690 billion, or 0.16%, from the previous year. This figure is also still around 4.5% below the 2023 level.
Basic infrastructure is one of the main focuses of the 2027 RAPBN. The government is targeting the provision of 345,310 new housing units and quality improvements for 400,000 housing units. Support is also directed towards the rehabilitation of post-disaster areas in Sumatra, the construction and revitalisation of schools, the strengthening of hospitals, and the provision of sanitation in underdeveloped, frontier, and outermost (3T) regions.
On the connectivity side, development is directed towards strengthening inter-regional links while reducing logistics costs. The government is targeting the construction of 201.2 kilometres of national roads, 13.5 kilometres of toll roads, as well as bridges and flyovers/underpasses. This infrastructure is primarily directed towards supporting industrial estates, Special Economic Zones (KEK), tourism destinations, 3T regions, and other strategic areas.
Energy infrastructure is also an important part of the 2027 agenda. The government is directing development towards strengthening energy security, expanding electricity access, and supporting the development of new and renewable energy. This direction is in line with the Energy and Water Independence cluster of the National Priority Work Programme (PKPN).
In the food sector, infrastructure development is directed towards strengthening food security and productivity through water provision and the optimisation of agricultural land. The government is encouraging improvements to infrastructure and water management on swamp land, as well as more efficient dry land management through soil conservation and the utilisation of water resources.
These efforts are aimed at increasing the Cropping Index (IP) and agricultural commodity productivity, in line with the Food Sovereignty cluster in the 2027 National Priority Work Programme.
The government is also continuing digital infrastructure development through strengthening broadband networks, SATRIA-1, Palapa Ring, rural cellular signals, and digital government infrastructure. This policy is directed towards reducing the digital divide between regions while improving the quality of public services.
Infrastructure support is also provided through Transfers to the Regions, including the Papua Additional Infrastructure Fund (DTI) of Rp 3.36 trillion in 2027. These funds are focused on transport, telecommunications, electricity, clean water, and environmental sanitation infrastructure.
The relatively limited budget increase must accommodate a broad infrastructure agenda. In addition to connectivity, development in 2027 is directed towards housing and basic services, food and energy security, digitalisation, and support for disadvantaged regions and Papua.
With limited room for budget increases, spending effectiveness is becoming increasingly important. The challenge is not only ensuring that projects can be built, but also ensuring that the infrastructure financed is able to improve connectivity and productivity and expand public access to basic services.