Luhut Reveals Plan to Convert Goods-Based Subsidies into Cash Transfers
The Chairman of the Government’s Digital Transformation Acceleration Committee, Luhut Binsar Pandjaitan, has stated that the government plans to change the subsidy distribution scheme, which is typically provided in the form of goods, into direct cash transfers to eligible recipients.
Luhut emphasised that this plan has already been reported to President Prabowo Subianto. However, he did not disclose the President’s response regarding the proposal.
“In the future, over time, perhaps in the next 1-2 years, we will change subsidies; I have reported to the President, they will no longer be in the form of goods. They will go directly to the people as cash,” Luhut said during a press conference at the Ministry of Social Affairs office in Central Jakarta.
On this occasion, Luhut also explained that the government is currently undertaking the digitalisation and unification of cross-sector data by utilising Artificial Intelligence (AI) related to digital social protection data.
He explained that the government is matching data from various Ministries and Agencies, such as the Population and Civil Registration Office (Dukcapil) under the Ministry of Home Affairs, land ownership data from the Ministry of ATR/BPN, vehicle ownership data from the National Police, and many others.
According to Luhut, the process of data integration and digitalisation will make the list of social assistance recipients increasingly robust, with the cross-agency data matching process expected to be completed by the end of 2026.
Consequently, the social assistance distribution scheme using this new data can commence in early 2027. This means that from next year, the list of social assistance recipients will be sourced from the results of cross-sector data matching assisted by AI.
“We will distribute social assistance in 2027. We will attempt to distribute it in the first quarter of next year, but that is subject to our success by the end of this year,” Luhut continued.