Widodo to Switch Off Middle Class Power Subsidy in Budget Reform

Having watched his economic reform momentum falter in recent months, Indonesian President Joko Widodo is resurrecting his biggest policy success by cutting more subsidies. That will test his support with voters.

The government is proposing to remove electricity subsidies next year for households that use between 450 and 900 watts, a common level among middle class families in the capital. Rather than subsidizing state power company PT Perusahaan Listrik Negara, money will be shifted directly to the poor, Askolani, a director general at the finance ministry, said on Tuesday.