The government is set to launch a digital social assistance program, with a pilot project to be carried out in Banyuwangi, East Java. The program is claimed to potentially save up to IDR 14 trillion annually while improving transparency and accuracy in social aid distribution.
Responding to the initiative, UGM economist Dr. Wisnu Setiadi Nugroho, stated that the digitalization of social assistance marks a significant step forward in strengthening Indonesia’s social protection system.
He noted that digitalization would reduce administrative costs, ensure timely and transparent disbursement, and guarantee that beneficiaries receive the correct amount.
According to Dr. Nugroho, digitalizing social assistance is not a new concept. The government had previously launched initiatives such as the Social Protection Card (KPS/KKS) and the Non-Cash Food Assistance (BPNT) program.
The 2025 plan is expected to address persistent issues identified under earlier administrations. He further explained that Banyuwangi was a reasonable choice for the pilot, but cautioned against treating it as a national benchmark.
“Banyuwangi has relatively better digital infrastructure compared to 3T regions such as East Nusa Tenggara, Papua, or interior Kalimantan. Success in Banyuwangi does not automatically reflect Indonesia’s overall readiness,” he said on Wednesday (Sep. 3).
Dr. Nugroho also highlighted several challenges to digital aid distribution, including the digital infrastructure gap in frontier, outermost, and underdeveloped regions (3T regions), limited digital literacy among low-income communities, inaccuracies in the Integrated Social Welfare Data (DTKS) and Socioeconomic Registry, as well as risks of exclusion due to biometric-based authentication.
“These challenges must be anticipated to prevent digitalization from burdening the very people it is meant to support,” he added.
To address these challenges, he emphasized four key measures.
First, accelerate the expansion of internet infrastructure, including support for offline and low-bandwidth modes.
Second, providing community assistance through local agents and digital literacy programs.
Third, integrating social assistance data across ministries for greater accuracy.
Fourth, ensuring public transparency through real-time dashboards and accessible complaint channels.
“Digital social assistance will only be effective if supported by updated data, adequate infrastructure, and direct community assistance,” he explained.
Furthermore, Dr. Nugroho expressed hope that the program would not only improve budget efficiency but also enhance financial inclusion for low-income households.
If implemented effectively, he said, digitalization could accelerate disbursement, reduce leakage, and increase beneficiary satisfaction.
“It could even serve as an entry point for low-income communities into formal financial services. In this way, digital social assistance is not just a short-term instrument but also a pathway toward long-term welfare,” he concluded.
Author: Kezia Dwina Nathania
Editor: Gusti Grehenson
Post-editor: Rajendra Arya
Illustration: Freepik