Padu a good start towards focused subsidies

TA Research expects the government to educate people about Padu to ensure that the subsidy-rationalisation plan stays on track.

PETALING JAYA: The newly launched national Central Database Hub (Padu) is a move in the right direction for ensuring fairer subsidy distribution, analysts say.

However, its system self-updating information could be “a little bit tedious” particularly for senior citizens and those residing in rural areas, said TA Research.

The research house expects the government to educate people about Padu in order to make sure the subsidy-rationalisation plan stays on track.

The public will be given a three-month period until March 31, 2024 to update and verify their information on the database.

Since this is not compulsory, no action will be taken against those who do not update their information in the database.

With the implementation of Padu, TA Research said the government aims for a more focused distribution of subsidies and partly move away from the general income categories such as B40, M40 or T20, which does not give a true picture of household disposable income.

“However, there is a catch, whereby those who did not register would be at risk of being excluded from receiving targeted subsidies. We are made to understand that the risk of exclusion may occur as the government will use existing information and information updated in Padu to determine the household profile and eligibility for those who qualify for targeted subsidies or otherwise,” the research house added.

TA Research said on the reliability of the data in the system should be reasonable.

“Managed by the Statistics Department, we believe the given information will be cross-checked and verified by the related government agencies. For the record, Padu covers 270 types of data under the federal government from various agencies. Data from state and local governments will be gradually included,” it said.

According to the research firm, this process should happen in the second phase, probably in April-June 2024, just in time for the subsidy rationalisation plan to take place in the second half of 2024.

The implementation of targeted subsidies is expected to help the government achieve its target of reducing the fiscal deficit to between 3%-3.5% of gross domestic product by 2025. The government has allocated RM52.8bil for subsidies this year. It is projected to decrease by 17.9% compared to an estimated RM64.2bil in 2023, primarily due to the gradual implementation of subsidy rationalisation, TA Research said.