Niaz Asadullah of Monash University Malaysia questioned how effective the Padu system could be in helping the government to provide targeted subsidies, especially for isolated East Malaysian households.

“Data is very patchy for these non-Malay bumiputera groups, including those relying on the informal sector for their livelihood,” he said. “It’s not clear how the Padu system will get around these constraints.”

Another economist, Calvin Cheng of the Institute of Strategic and International Studies, said the Padu system must include those without formal employment, such as women engaged in household production.

However, more targeting would require more money and greater administrative capacity to determine details such as a household’s location, assets and other data to determine a household’s eligibility for subsidies,” said Cheng.

Earlier this month, economy minister Rafizi Ramli said the government planned to move away from the current income classification system (B40, M40, T20) which only takes into account a household’s gross income.

The Padu database would also consider factors such as number of dependents and location, with a trial on one million households in November before the government begins targeted subsidies next year.

He said blanket subsidies were “the easy way” to keep prices artificially low but the government had avoided the harder task of building a national database and introducing a targeted subsidy system based on wages.