Nurul Izzah said policy reforms should leave them technically sound, yet socially acceptable, as part of moving away from blanket subsidies.

She cautioned that sudden policy shifts could trigger backlash among Malaysians who have long relied on subsidies.

“When we look at Indonesia and Nepal, the challenge is clear. If we make abrupt changes, those who depend heavily on government support will feel the impact the most, then we have a bigger problem: an angrier rakyat.

“Our plans must be technically feasible, socially acceptable, and organisationally implementable,” she said at a forum on the multidimensional poverty index (MPI) here.

The former MP said the Madani government had continued with direct cash payments for the distribution of aid, adding that the MPI would allow federal funds to be better directed to those in need.

“The challenge is how to use the MPI effectively,” she said.

“With better data, we are able to better allocate national funds to those who need it.”

Putrajaya spent RM81 billion on subsidies in 2023, 26% more than projected, due to the rise of fuel prices amid the Ukraine-Russia war.

The government subsequently launched several measures to move away from blanket subsidies, including the introduction of targeted subsidy programmes for diesel and RON95 petrol, and the lifting of chicken egg subsidies in August.

The BUDI95 initiative is already expected to save Putrajaya between RM2.5 billion and RM4 billion a year, while the removal of chicken egg subsidies is projected to slash the subsidy bill by up to RM45 million a month.