Home Minister Urges Regional Leaders to Optimize Regional Budget to Control Inflation

Minister of Home Affairs Tito Karnavian (08/21). (Photo by: PR of Cabinet Secretariat/Águng)

Minister of Home Affairs Muhammad Tito Karnavian Friday (08/19) issued Ministerial Circular Number 500/4825/SJ on the Utilization of Unexpected Expenses to Control Inflation in Regional Level. The circular is a follow-up to the directives of President Joko “Jokowi” Widodo at the 2022 National Coordination Meeting on Inflation Control on Thursday (08/18).

In the circular, the Minister urged all regional leaders all-over Indonesia to optimize State Budget in order to control inflation at a regional level including maintaining price affordability, people’s purchasing power, smooth flow of distribution and transportation, food price stability, and food supply.

The circular also stated that the Minister called on all regional leaders to collaborate with other regional governments and distribute social assistances for vulnerable groups in the region.

For the record, letter E.55.c of the appendix of Minister of Home Affairs’ Regulation Number 27 of 2021 on Guidelines for Preparation of the 2022 State Budget stated that in a bid to maintain stability of regional economy and to solve real-sector economic problems as well as maintain price affordability for goods and services, the regional governments were urged to carry out two major things, as follows:

First, the regional governments must support the Team for Regional Inflation Control (TPID).

Second, the regional governments must control price of goods and services including providing staple food through unexpected expenses in accordance with the laws and regulations.

Meanwhile, letter D.4.k of Chapter II of the appendix of Minister of Home Affairs’ Regulation Number 77 of 2020 on Technical Guidelines on Regional Finance Management stated that guidelines of the utilization of unexpected expenses to finance urgent needs were carried out through budget shifting from unexpected expenses to expenses of regional working units (SKPD)/related unit of SKPD.

The provisions are as follows:

First, in the event that the budget is not available yet, unexpected expenses are formulated in annual work and budget plans of SKPD (RKA-SKPD) on regional finance.

Second, in the event that the budget is not adequate yet, unexpected expenses are formulated in the amendment of budget implementation documents of SKPD (DPA-SKPD).

Third, the RKA-SKPD and/or DPA-SKPD as mentioned in the first and second step are the basis in implementing the amendment of Regulation of Regional Leader on Regional Budget Detailing that will be stipulated in Regional Regulation on the amendment of Regional Budget or be stipulated in Budget Realization Report for regional governments who do not amend the Regional Budget or have amended the Regional Budget. (PR of Home Ministry/UN)(AP/HD/MUR)