Sri Mulyani: Transfer to Regions, Village Fund to Boost Regional Economic Recovery
Date 25 Agustus 2021
The Government’s budget which is allocated to Transfer to Regions and Village Funds (TKDD) in 2022 is expected to support regional economic recovery, maintain health sector, provide social protection, and encourage the use of Village Funds for village priority programs, Ministry of Finance Sri Mulyani has said.
“The Government has decided to continue strengthening the quality of fiscal decentralization through the TKDD policy in 2022 which is directed at economic recovery and improving the quality of its implementation, especially in improving the performance of regional governments,” Sri said during the Plenary Meeting with the House of Representatives to discuss the Bill on the State Budget for Fiscal Year 2022, along with the Financial Notes, Tuesday (24/8).
The TKDD policy in 2022 is directed at five priorities, including:
First, to improve the quality of regional spending to increase and to create equitable welfare among regions.
Second, to continue strengthening synergies of budget planning between ministries / agencies and TKDD, particularly related to the Physical Special Allocation Fund (DAK).
Third, to spend the General Transfer Fund (DTU) for improving the quality of public infrastructure and economic recovery in the regions as well as developing human resources.
Fourth, to boost the effectiveness of the use of Special Transfer Funds (DTK) through contract-based distribution of Physical DAK to reduce idle cash in the regions and Non-Physical DAK to encourage increased output and outcomes, as well as support the improvement of the quality of basic services.
Fifth, to prioritize the use of Village Funds for economic recovery in villages through social protection programs, COVID-19 response, and support priority sectors in villages.
Furthermore, in line with the implementation of the constitutional mandate in accordance with Article 18A paragraph (2) and Article 23A of the 1945 Constitution of the Republic of Indonesia, the Government drafted a Bill on Financial Relations between the Central Government and Regional Governments (RUU HKPD) as a renewal of Law Number 33 of 2004 on Financial Balance between the Central Government and Regional Government or Law Number 28 of 2009 on Regional Taxes and Regional Levies.
“The HKPD Bill is drafted to create a more efficient allocation of national resources through more transparent, accountable and fair financial relations to distribute public services and improve the welfare of the people,” Sri said.
The series of policies regulated in the HKPD Bill are expected to encourage equitable distribution of public services, sustainable regional economic growth, and improve the welfare of the people as an integral part of the national goals. (PR of Ministry of Finance/UN) (EST/EP)