Minister of Home Affairs Muhammad Tito Karnavian asked the Regional People's Representative Council to synergize with regional heads in order to strengthen fiscal independence.
According to the Minister of Home Affairs, in addition to relying on transfer income from the central government, the DPRD must also encourage innovation and breakthroughs in increasing Regional Original Income (PAD) and exploring the potential of other strategic sectors.
"The main income is the first from central transfers, the second from PAD. The two most important," said Tito.
This was conveyed by Tito at the Inauguration of the National Executive Board of the Association of Indonesian Regency DPRD (ADKASI) for the 2025–2030 Period and the ADKASI Seminar in Jakarta, Thursday.
Tito also reminded that the DPRD is part of the regional government administration element that has a strategic function in legislation, budgeting, and supervision.
The Minister of Home Affairs highlighted that so far the DPRD has tended to focus more on the spending side, while its role in encouraging increased revenue has not been optimal.
He emphasized that the Regional Revenue and Expenditure Budget (APBD) must be managed like a healthy household, namely that income must be greater than expenditure.
"The basic principle is how to make income more than spending. If income is more than spending, then there is a surplus. If there is a surplus, then it can create other programs. Including incentives for regional administrators," he said.
In his presentation, the Minister of Home Affairs said that most regions in Indonesia still depend on central transfer funds. Only a few regions are fiscally independent, such as Badung Regency and Gianyar Regency which have high PAD.
In contrast, many other regions still rely on central transfers, even amounting to more than 90 percent.
"Badung is still the strongest and can build many programs. The budget, if I'm not mistaken, is almost IDR 10 trillion, IDR 10 trillion. Higher than the province, the province is more than IDR 6 trillion, it can even help other regions, it can even help the province too," he said.
Furthermore, the Minister of Home Affairs reiterated the direction of the President and the Minister of Finance that regional spending must be directed at real sectors that support economic recovery and maintain the continuity of the supply chain, such as food, logistics, and the entertainment sector, so that income can be increased.
"It should not happen, spending is more, spending targets are more than revenue targets. That is called a deficit, if there is a deficit, it will usually use the remainder of last year, SiLPA, Surplus Budget Utilization or debt," he said.
