Home Affairs Minister Muhammad Tito Karnavian said that Regionally-Owned Enterprises have an important role in strengthening the capacity of Regional Original Revenue (PAD).
"Regional-Owned Enterprises (BUMD) are strongly encouraged to increase their regional revenue capacity so that their spending can avoid deficits. Many regions' spending exceeds their revenue targets (PAD)," Tito said at the 2025 Indonesia Best BUMD Awards. in Jakarta on Wednesday.
According to him, the existence of BUMD is also able to open up employment opportunities in the region, attract the active role of the private sector, and become a buffer zone. in strategic areas, including the food sector.
He explained that regional fiscal capacity is generally divided into three categories: strong, moderate, and weak. Regions with strong fiscal capacity are characterized by a higher dominance of local revenue (PAD) compared to revenue from central transfer funds.
