{
    "success": true,
    "data": {
        "id": 1888676,
        "msgid": "additional-regional-transfers-deemed-necessary-for-490-local-governments-facing-fiscal-pressure-1785329728",
        "date": "2026-07-29 18:47:32",
        "title": "Additional Regional Transfers Deemed Necessary for 490 Local Governments Facing Fiscal Pressure",
        "author": "",
        "source": "ANTARA_ID",
        "tags": "",
        "topic": "Economy",
        "summary": "An economist argues that planned additional central government transfers are a necessary short-term fix for 490 Indonesian regional administrations struggling to fund mandatory spending, including civil servant salaries. However, he warns that without parallel efforts to boost locally generated revenue, the policy risks fostering long-term dependency. The government is urged to tie the extra funds to clear performance indicators and fiscal reforms.",
        "content": "<p>Jakarta (ANTARA) - Yusuf Rendy Manilet, an economist at the Center of\nReform on Economics (CORE), has assessed that the plan to increase\ntransfers to regions (TKD) for 490 regional governments is a much-needed\nsolution to maintain the continuity of regional operations.<\/p>\n<p>\u201cThe plan to add transfers to regions for around 490 areas\nexperiencing fiscal pressure is an appropriate step to address\nshort-term needs,\u201d Yusuf said when contacted by ANTARA in Jakarta on\nWednesday.<\/p>\n<p>According to him, many regional governments face fiscal constraints\nin the 2026 fiscal year, particularly in meeting personnel expenditure,\nincluding salaries of contractual government employees (PPPK), as well\nas financing basic services.<\/p>\n<p>Therefore, the additional transfers are essential so that government\noperations and public services continue to run without placing greater\npressure on regional finances.<\/p>\n<p>However, he added, this policy does not resolve the fundamental\nproblem from a long-term fiscal perspective.<\/p>\n<p>He believes many regions remain highly dependent on central transfers\nbecause their locally generated revenue (PAD) capacity has not developed\noptimally.<\/p>\n<p>\u201cThis means additional TKD will only serve as a temporary cushion if\nit is not accompanied by efforts to strengthen regional revenue\nsources,\u201d he said.<\/p>\n<p>For this reason, Yusuf suggested that the additional budget should be\naccompanied by clear performance indicators, oversight of fund usage,\nand encouragement of spending efficiency to avoid moral hazard, a\nsituation in which regions become increasingly reliant on central\nassistance and lose the incentive to improve their fiscal\nindependence.<\/p>\n<p>Going forward, the government is also urged to ensure that additional\nTKD is allocated based on genuine fiscal needs rather than distributed\nevenly.<\/p>\n<p>At the same time, reforms to strengthen PAD through optimising\nregional taxes, asset management, and investment cooperation must\ncontinue to be pursued.<\/p>\n<p>\u201cWith such an approach, additional TKD would not only be a short-term\nsolution but also a transition towards a healthier and more sustainable\nregional fiscal structure,\u201d he said.<\/p>\n<p>Earlier, Minister of Finance Purbaya Yudhi Sadewa announced the plan\nto increase TKD allocations for 490 regional governments facing budget\nconstraints to finance mandatory spending.<\/p>\n<p>However, the implementation of the plan is still awaiting a decision\nfrom President Prabowo Subianto.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/additional-regional-transfers-deemed-necessary-for-490-local-governments-facing-fiscal-pressure-1785329728",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}