58 Per Cent of Village Fund Budget Allocated by Purbaya for Merah Putih Village Cooperative Development This Year

Jakarta, VIVA – The government has stipulated that 58.03 per cent of the 2026 Village Fund budget is to be allocated for the infrastructure development of Merah Putih Village Cooperatives (KDMP) throughout Indonesia.

This is set out in Minister of Finance Regulation (PMK) Number 7 of 2026, signed by Finance Minister Purbaya Yudhi Sadewa and effective from its promulgation on 12 February 2026.

“The allocation adjustment resulting from government policy to support KDMP implementation is calculated at 58.03 per cent of the Village Fund ceiling for each village, amounting to Rp34.57 trillion,” reads Article 15 paragraph (3) of PMK 7/2026, as quoted in Jakarta on Wednesday, 18 February 2026.

As explained in Article 20 paragraph (3), the use of Village Funds for KDMP implementation support comprises instalment payments for the physical construction of retail outlets, warehousing, and KDMP facilities. The disbursement of Village Funds to support KDMP is channelled directly from the State General Cash Account (RKUN) to the fund disbursement holding account.

The overall Village Fund allocation for the 2026 fiscal year is set at Rp60.57 trillion. The remaining Village Fund ceiling, beyond that used to support KDMP, is allocated as a regular ceiling valued at Rp25 trillion.

In general, the Village Fund budget is used to support sustainable development in each village. Article 20 paragraph (1) of PMK 7/2026 details these uses, including addressing extreme poverty through direct cash assistance (BLT), strengthening climate-resilient and disaster-resilient villages, and improving the promotion and provision of basic health services at the village level.

Further uses include food security or food reserve programmes, energy, and other village economic institutions, KDMP implementation support, construction and maintenance of village infrastructure through village cash-for-work programmes, digital infrastructure and technology development, and other priority sector programmes.

For the regular Village Fund scheme, disbursement is carried out through deductions from the Village Fund of each regency/municipality and the transfer of the deducted funds to the Village Cash Account (RKD).