Bima Arya Reveals Many Regions Still Dependent on Central Government Fund Transfers
Bogor, CNBC Indonesia - Deputy Minister of Home Affairs (Wamendagri) Bima Arya has revealed that the fiscal condition of Indonesia’s regions remains highly vulnerable, with the majority still dependent on fund transfers from the central government or the Ministry of Finance (Kemenkeu).
Bima said that 86% of regions still depend on transfers to regions (TKD). He detailed that regions with highly vulnerable fiscal conditions are mostly at the district/city level.
“The fiscal capacity condition of regions: 86% of regional governments are still highly dependent on funds from the central government, or transfers to regions (TKD). Provinces may be stronger, with 53% still having strong fiscal conditions, but in cities, only 16% remain strong, and in districts even fewer, only 2%,” Bima said at the Plenary Session of the Indonesian Economists Association (ISEI), Thursday (27/8/2026).
This indicates that regional autonomy implemented over the past 30 years has not yet been able to strengthen regional fiscal conditions. The dependence of regions on central fund transfers also signals that decentralisation has not been running smoothly.
“So our autonomy has not necessarily, within 30 years, strengthened regional fiscal capacity. Likewise, decentralisation has not been effective,” Bima explained.
Therefore, his ministry will finalise the grand design for regional autonomy arrangement so that regional governments can become more independent. This effort is also carried out under a special assignment from Commission II of the Indonesian House of Representatives (DPR RI).
“We see today that decentralisation is being questioned, whether we are moving towards recentralisation or what format is appropriate. We have been assigned by Commission II of the DPR to finalise the grand design for regional autonomy arrangement, so by December 2026, we hope the regional autonomy design can be completed,” he said.
Furthermore, his ministry will also evaluate the distribution of TKD to regions, particularly regarding the format of revenue-sharing funds (DBH) and general allocation funds (DAU), so that the distribution can be fairer. He revealed this because many regional governments have complained about the distribution.
“How we divide regional wealth ideally in the DBH and DAU format, because many regional heads feel the formula is not quite right and not fair enough, so it is not optimal. So going forward, decentralisation requires arrangement and refinement,” Bima stated.