Preventing Kopdes Default: Will TKD Budget Increase Further in 2027?
The Budget Committee (Banggar) of the House of Representatives (DPR), in collaboration with the government, has agreed to optimise the increase of regional transfer funds (TKD) in the 2027 Draft State Budget (RAPBN).
In the initial draft agreed upon by the working committee (panja) for 2027 TKD policy, the TKD budget is projected to range between 2.55% and 2.79% of the Gross Domestic Product (GDP).
The Chairman of the DPR Budget Committee, Said Abdullah, stated that the 2027 TKD policy will be optimised to support development targets, accelerate national priority programmes, strengthen the quality of fiscal decentralisation, and enhance equitable distribution.
“Considering the optimisation of the increase in the 2027 Regional Transfer budget allocation,” said Said while reading the agreement of the TKD Policy Working Committee during a preliminary discussion meeting for the 2027 RAPBN with Finance Minister Purbaya Yudhi Sadewa on Monday (29/06/2026).
He also noted that the direction of the 2027 TKD policy will aim to achieve equitable development across regions, strengthen regional fiscal capacity in delivering public services, and support the implementation of regional autonomy.
Furthermore, the 2027 TKD budget will be directed towards helping regions achieve sustainable fiscal adjustments, maintaining the continuity of public services, and anticipating social and employment risks that may arise from high personnel expenditure pressures, particularly regarding the financing of Government Employees with Work Agreements (PPPK) in the regions.
Additionally, the budget will strengthen fiscal support to increase synergy between TKD and Ministry/Agency spending, while providing affirmation to regions still facing high personnel expenditure pressures.
“Thus, the goals of improving infrastructure quality and public services can be achieved optimally without excessively burdening regional fiscal capacity,” he emphasised.
On the other hand, Said mentioned that the 2027 TKD will also prepare adequate risk mitigation policies to ensure that potential financial issues or defaults in the implementation of the Merah Putih Village Cooperative (KDMP) do not impact the capacity of Village Funds.
Village funds, which are part of the TKD, will be maintained to support development, community services, and the strengthening of the village economy, ensuring that the goals of sustainable village development can still be achieved optimally.
“Preparing adequate risk mitigation policies so that potential financial problems or defaults in the implementation of KDMP do not impact the capacity of village funds,” Said explained.