Purbaya Urges Local Governments Not to Keep Excessive Funds in Banks
Finance Minister Purbaya Yudhi Sadewa has requested that local governments avoid keeping excessive funds in banks so that these budgets can provide a more optimal economic impact for the community.
He stated that the use of regional budgets needs to be optimised so that every rupiah distributed can contribute to the economy. “Please convey to the regions: do not keep too much money in the banking sector, as the economic impact becomes less noticeable,” Purbaya said during a Working Meeting of Committee IV of the DPD RI in Jakarta on Monday.
He emphasised that local governments need to accelerate budget execution so that available funds can immediately benefit people in the regions. “They should optimise the money. Every rupiah we distribute to the regions should have an optimal impact on the economy,” he added.
Purbaya reported that the financial condition of the regions as of 30 August 2024 remains relatively good, with funds held in banks reaching Rp195.2 trillion. Nevertheless, this condition must be accompanied by the acceleration of budget realisation to ensure regional funds provide optimal benefits for the quality of public services.
Meanwhile, Purbaya noted that the allocation for Regional Transfer Funds (TKD) in 2025 is set to increase by Rp42 trillion, or 6.06 per cent, compared to the initial 2024 ceiling. Consequently, the total budget allocated for 2025 will reach Rp735 trillion, an increase from the Rp696.89 trillion allocated in 2024.
He explained that transfers to the regions continue to increase. In addition to the TKD, central government spending that benefits people in the regions has also risen. “Central spending enjoyed by people in the regions has increased to Rp1,445 trillion, an increase of Rp85 trillion. Last year, that amount was only around Rp1,300 trillion. So, even when last year’s regional spending was reduced by Rp200 trillion, central spending benefiting the regions actually rose by Rp400 trillion,” Purbaya clarified.
“This year, it has been increased again by Rp85 trillion. Therefore, in terms of the total net amount, the money spent in the regions has never actually decreased,” he added.