Village Funds Heavily Cut for Koperasi Merah Putih, Village Heads Urged to Tap Local Revenue Sources

The Head of the Central Java Provincial Agency for Community and Village Empowerment, Population and Civil Registration (Dispermadesdukcapil), Nadi Santoso, has called on village heads to develop their villages’ own-source revenue (PADes) potential. This comes as the bulk of this year’s Village Fund will be allocated to the Koperasi Desa Merah Putih (KDMP) programme.

Nadi revealed that Central Java’s Village Fund allocation this year amounts to Rp 6.8 trillion. Of that figure, Rp 2.6 trillion has been designated as regular Village Fund disbursements. “Meanwhile, around four trillion and change is for KDMP. However, the precise figure has not yet been released by the Ministry of Finance,” he said on Tuesday (24/2/2026).

Nadi explained that last year, each village in Central Java received an average Village Fund allocation of Rp 1 billion. However, with a significant portion of this year’s budget ring-fenced for the KDMP programme, each village will receive only between Rp 300 million and Rp 400 million.

According to Nadi, the reduction in regular Village Fund allocations due to KDMP requirements will inevitably affect village empowerment and development programmes. He therefore urged village officials to direct their remaining budget allocations towards priority programmes decided through village deliberation forums (musyawarah desa).

Nadi acknowledged receiving complaints from village heads regarding the reduced Village Fund allocations. “But we always try to convey the understanding that village heads must now truly prioritise spending according to actual needs,” he said.

“Furthermore, we advise that villages must be able to tap into their own-source revenue. They should not rely solely on transfer funds from either the provincial or central government. Village own-source revenue can come from village treasury land, village-owned enterprises (BUMDes), and other business activities,” Nadi added.