Tuesday, October 19, 2021

Minister of Finance: 324 Local Governments Absorb Aid Budgets Below 15 Percent

Finance Minister Sri Mulyani said the regional government would disburse assistance of Rp. 25.46 trillion during this pandemic. The budget is sourced from the budget allocated for the mandatory expenditure of general transfer funds.

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The details are Rp12.1 trillion for social protection and Rp13.35 trillion for economic empowerment. Nevertheless, said Sri Mulyani, the absorption of local government budgets for assistance in the form of social protection and economic support is still low.

The Minister of Finance of the Republic of Indonesia, Sri Mulyani. (Photo: VOA)

“There are 324 regions where the realization of spending on social protection and economic support is only 6.2 percent. This means 59.8 percent of regions from all regions in Indonesia,” Sri Mulyani explained in an online press conference, Wednesday (21/7/2021).

Meanwhile, the absorption is more than 50 percent, said Sri Mulyani, as many as 24 local governments. He hopes the government can increase the absorption of the budget to help people who are affected in the midst of the corona pandemic.

Graphics: Ministry of Finance

Graphics: Ministry of Finance

Sri Mulyani also highlighted the low realization of Village Cash Assistance (BLT) at Rp6.11 trillion out of a total budget of Rp28.8 trillion this July. The government targets this Village BLT for 8 million families with assistance of Rp. 300,000 for 12 months.

“The number of villages that have just absorbed less than 15 percent are 163 regions whose realization is only Rp. 938.3 billion. Even though the budget is Rp. 11.51 trillion,” added Sri Mulyani.

According to Sri Mulyani, there are 21 local governments that distribute Village BLT above 50 percent. Among them are Manggarai Regency, Denpasar City, and Sleman Regency.

Why is Budget Absorption in Regions Low?

Director of the Center of Economic and Law Studies (CELIOS) Bhima Yudhistira said there were several factors that caused the absorption of local government budgets and village BLT to be low. Among other things, there is no synchronization of data from the central government with the regions and technical administrative difficulties from the village government. In addition, he said, technical implementers or officials who made commitments were afraid of being punished for administrative errors.

Director of the Center of Economic and Law Studies (CELIOS), Bhima Yudhistira.  (Photo: VOA)

Director of the Center of Economic and Law Studies (CELIOS), Bhima Yudhistira. (Photo: VOA)

“So if there are officials who are hesitant to make a decision to disburse the budget, there is assistance. Now this must be evaluated why there is such a concern,” explained Bhima to VOA, Wednesday (21/7/2021).

Bhima recommended that the central government or the ministry of social affairs create an integrated data center for beneficiaries that can be used as a reference for all regions. This is to anticipate the occurrence of overlapping data as is happening today. For BLT Desa, Bhima recommends the community to directly monitor the supervision of this aid distribution so that the recipients of aid can be more evenly distributed.

Bhima also recommended that the central government step down directly to provide consultation assistance to regions having administrative difficulties in budget absorption. However, he suggested that the government should impose strict sanctions if there are local governments who deliberately withhold these funds in the midst of the pandemic just to get interest profits from banks.

“There must be severe sanctions from the central government. For example, the funds will be cut and the regional heads will receive sanctions,” added Bhima. [sm/em]

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