Regional Transfers Cut, Government Focuses State Budget on Direct Distribution to the People
JAKARTA - The government has set the allocation for Regional Transfers (TKD) in the 2026 Draft State Budget (RAPBN) at IDR 650 trillion, a 29.34 percent decrease compared to the previous year's budget of IDR 919.9 trillion in the 2025 State Budget APBN.
Finance Minister Sri Mulyani Indrawati explained that this decrease is part of the government's strategy to shift some of the budget to ministry/institution (K/L) spending, which will reach IDR 1,376.9 trillion next year.
Sri Mulyani stated that this spending is focused on directly supporting low-income communities.
"The adjustment to the TKD allocation is a consequence of the government's policy to increase the allocation of K/L spending, which is directed directly to the benefit of the community and supports priority programs implemented in the regions, which should benefit all regional communities," she said at the Third Plenary Session of the 2025-2026 First Session Year, Thursday, August 21.
She added that this policy aligns with President Prabowo Subianto's policy direction, namely to ensure a more visible state presence, particularly through services such as health, education, housing, the Red and White Village Cooperative, and various other strategic programs.
Sri Mulyani added that energy subsidies and social assistance continue to be pushed to be more targeted, based on the National Disaster Mitigation System (DTSEN).
The following is a breakdown of the Regional Disaster Mitigation (TKD) components that experienced a decrease:
- The Revenue Sharing Fund (DBH) will be IDR 45.1 trillion, a significant decrease from IDR 192.3 trillion in the 2025 State Budget.
- The General Allocation Fund (DAU) will decrease to IDR 373.8 trillion from IDR 446 trillion in the 2025 State Budget.
- The Special Allocation Fund (DAK) for 2026 will be IDR 155.1 trillion, down from IDR 185.2 trillion in the 2025 State Budget.
- The Special Autonomy Fund will be reduced to IDR 13.1 trillion from IDR 17.5 trillion in the 2025 State Budget.
- The Village Fund will be IDR 60.6 trillion, down from IDR 71 trillion in the 2025 State Budget.
- Fiscal incentives will be allocated at IDR 1.8 trillion, down from IDR 6 trillion in 2025.