Research Article
Optimizing Local Government Budgets For Mandatory Public Service Infrastructure Spending
@INPROCEEDINGS{10.4108/eai.11-9-2024.2354419, author={Budi Mulyana}, title={Optimizing Local Government Budgets For Mandatory Public Service Infrastructure Spending}, proceedings={Proceedings of the 1st Public Sector International Conference, PSIC 2024, 11-12 September 2024, Lombok Island, West Nusa Tenggara, Indonesia}, publisher={EAI}, proceedings_a={PSIC}, year={2025}, month={2}, keywords={mandatory spending infrastructure local governments budget}, doi={10.4108/eai.11-9-2024.2354419} }- Budi Mulyana
Year: 2025
Optimizing Local Government Budgets For Mandatory Public Service Infrastructure Spending
PSIC
EAI
DOI: 10.4108/eai.11-9-2024.2354419
Abstract
Over the next three years, all regional governments will be required to allocate at least 40% of their budgets to essential public service infrastructure spending. However, this requirement poses a significant challenge for regional governments as their current average investment in infrastructure falls well below the mandated level. This study aims to identify and analyse strategies for meeting mandatory infrastructure spending obligations through regional budget financing schemes. To achieve this goal, this study employed literature review and descriptive analysis. These findings provide several recommendations for future policy formulation. First, reallocating regional budgets to prioritise essential infrastructure spending is crucial. Second, efficiently utilising unspent funds from the previous fiscal year (known as SILPA) to boost infrastructure investment in the subsequent year can be beneficial. Finally, strategically using debt financing to develop infrastructure that enhances public service coverage and quality stimulates economic growth and potentially increases regional revenue.
