Jakarta tightens its grip on purse strings

Revenue sources: A worker handling roof tiles at a factory in Jatiwangi, West Java. Experts warn of rising social tensions and stalled development as local governments face shrinking funds and mounting pressure. — AFP

JAKARTA: The share of the state budget controlled by Jakarta is expected to climb from 72% in 2021 to 83% in 2026, leaving most programmes to be designed and implemented by the central government.

President Prabowo Subianto’s focus on funding costly flagship programmes, such as free nutritious meals and the Red and White Cooperatives, from next year’s state budget, could leave regions bearing the brunt, as the government plans to slash regional transfers (TKD) by nearly 25%.