RURAL LOCAL GOVERNMENT SYSTEM IN
INDONESIA: Recent Issue on Making Authonomy Local by Fiscal
Decentralization
Author I (Mochamad Doddy
Syahirul Alam)a[1],
Author II (Bhayu Rhama) b
a University of
Palangka Raya, Faculty of Social and Politics, Department of Government
Studies, Yos Sudarso Street, Palangka Raya, Indonesia, Email:
doddyfisip@gmail.com
b University of Palangka Raya, Faculty of Social and Politics,
Department of Public Administration, Yos Sudarso Street, Palangka Raya,
Indonesia, Email : bhayu_rhama@yahoo.com
Abstract
Since
the end of 2014, Indonesian government did enlarge village autonomy in order to
accelerate rural prosperity. One of the way is giving fiscal decentralization
larger space to village government to accomodate the public demand. The good
news is the number of funding on village expenditure is bigger than before. By Law
number 6 /2014 every village in Indonesia have around 1 million rupiahs to fund
village operational and development. Head of Village Government and BPD also local
people involved to decide the purpose and the way to spend the money. The
village which have qualified capacity building tend to be successful in their
program, but in other side there are many village didn’t have qualified
capacity building and they don’t know how the way to start and to spend their
money. This is a challenge to the government to improve village government
capacity building. They must have good capacity building, good availability,
and good ability in personal, group, and organization.
Keywords:
Rural, Local Government System, Indonesia
Introduction
Local authonomy was run rapidly in
Indonesia since 2001. Local authonomy means central government giving larger
authority, more real, and more responsible. Especially in arranging enable, and
explore some potential resources in their own authority. By the local
authonomy, thus expected that economic development in their own local authority
getting better and better. No one economic lack among the authority, because
every one enable to achieve prosperity by exploring and take advantages of their
own resources.
By local authonomy, so that government
who centralized before have been changed to decentralized into many
municipality. In Indonesia decentralizing process was running till at present. There
were four type decentralization in Indonesia: political decentralization,
fiscal decentralization, administrative decentralization, and economic
decentralization. All of them will be integrated one another.
Fiscal decentralization is one of the actualization
between government and local government relationship. To achieve the goal of
fiscal decentralization, so that have been developed by grand design of fiscal
decentralization itself, whereby fiscal decentralization that want to achieve
in 2030 was “Efficient National Local Allocation Resources by Transparent and
Accountable Government and Local Government Relation”.
In fiscal decentralization road progress
in Indonesia, government try as much as they can do to ensure that vision of
fiscal decentralization can be achieved. One thing that government strived in
order to government and local government relation to be transparent and accountable
so that national resources allocation can run efficiently by enlarge local
authonomy based. Therefore government perform Law Number 6, 2014 about Village.
The main core of the policy was admitted village as local authonomy. So that
village have been given entire authonomy to take advantages of the resources. By
taken advantages of village’s resources such as financial authonomy entirely by
village government, so that the purpose that defined in fiscal decentralization
vision can be achieved maximum.
Villages
According to Kartodikusuma, village is a
unity of law whereas live a group of people with their own government (Ahmadi,
2003). Whereas according to Bintaro, village is a manifestation or unity of
geography, social, economy, politic and culture which extent in a place, in the
relationship and the influence reciprocal with the others place.
According to Paul H. Landis, as quoted
by Ahmadi (2003), village is a territory the people number is less than 2.500
people. And the nature is: a) to behave behavior knowing each other among
thousands people; b) there is sense of belonging each other which related with
tradition or culture; c) have livelihood with strong relationship and
influenced by the nature, such as climate, nature condition, wealth of nature,
then livelihood except agraris is just a side job.
Most of the government policy that
related with village development prioritize pure purpose, such as fighting
poverty, shifting village’s face physically, giving social village service,
till empowering the people and village government to be more modern. Unfortunately
a row of the purposes only stopped on the paper. Because village only being an
object by the actor of village development project, where the benefit only took
pleasure in by the actor.
Making authonomy
local
Fiscal
decentralization was given to local government in order to explore the income
resources, rights to transfer from higher government, and determine routine
expenditure and investment. Shortly, local government was given opportunity to
determine regulation in their own budget. Several purpose of fiscal
decentralization: first, to reduce fiscal
gap between central government and local government (vertical fiscal balance) and among the local government (horizontal fiscal imbalance); second, to increase public service
quality among local government; third,
to increase efficiency of national resources usage. By fiscal decentralization,
thus expected financial management being transparent and accountable and also
the transferring process to local government being objective, on time,
efficient, and fair.
Fiscal
decentralization was one of the implementation of relationship between central
government and local government. Some regulation was performed as fiscal
decentralization policy. First policy performed was Law number 22 and number
25/1999 which consist of Dana Alokasi Umum (DAU) – general allocation funds,
Dana Bagi Hasil (DBH) – revenue sharing, and giving limited authority in tax to
local government. Furthermore, that regulation was amendment and change to Law
number 32/2004 and Law number 12/2008 which the main point was focused on
monitoring mechanisme by central government and improvement accountability of
local government expenditure. Fiscal decentralization policy change was as a
reflection that fiscal demand in local government being bigger and bigger.
In the grand
design, vision of Indonesian fiscal decentralization was “Efficient National
Resources Allocation by Transparent and Accountable Relationship between Central
Government and Local Government”. To achieve that vision, there were some
mission that determined by government: first,
Developing financial relationship between government and local government that
minimizing the lack of vertical and horizontal; second, Developing local tax system that support efficient national
resources allocation; third,
Developing freedom of action in accountable local expenditure to achieve
minimum service standard; fourth,
Harmonize government and local government expenditure in order to achieve optimum
public service performance.
In line with
vision and mission of fiscal decentralization and to solve fiscal demand in
local government that being increasing, so that in 2014 government legitimize Law
number 6/2014 about village. Before that regulation, there was Law Number
32/2004 and Law number 12/2008 which state that village belong to district government.
To know more
about fiscal decentralization in the government village, so it can take look
from village financial administration system start from arranging process Anggaran
Pendapatan dan Belanja Desa (APBDesa) - The village budget revenue and
expenditure plans decided. From that process we can see the difference of
village decentralization before and after Law number 6/2014 implemented.
Before
Law Number 6/2014 implemented
In Minister of Domestic Affair
Regulation number 37/2007, able to see the process of arranging to the village
income and expenditure budget and decided.
In that regulation able to see that the draft of the village income and
expenditure budget arranged by referring to Rencana Kerja Pembangunan Desa
(RKP) – village development work plan that was defining of Rencana Pembangunan
Jangka Menengah Desa (RPJMD) – village mid-term development plans. The village
mid-term development plans arranged by Head of Village Government based on his
vision and mission while elected. From The village mid-term development plans
defined into RKP that arranged by direct local people participation in musyawarah
perencanaan pembangunan desa (musrenbangdes) – village development planning
deliberations.
By draft of the village income and expenditure
budget arranging process as well, it should be told that draft of the village
income and expenditure budget was aspiring and tend to public interest because
in the first step arrangement was involved the people directly. But, because
village decentralization was limited, so that draft of the village income and
expenditure budget must report to regent/major first to be evaluated. If regent/major
approve, or evaluation pass the time limit, so that Head of Village Government may
decide the draft to be the village income and expenditure budget. If draft of the
village income and expenditure budget considered not suitable with public
interest or breake the law and higher regulation, so that regent/major will
order to Head of Village Government and Badan Permusyawaratan Desa (BPD) –
village deliberation body to improve it. If Head of Village Government and BPD
do not do improvement and still decided, regent/major will postpone and
implement the previous period the village income and expenditure budget ceiling
by peraturan bupati/walikota - regent/major regulation.
Another side, village expenditure
consist of direct expenditure and indirect expenditure. Direct expenditure
consist of employee expenditure, good and service expenditure, and also capital
expenditure. Indirect expenditure consist of employee expenditure, subsidy
expenditure, grant expenditure, social help expenditure, financial help
expenditure, and unexpected expenditure.
In defraying side, village budgeting
consist of revenue budgeting and expenditure budgeting. Revenue expenditure
able consist of Sisa Lebih Pembiayaan
Anggaran Tahun Berjalan (SILPA) – remaining more financing of current year’s
budget in the previous year, a meltdown of storage fund, the result of selling
of the village affluence that have been divided, and a loan revenue. Whereas
expenditure budgeting consist of the arrangement of storage fund, village
taking part in capital, and debt payment.
In Minister Domestic Affair Regulation
number 37/2007 also explained about Alokasi Dana Desa (ADD) – allocation of
village funds. Primary, the goals and function ADD is the same with DAU that is
in order to reduce the gap of development among the villages in
decentralization context and in order to accelerate fighting poverty. ADD resources
came from Anggaran Pendapatan dan Belanja Daerah (APBD) – budget for regional
income and expenditure that based on counterbalance budget which district/city
gained 10%. Counterbalance budget means consist of tax sharing budget and
natural resources plus DAU. ADD almost the same with DAU, consist of two items,
that are Minimum and ADD Proportional. Minimum ADD decided
60% of total ADD, whereas proportional ADD decided 40% of total ADD. Every
village will get minimum ADD, whereas proportional ADD only given to village
which have high poverty rate, education rate, health rate, and marginal
infrastructure. So that more higher poverty rate in a village, more higher they
get proportional ADD. ADD usage itself have been decided based on usage
percentage which is 30% for aparature expenditure and village government
expenditure, which is 70% for people empowerment budget such as facilitation
maintainance, environtment and settlement, and also food purchasing endurance.
Related to the village income and expenditure
budget accountability, Head of Village Government give report as the
realization of the village income and expenditure budget to regent/major
through Head of Subdistrict at least one month after the end of budget year.
Figure 1
Type of Fiscal Decentralization
Model Before Law number 6/2014
After Law Number
6/2014 implemented
The implementation of Law number 6/2014
felt as a fresh wind for the village people. This regulation being a
fundamental yurisdiction to be confessed of the village existention as autonomy
territory. In the relationship with fiscal decentralization there are two main
points of Law number 6/2014; first,
related to 10% allocation budget of Anggaran Pendapatan dan Belanja Negara (APBN)
– state budget for all the village in Indonesia, whereas predicted that every
village will get budget around 1 million rupiahs per year; second, budget sharing that almost the same 1 million rupiahs,
although the capacity of village government was variative. This problem will be
anticipated by some fiscal decentralization regulations that regulate the
number of village budget based on demand and also the ability to manage by
government regulation.
As the operational regulation of Law number
6/2014, so government also publish Government Regulation number 43/2014. This
regulation set up some rule in the relationship with fiscal decentralization.
Related to The village income and
expenditure budget arrangement, there is a different principle between
Government Regulation number 43/2014 with Minister Domestic Affair Regulation
number 37/2007. The main different thing is on the authority of Head of Village
Government in order to decide The village income and expenditure budget. In
Minister of Domestic Affair Regulation number 37/2007, the people who have
right to decide The village income and expenditure budget is regent/major. But
in Government Regulation number 43/2014, the draft of the village income and
expenditure budget that prearrange by head of government village and BPD then
asking for evaluation to regent/major. Regent/major can delegate obligation to
evaluate draft of the village income and expenditure budget to Head of Subdistrict.
Then the decision making of the village income and expenditure budget did by
Head of Village Government at least December 31st.
Related to the village mid-term
development plans, in Government Regulation number 43/2014 The village mid-term
development plans arranged by village government with perform participative musrenbangdes.
BPD and local people, using for orientation to the village mid-term development
plans and at least contented vision and mission of Head of Village Government. The
village mid-term development plans will define into RKP Desa and used to the
village income and expenditure budget arrangement.
Related to village income, there is
additional point in Law number 6/2014 that is except of all kind of revenue
that noted in Minister of Domestic Affair Regulation number 37/2007, village revenue
sourced to APBN and the others legal revenue. Allocation of APBN sourced to
central government expenditure by making effective program based on village
commonly prevalent and equality. In Law number 6/2014 also decide that tax
reveneue sharing and local retribution regency/city at least 10% of revenue
realization giving to the village, whereas in Minister of Domestic Affair
allocation as big as 10% only arranged sharing revenue in tax. The allocation
of tax revenue and retribution based on the regulation as big as 60% divided in
average to all over of the village and 40% divided by proportional as big as
their contribution on tax revenue and retribution. Related to ADD given at
least 10% of counterbalance that received by regency/city in APBD after detracted
by DAK.
Related to village expenditure,
regulated that village expenditure prioritized to fulfill the demand of
development that agreed in village meeting and according to the priority of
local government (regency/city), province government, and central government.
In Government Regulation number 43/2014 define more that village expenditure used
to the rule at least 70% to fund village government performance, building up
village society, and village people empowerment; and also at least 30% used to
fixed income and incentive for Head of Village Government and the staffs,
village government operational, incentive and operational budget for BPD, and
also incentive for RT – neighborhood association and RW – citizens association.
Concerning related to village funding not defined detail in Law number 6/2014
neither in government regulation number 43/2014.
Figure 2
Type of Fiscal Decentralization
Model After Law number 6/2014
Acknowledgements
Related to ADD there is difference among
before and after implementation of Law number 6/2014. After Law number 6/2014
implemented, ADD to behave at least 10% of counterbalance that received by
regency/city in APBD after dectracted DAK. Concerning related to minimum ADD
and proportional didn’t define yet more in regulation.
Related to the village income and
expenditure budget accountability, Head of Village Government deliver two kind
of report, namely the village income and expenditure budget realization report
per semester maximum in the end of July
and the end of January also annual the village income and expenditure
budget realization report every the end of the budget year. The reports deliver
to regent/major by Head of Subdistrict.
Conclusion
Fiscal decentralization in village autonomy
getting improved especially by the born of Law number 6/2014 about village and
Government Regulation number 43/2014 about the implementation of Law number
6/2014 about village. The born of the regulations so that the coverage of
fiscal decentralization in the village getting larger. In fiscal
decentralization scoupe, village gain additional income having a form
allocation from APBN and the other legal revenue. Beside that there are some
regulations that more detail related to village expenditure and ADD. The
accountability of the village income and expenditure budget also expected to be
more transparent and accountable as well as vision and mission of fiscal
decentralization itself. But that things will not reached if not followed by
the strengthening of village government, availability, and ability of the
staffs and local people. If the capacity, availability, and ability of village
government and local people being affirmed so that the purpose of village autonomy
commonly and the purpose of fiscal decentralization particularly can be reached
maximum.
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