1.

Explain the mechanism of planning in an Indonesian local government, including its rules,
procedures, and documents!
Planning in Indonesian local governments follows a structured mechanism that involves various
rules, procedures, and documents. Here is an overview of the planning mechanism in an
Indonesian local government:
Regulatory Framework:
Laws and Regulations: The planning process in local governments is governed by national laws,
such as Law No. 23/2014 on Regional Government, and regulations issued by the Ministry of
Home Affairs and other relevant ministries.
Regional Regulations: Local governments also enact their own regional regulations that provide
specific guidelines and procedures for the planning process at the local level.
Planning Documents:
RPJPD: Rencana Pembangunan Jangka Panjang Daerah (Long-Term Regional Development Plan)
is a strategic document that outlines the long-term vision, goals, and priorities for the region,
typically covering a period of 20 years.
RPJMD: Rencana Pembangunan Jangka Menengah Daerah (Medium-Term Regional
Development Plan) translates the goals and priorities of the RPJPD into actionable strategies and
programs for a period of five years.
RKPD: Rencana Kerja Pemerintah Daerah (Regional Government Work Plan) is an annual plan
that operationalizes the strategies and programs outlined in the RPJMD. It specifies the
activities, projects, and budgets for the upcoming fiscal year.
RAPBD: Rancangan Anggaran Pendapatan dan Belanja Daerah (Draft Regional Budget Plan) is a
detailed budget proposal that includes revenue and expenditure estimates for the upcoming
fiscal year. The RAPBD is based on the guidelines provided in the KUA and the specific priorities
outlined in the RKPD.
Planning Process:
Formulation: The planning process begins with the formulation of the RPJPD, which involves
data collection, analysis, and stakeholder consultations to identify regional development needs
and priorities.
Approval: The RPJPD and subsequent planning documents (RPJMD, RKPD) are subject to
approval by the regional parliament (DPRD) after undergoing a comprehensive review and
consultation process. This ensures democratic representation and accountability in the planning
process.
Implementation: Once the planning documents are approved, the local government implements
the programs and projects outlined in the RKPD. The implementation involves resource
allocation, project management, monitoring, and evaluation of the progress and outcomes.
Revision: The planning documents undergo periodic revisions to accommodate changing
circumstances, emerging needs, and new development priorities. The revision process involves
stakeholder consultations, data analysis, and adjustments to the strategies, programs, and
budgets as necessary.

2. Explain completely the budget function of Indonesian local governments! You have to give
examples to support and clarify your answer!
The budget function of Indonesian local governments involves the formulation, execution, and
control of the regional budget to allocate financial resources effectively and efficiently. It
encompasses several key processes and activities.
Examples of the budget function in Indonesian local governments can be seen in the allocation
of funds for building schools, providing healthcare services, constructing infrastructure such as
roads and bridges, implementing social welfare programs for disadvantaged communities, and
supporting local economic development initiatives. The budget function plays a crucial role in
translating policy priorities into tangible actions and ensuring the effective utilization of financial
resources to meet the needs of local communities.
Let's explore each of these aspects in detail:
Budget Formulation:
Preparation: The budget formulation process begins with the preparation of the RAPBD (Draft
Regional Budget Plan), which is based on the guidelines provided in the KUA (Budget Priorities
and Assumptions) issued by the central government. The local government identifies its
revenue sources, estimates expenditures, and aligns them with the development priorities
outlined in the RKPD (Regional Government Work Plan).
Revenue Projection: Local governments project their revenue sources, including tax revenues,
non-tax revenues, transfers from the central government (Dana Perimbangan), and other
income. For example, a local government may estimate revenue from property taxes, business
licenses, or fees for public services.
Expenditure Allocation: The local government allocates resources to various sectors and
programs based on the priorities outlined in the RKPD. For instance, funds may be allocated to
education, healthcare, infrastructure development, social welfare programs, and public
administration.
Budget Execution:
Revenue Collection: The local government implements measures to collect projected revenues,
such as taxes, fees, and charges. This involves tax administration, fee collection mechanisms,
and enforcement procedures.
Expenditure Implementation: The allocated funds are used to carry out various activities,
projects, and programs outlined in the approved budget. Examples include constructing schools,
improving healthcare facilities, maintaining roads, or providing social assistance to vulnerable
populations.
Budget Control:
Audit: The local government's financial statements and budget execution are subject to external
audit by the Audit Board (Badan Pemeriksa Keuangan or BPK). The BPK reviews the financial
statements and assesses compliance with regulations and the effective use of public funds.

3. Describe the following types of planning:

a) RPJP (Rencana Pembangunan Jangka Panjang or Long-Term Development Plan):
The RPJP is a strategic planning document that outlines the long-term vision, goals, and
priorities for a region or jurisdiction. It typically covers a period of 20 years and serves as a
guiding framework for regional development. The RPJP provides a roadmap for sustainable
development, addressing various sectors such as economic growth, infrastructure, social
welfare, environment, and governance. It sets the overall direction and objectives for the
region, helping to guide subsequent planning documents and initiatives. The RPJP undergoes a
participatory and consultative process, involving stakeholders from government agencies,
communities, civil society, and the private sector.
b) RPJM (Rencana Pembangunan Jangka Menengah or Medium-Term Development Plan):
The RPJM is a planning document that translates the long-term goals and priorities outlined in
the RPJP into actionable strategies and programs for a medium-term period. It typically covers a
period of five years and serves as a bridge between the long-term vision and the annual
planning cycle. The RPJM specifies the strategic directions, targets, and priority programs to be
implemented during the medium-term period. It aligns with the national development agenda
and considers regional characteristics, needs, and potential. The RPJM provides a more detailed
and operational framework for decision-making, resource allocation, and monitoring progress
towards achieving the long-term goals.

c) Annual Plan:
The annual plan is a planning document that operationalizes the strategies and programs
outlined in the medium-term development plan. It covers a single fiscal year and provides a
detailed roadmap for the allocation of resources, implementation of projects and activities, and
achievement of specific targets and objectives. The annual plan, also known as the RKPD
(Rencana Kerja Pemerintah Daerah or Regional Government Work Plan), is developed by local
governments and specifies the activities, projects, and budgets for the upcoming year. It
considers the regional priorities, available resources, and specific needs and challenges faced by
the region. The annual plan ensures that the medium-term development goals are broken down
into manageable and measurable actions, facilitating effective implementation and monitoring
of progress.

4) Explain the mechanism of budgeting in Indonesian local governments, including its rules,
procedures, and documents!
Regulatory Framework:
Laws and Regulations: The budgeting process in local governments is guided by national laws,
such as Law No. 23/2014 on Regional Government, and regulations issued by the Ministry of
Home Affairs and other relevant ministries.
Regional Regulations: Local governments also establish their own regional regulations that
provide specific guidelines and procedures for the budgeting process at the local level.
Budget Documents:
KUA: Kebijakan Umum Anggaran (Budget Priorities and Assumptions) is a document that
outlines the general budget policies, macroeconomic assumptions, revenue targets, and
expenditure priorities for the upcoming fiscal year. It serves as the basis for the preparation of
the regional budget.
PPAS: Penyusunan dan Penetapan Anggaran Pendapatan dan Belanja Daerah (Preparation and
Determination of Regional Revenue and Expenditure Budget) is a document that presents the
estimated revenues and planned expenditures for the upcoming fiscal year. It provides a
detailed breakdown of revenue sources, expenditure items, and their respective amounts.
Budget Process:
Formulation: The budget formulation process begins with the preparation of the KUA, which is
based on national guidelines and instructions from the Ministry of Home Affairs. The local
government identifies its revenue sources, estimates expenditures, and aligns them with the
development priorities outlined in the RPJMD (Regional Government Medium-Term
Development Plan).
Public Consultation: Local governments are required to conduct public consultations to gather
input and feedback from stakeholders, including communities, NGOs, and private sector
representatives. This ensures transparency, accountability, and participation in the budgeting
process.
Approval: The regional budget proposal, including the KUA and PPAS, is subject to approval by
the regional parliament (DPRD) after undergoing a comprehensive review and discussion. The
DPRD assesses the budget proposal's compliance with regulations, alignment with regional
priorities, and feasibility.
Execution: After the budget is approved, the local government implements measures to collect
revenue and execute the planned expenditures. This includes revenue collection, procurement
processes, financial management, and monitoring of expenditure execution.
Budget Control:
Monitoring: Local governments monitor the implementation of the budget to ensure that
revenue collection and expenditure execution align with the approved budget. This involves
regular tracking of revenue inflows, expenditure outflows, and progress in achieving budget
targets.
Audit: The financial statements and budget execution of local governments are subject to
external audit by the Audit Board (Badan Pemeriksa Keuangan or BPK). The BPK reviews the
financial statements and assesses compliance with regulations, transparency, and effective use
of public funds.
Throughout the budgeting process, local governments engage various stakeholders, including
government agencies, regional development planning agencies, communities, NGOs, and
private sector representatives. The aim is to ensure participatory decision-making, transparency,
and accountability in the allocation and utilization of financial resources.

5) Explain completely about "deficit budget". According to your opinion, the deficit budget is
good or bad? Explain your complete reason!
A deficit budget refers to a situation where a government's expenditures exceed its revenues in
a given fiscal year. In other words, it occurs when the government spends more money than it
collects through taxes, fees, and other sources of revenue. The deficit is usually financed
through borrowing, such as issuing government bonds or taking loans from domestic or
international sources.
Overall, the assessment of a deficit budget as good or bad depends on the specific context, the
purpose of the deficit, and its sustainability. In times of economic downturns or when used for
strategic investments that generate long-term benefits, a deficit budget can be viewed as a
necessary measure. This is such as for Stimulating Economic Growth, Addressing Social Needs,
and Financing Public Investments. However, if deficits are excessive, persistent, and not
sustainable, they can pose risks to fiscal stability and long-term economic well-being. It is crucial
for governments to carefully manage deficits, consider their economic and social implications,
and strive for a balanced approach to fiscal policy.