Village Fund Allocation Increased to Rp71 Trillion in 2025

Based on Law Number 1 of 2022, village funds are part of the regional transfer funds (TKD), a budget item in the state budget (APBN) allocated and channeled for management by local governments.

Village funds are intended for villages to support the financing of government administration, development implementation, community empowerment, and community affairs.

In the 2025 State Budget Plan (RAPBN), the government allocated Rp71 trillion for village funds. This is an increase of Rp142 billion or 0.2% compared to the 2024 outlook of Rp70.9 trillion.

According to the 2025 Financial Note, the general policy direction for Village Funds in 2025 will focus on supporting:

1. Sharpening the policy of allocating Village Funds by considering village performance.
2. Directing the priority use of Village Funds to support sustainable development through poverty and stunting reduction; the utilization of technology and information for the acceleration of digital villages; and building labor-intensive cash-based villages.
3. Encouraging village independence through the provision of rewards in the form of performance allocations and village incentives.
4. Improving the quality of village governance through the channeling of Village Funds based on the performance of implementers; direct channeling from the Village Work Plan (RKP) and Village Development Plan (RKD); allocation of Village Fund incentives for villages with good performance; and the imposition of sanctions in the form of termination of fund disbursement to villages that misuse village funds.
5. Improving the quality of data and electronic-based integrated village financial management.

Village funds were first allocated in 2015, amounting to Rp20.76 trillion. Over time, the allocation of Village Funds has continued to increase.

The development of Village Funds from 2020-2024 shows a fluctuating trend, from Rp71.1 trillion in 2020 to Rp70.85 trillion in the 2024 outlook.

Similarly, the average Village Funds received per village fluctuated from Rp949.8 million per village in 2020 to Rp943.4 million per village in 2024.

"These fluctuations occurred due to budget adjustments during the Covid-19 pandemic, but have recovered since 2023," wrote the Ministry of Finance in the 2025 Financial Note.