VILLAGE FUND OPTIMIZATION STRATEGY FOR RURAL COMMUNITY WELFARE IN INDONESIA

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Local Governance and Development Local Government Finance and Decentralization Economic Growth and Fiscal Policies

Abstract

The term village funds and village-owned enterprises appear intensively in Law No. 6/2014 concerning Villages. One of the Village Law implications is related to the Village Fund policy which is the fund from the State Budget and Expenditure (APBN). The purpose of the Village Fund is basically to promoting inclusive economy with more income distribution. Another implication is the authority to regulate, manage and organize village resources for the communitys economic development through the establishment of Village Owned Enterprises (BUMDes). The limited utilization of village funds for development and empowerment has made it inflexible to fulfill community needs. Village fund allocation for capital participation in the Village Owned Enterprise could be an offered solution without breaking existing regulations.

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