Analysis of Economic Performance as the Independence Indicators of Government in East Java Province

Abstract

The development of regional autonomy in general was not a linear with the financial condition of East Java Province which is less supported by funding sourced from local revenue (PAD). Therefore, the area required to manage the development of the region independently. This gives rise to consequences for the fulfillment of fiscal independence and freedom in collecting local revenues. The purpose of this study was to analyze the independence with economic indicators include: local revenue contribution to total local revenues, Routine Capability Index, and the ratio of Regional Financial Capability. In the era of regional autonomy is expected to become self-sufficient in the management of the authority which is marked by the growing strength of the fiscal capacity or local revenue. Meanwhile, the area was given assistance from the central government in the form of matching funds. However, the initial goal is to realize the autonomy of local fiscal capacity is strong in supporting the creation of regional autonomy. The theory used in this study is the theory of the regional financial capacity including the regional financial theory, the theory of regional autonomy and fiscal decentralization. Results from this study explains that the measurement of the proportion of the contribution of local revenue (PAD), Routine Capability Index (IKR) and regional financial capacity (KKD) ratio shows that the average number proportion of local revenue contribution, IKR and KKD ratio in the East Java is very low. So that, the level of independence in East Java is very low.