He made the remarks during the launch of the "Joint Circular for the Goods/Service Procurement of BLUD in the Health Sector" here on Thursday.
"We encourage work units that can become BLUD so that we can get new sources of income for regions, not only relying on the central government," he added.
He said that Indonesia's population growth and demographic dividend can be a big capital to make leaps in the future.
Several survey institutions have predicted that Indonesia will be the fourth most dominant player in the world economy in 2045–2050.
However, it must be accompanied by the strengthening of the health sector and better education.
"The key is building human resources. Therefore, all educational and health infrastructures must be improved; a reform must really be carried out," he stressed.
He also noted that there are three main sources of regional government income, namely transfers from the central government, Regional Original Income (PAD), and other sources, which include regional-owned enterprises (BUMDs) and BLUDs.
When BUMDs and BLUDs are managed properly and professionally, local governments can gain profits that can be used to strengthen the regional budget (APBD).
The Ministry of Home Affairs has highlighted that in managing the regional budget, the income must be larger than the expenditure.
When the income is larger, the surplus can be used by the regional government to fund various programs.
Moreover, regional governments can use Indonesia's rich natural resource reserves to bolster the BLUDs in their respective regions.
"We can realize BLUDs in the health sector and the guidance that we provide together with the National Public Procurement Agency (LKPP) will improve the health system and the regional income," Karnavian said.
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Translator: Narda Margaretha, Raka Adji
Editor: Azis Kurmala
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