Budgeting for a state or a country seems to be the most important part to handle administration and government policy in term of socio economic reason. In practice, a lot of government tends to subscribe a balance budget whereby it is striving to balance between revenues and expenditures accurately. Unfortunately, this balancing post uses a debt and foreign aid charged by interest to cover any shortage in revenues. In the real context, the budget deficit management based on debt is still controversial and considered inappropriate with developing country conditions which their economies
are unstable and fluctuated. Unfortunately, many countries in the world including Muslim-populated countries subscribe budget deficit system whereby the sources of its fund are backed up by debt. The focus of this paper is to analyze two main sensitive issues of the Indonesian economy in the light of Maqasid Al Shariah. This study employs a method of literature review and combined with data analysis. Actually, Islam has a very rich literature legacy in administrating public sector economy and it becomes important theory and framework as a stance or point of view to analyze the prevailing system. The high interest rate payment is the main issue of public sector expenditure. Indonesian government seems no choices to resolve its public sector economy and relies too much on debt management. For social welfare expenditure there has been a misallocation in emphasizing budget expenditure whereby oil and petroleum subsidy consume almost majority of the total welfare
expenditure in Indonesian public sector econom
