This article examines the challenges of maintaining democratic and socially responsive public services amid fiscal efficiency policies in Indonesia’s decentralized governance system. Fiscal efficiency aims to optimize the use of public resources; however, its implementation may reduce local governments' capacity to fulfil basic public service obligations and protect citizens’ rights. This study aims to develop a democratic public service model that remains responsive to social needs while accommodating the need for budget efficiency. The research employs a normative juridical method using statutory and conceptual approaches. Primary legal materials include legislation on national development planning, legislative formation, regional government, government administration, and public services, supported by relevant secondary legal materials and analyzed descriptively and evaluatively. The study finds that budget efficiency should not be implemented unilaterally or solely on administrative and fiscal grounds. Instead, public service policies should be based on identifying actual social problems, meaningful public participation, evidence-based policy formulation, communicative deliberation, and continuous monitoring and evaluation. The analysis further shows that effective coordination between central and regional governments is essential to maintaining alignment among national development planning, regional autonomy, and public service delivery. Accordingly, fiscal efficiency should function as an instrument for improving public service quality rather than reducing the state’s capacity to fulfill public needs. This model contributes a framework for integrating fiscal efficiency, democratic governance, and social responsiveness within Indonesia’s decentralized public administration.