<p><em>Economic development is characterized by increasing productivity and per capita income of the population resulting in improvements in welfare. This research aims to examine the direct and indirect influence of local revenue and general allocation funds on per capita income through capital expenditure as an intervening variable. This research is research that uses secondary quantitative data tested using multiple regression methods using path analysis and the Sobel test. This research sample represents the population studied using a total sampling technique obtained from 5 districts/cities in industrial areas over an 8 year period. The data source for this research is the APBD Realization Report document obtained from the website of the Director General of Financial Balance and the Central Statistics Agency via the internet. Partially, it was found that the regional original income variable had a significant effect on capital expenditure and per capita income. However, partially general allocation funds do not have a significant effect on capital expenditure and general allocation funds and capital expenditure do not have a significant effect on per capita income. Based on the Sobel test, it shows that local original income and general allocation funds do not have a significant effect on per capita income through capital expenditure as an intervening variable.</em><strong><em></em></strong></p><p><strong>Keywords: </strong><em>Original Regional Income, General Allocation Funds, and Per Capita Income, and Capital Expenditures.</em></p>