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CHAPTER 22 PUBLIC FINANCIAL MANAGEMENT SYSTEM

The Public Financial Management System (PFMS), earlier known as Central Plan Schemes Monitoring System (CPSMS), is a Government of India public financial management reforms initiative which monitors programs in the social sector and tracks funds disbursed.

Given the large number programs on which the money is spent, the CPSMS/PFMS is an initiative by the Indian Central Government to ensure that the money is spent according to its intended purpose, and provide an accounting of same.

It is a web-based online software application developed and implemented by the Office of Controller General of Accounts (CGA), Ministry of Finance.

PFMS was initially started during 2008-2009 in four States of Madhya Pradesh, Bihar, Punjab and Mizoram for four Flagship schemes e.g. MGNREGA, NRHM, SSA and PMGSY as a Central Sector Scheme of Planning Commission with the objective of tracking funds released under all Plan schemes of the Government of India, and real time reporting of expenditure at all levels of Programme implementation.

After the initial phase of establishing a network across Ministries / Departments, it has been decided to undertake National rollout of CPSMS (PFMS) to link the financial networks of Central, State Governments and the agencies of State Governments.

Subsequently in the year 2013, the scope was enlarged to cover direct payment to beneficiaries under both Plan and non-Plan Schemes.

The scheme was included in 12th Plan initiative of Planning Commission and Ministry of Finance.

In December, 2013 the Union Cabinet approved the national roll out of PFMS for all States and schemes for a period of four years till 2017 as follows:

(i) Total outlay of the scheme to be implemented through the O/o CGA would be not more than Rs. 1080 crore.

(ii) Four-tiered project organization structure viz.

I. Project Implementation Committee (PIC) at apex level

II. The Central Project Management Unit (CPMU) at Centre

III. State Project Management Unit (SPMU) at State level

IV. District Project Management Unit (DPMU) at district level to be manned through outsourcing

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In 2017, the Government scrapped the distinction between plan and non-plan expenditure.

The primary objective of PFMS is to facilitate a sound Public Financial Management System for the Government of India (GoI) by establishing an efficient fund flow system as well as a payment cum accounting network.

At present, the ambit of PFMS coverage includes Central Sector and Centrally Sponsored Schemes as well as other expenditures including the Finance Commission Grants.

PFMS provides various stakeholders with a real time, reliable and meaningful management information system and an effective decision support system, as part of the Digital India initiative of GoI.

PFMS is integrated with the core banking system in the country.

Objectives of PFMS

• Monitoring of flow of funds from Centre to the lowest level of implementation- both for fund flows to State Consolidated Funds & to Implementing Agencies.

• Registration, along with their bank accounts, of all agencies receiving plan funds - at all tiers of operation

• Payment to ultimate beneficiaries through banking channel

• Reduction of float/ funds in the agency bank accounts

• “Just in time” provision of funds to agencies, based on floats/ funds available.

• Capturing component-wise expenditure on real time basis at all tiers of implementation, including at Panchayat and village levels

• Decision Support System (DSS) to all levels of programme administration (Centre, State, District & Local Government, i.e. Panchayat / Municipality)

• Enhance transparency & accountability in public expenditure.

Different Stakeholders

• NITI Aayog as owner of project.

• O/o Controller General of Accounts as implementing Agency

• Program Divisions in Ministries as Scheme Owner

• PAO/DDO as fund release and accounting entity

• RBI as banker to the Centre and State governments.

• State Finance and other Departments

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• Treasuries Payment units of State Governments

• Banks

• Post Office

• NPCI, IDRBT as intermediaries in financial transaction settlement system

• Scheme Implementing Agencies at all level.

• Comptroller and Auditor General as external auditor

How will it benefit government?

• It aims at promoting transparency and bringing about tangible improvements in overall Central Government Financial Management as well as implementation of various Central Government Schemes across the country.

• The PFMS aims to help in complete tracking and monitoring flow of funds to implementing agencies and ensuring timely transfer of funds.

• It will help government to ascertain actual status of utilization of funds by multiple implementing agencies of central and the state governments.

• It will also cut need for paper work and in long way help in monitoring and tracking of any unnecessary parking of funds by implementing agencies, thus minimising cases of delay and pending payments to large extent.

• It will help to plug leakages in system and help to manage and maintain data that government can use to develop more scientific approach.

• The Public Financial Management System (PFMS) after implemented on full scale will help Union Government to save a significant amount on interest costs.

• It will allow the government to monitor and access more than Rs.1 lakh crore of idle funds lying with it under various heads.

• Once government access these funds through PFMS, it does not need to borrow that amount.

CPSMS won the Microsoft Developer Innovation & Excellence Award in 2009

For more information about PFMS, visit website https://pfms.nic.in/

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PFMS Website Screenshot

The page contains a screenshot of the Public Financial Management System - PFMS website.

At the top, the website identifies:

Public Financial Management System - PFMS

O/o Controller General of Accounts, Ministry of Finance

The screenshot also shows a Login option.

Website navigation/content visible in the screenshot

The page visually shows sections including:

Today’s Transactions
FY 2020–21 Transactions
Know your Payments
Get Login Details
What’s New?
Publications
Help Desk
Manage Registered Agency
Direct Benefit Transfer (DBT)
Centrally Sponsored Schemes
Central Sector Schemes
Others

The screenshot is a visual example of the PFMS online platform. The visible website address is pfms.nic.in.

YouTube Link for Lecture:

Channel Name:

Lateef’s Commerce Academy

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Visual content included

The only major visual in this PDF is the PFMS website screenshot on page 103. It shows the PFMS portal of the Office of Controller General of Accounts, Ministry of Finance, with options for transactions, payment tracking, registered agencies, Direct Benefit Transfer, Centrally Sponsored Schemes and Central Sector Schemes.