Public Financial Management System
The Public Financial Management System (PFMS) is a web-based online software application developed and implemented by the Controller General of Accounts (CGA), Department of Expenditure, Ministry of Finance, Government of India. PFMS started during 2009 with the objective of tracking funds released under all Plan schemes of Government of India, and real time reporting of expenditure at all levels of Programme implementation. Subsequently, the scope was enlarged to cover direct payment to beneficiaries under all Schemes. Gradually, it has been envisaged that digitization of accounts shall be achieved through PFMS and beginning with Pay & Accounts Offices payments, the O/o CGA did further value addition by bringing in more financial activities of the Government of India in the ambit of PFMS. The outputs / deliverables for the various modes / functions of PFMS include (but are not limited to):
The primary function of PFMS today is to facilitate sound Public Financial Management System for Government of India by establishing an efficient fund flow system as well as a payment cum accounting network. 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 Government of India.
PFMS has established interface with the treasury systems of all the 28 States and the 2 Union Territories with Legislatures. This facilitates exchange of data regarding budget, allocation and expenditure against the central transfer of funds for Centrally Sponsored Schemes of the Government of India.
As the backbone of the payment system of the Government of India, PFMS is integrated with the Core Banking system in the Country, and hence, has the unique capability to first validate the account before pushing online payments to almost every beneficiary/vendor. At present, PFMS has interface with the Core Banking System (CBS) of over 300 Banks, including all Public Sector Banks, all Regional Rural Banks, major private sector banks, Reserve Bank of India, India post and Cooperative Banks. With time, the integration has to become universal, i.e. interface is to be established with all the Banks operating in India. Interface with the National Payments Corporation of India (NPCI) has also been developed that facilitates validation for Aadhaar-linked payments.
PFMS is also the channel for payment, accounting and reporting under Direct Benefit Transfer. As such, every Department/Ministry of Government of India transfers funds electronically to beneficiary (individual or institution) through PFMS. Further, State Governments and the Implementing Agencies transfer the cash components to beneficiaries through PFMS. To facilitate the above, PFMS has interface with over fifty Beneficiary management applications/systems of different Ministries and Departments, such as PM-KISAN, NSAP, MNREGASoft, MCTS, AwasSoft and Kanyashree.
PFMS was developed using an architecture which was envisaged in 2009, and as more functionalities have been added over the last few years, along with the ever increasing depth and width of its operations, PFMS faces challenges of scalability and performance.
In this background, the O/o CGA intends to transform the current PFMS system into PFMS 2.0 with dedicated focus on process and user experience improvements, adding more functionality in core functional areas and drive end to end digital experience on the platform to serve all the stakeholders scale to tomorrows needs and perform better for peak and non-peak loads. It is envisaged to address the following major technical areas:
PFMS 2.0 is envisaged to be an effective, engaging, productive and efficient platform developed through techniques such as Design Thinking & Persona based user journeys.
Public Financial Management System (PFMS) initially started as a Plan scheme named CPSMS of the Planning Commission in 2008-09 as a pilot in four States of Madhya Pradesh, Bihar, Punjab and Mizoram for four Flagship schemes e.g. MGNREGS, NRHM, SSA and PMGSY. 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. 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
The mandate given to PFMS by Cabinet decision is to provide:
• A financial management platform for all plan schemes, a database of all recipient agencies, integration with core banking solution of banks handling plan funds, integration with State Treasuries and efficient and effective tracking of fund flow to the lowest level of implementation for plan scheme of the Government.
• To provide information across all plan schemes/ implementation agencies in the country on fund utilization leading to better monitoring, review and decision support system to enhance public accountability in the implementation of plan schemes.
• To result in effectiveness and economy in Public Finance Management through better cash management for Government transparency in public expenditure and real-time information on resource availability and utilization across schemes. The roll-out will also result in improved programme administration and management, reduction of float in the system, direct payment to beneficiaries and greater transparency and accountability in the use of public funds. The proposed system will be an important tool for improving governance.
Enhanced Mandate of Ministry of Finance:
Ministry of Finance, Dept. of Expenditure OM No 49 (7) /PF- I/ 2014 dated 02.12.2014 directed CGA to proceed with Digitization of Govt. Accounts through PFMS.
Modules to implement the Mandate:
Modules developed /under development by PFMS for stakeholders as per the Union Cabinet above mandate are as under:
I. Fund Flow Monitoring
(a) Agency registration
(b) Expenditure management and fund utilisation through PFMS EAT module
(c) Accounting Module for registered agencies
(d) Treasury Interface
(e) PFMS-PRI fund flow and utilization interface
(f) Mechanism for State Governments towards fund tracking for State schemes
(g) Monitoring of Externally Aided Projects (EAP):
II. Direct Benefit Transfer DBT modules
(a) PAO to beneficiaries (b) Agency to beneficiaries (c) State treasuries to beneficiaries
III. Modules to implement the Mandate:
(a) CBS (b) India Post (c) RBI (d) NABARD & Cooperative Banks
Modules to implement Enhanced mandate:
IV. PAO Computerization
(a) Programme Division module (b) DDO module (c) PAO module (d)Pension module (e) GPF & HR module (f) Receipts including GSTN (g) Annual Financial Statements (h) Cash Flow Management (i) interface with non-civil ministries
V. Non – Tax Receipt Portal
Other Departmental Initiatives:
To leverage the capabilities of PFMS, several other departments have approached PFMS for developing utilities for their departmental needs as follows:
VI. Interface for MHA (Foreigners Division) Monitoring of Agencies receiving fund under FCRA
VII. CBDT PAN Validation
VIII. GSTN bank account validation
action Plan has been prepared and approved by Ministry of Finance for phased implementation of Public Financial Management System.
Improved Financial Management through:
Just in Time (JIT) release of funds
Monitoring of use of funds including ultimate utilization
Universal rollout of PFMS which inter alia includes
Mandatory registration of all Implementing Agencies (IA) on PFMS and
Mandatory use of Expenditure Advance & Transfer (EAT) Module of PFMS by all IAs
I. Implementation Strategy for Central Sector (CS) schemes/transactions
Activities to be completed
Mandatory registration and use of EAT module by IAs
Mapping of all relevant information of Schemes
Uploading of budget of each scheme on PFMS
Identify implementation hierarchy of each Scheme
Integration of Systems Interface of specific Schemes with PFMS e.g. NREGASoft, AwasSoft
Deployment and Training of Trainers
II. Implementation Strategy for Central Assistance to State Plan (CASP)
Activities to be undertaken by states
State Treasury Integration with PFMS
Registration of all SIAs on PFMS (1st level & below)
Mapping of State Schemes with corresponding central schemes
Configuration of State Schemes on PFMS
• Configuring State Scheme Components
• Identify and configure hierarchy of each state scheme
Integration of PFMS with Scheme specific software application
Deployment and training of Trainers
Continuous support for implementation
Visit official website https://pfms.nic.in/NewDefaultHome.aspx