What is Public Financial Management System?
PFMS is an electronic fund tracking mechanism compiles, collates and makes available in real-time, information regarding all government schemes.
- The PFMS, also known as Central Plan Scheme Monitoring System (CPSMS), tracks fund disbursement and ensures that state treasuries are integrated with the Centre to ensure money is send as and when required.
- PFMS, administered by the department of expenditure, is an end-to-end solution for processing payments, tracking, monitoring, accounting, reconciliation and reporting. It is a web based application.
- It provides the government real-time information on resource availability and utilisation across schemes.
- In addition, the platform will allow government expenditure to adopt a Just-in- Time (JIT) approach, with payments made only when they are needed.
- The government has set a target to integrate PFMS with all state treasuries in current fiscal and implement Direct Benefit Transfer (DBT) for welfare and scholarship schemes.
In future, Government aims to transform PFMS to Government-wide Integrated Financial Management System (GIFMIS) as a comprehensive payment, receipt and accounting system.
Significance of the PFMS:
- 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.