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Finance Management - Shanmugam IAS academy in coimbatore
Finance Management

PUBLIC FINANCE MANAGEMENT SYSTEM (PFMS)

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While addressing inaugural session at the 44th Civil Accounts Day function, finance minister said that Public Finance Management System (PFMS) has silently empowered India to be accountable, responsive and transparent.

Public Finance Management System (PFMS):

  • The PFMS Scheme has been rolled-out by the Controller General of Accounts (CGA) at the behest of Finance Ministry, Department of Expenditure as a cherished Public Finance Management (PFM) reform in the country.
  • The Scheme aims at promoting transparency and bringing about tangible improvements in the overall Central Government Financial Management as well as implementation of various Central Government Schemes across the country.
  • The ambit of PFMS coverage includes Central Sector and Centrally Sponsored Schemes as well as other expenditures including the Finance Commission Grants.
  • Considering the diversity and multiplicity of channels through which money is spent/transferred (including through Direct Benefit Transfer), the PFMS is designed to serve the pertinent need of establishing a common electronic platform for complete tracking of fund flows from the Central Government to large number of programme implementing agencies, both under Central Government and the State Governments till it reaches the final intended beneficiaries.
  • PFMS thereby enables real time monitoring of disbursements and utilization of funds which in turn provides a sound Decision Support System across Ministries and Departments of Government of India as well as all the State and UT Governments.
  • Funds under the Centrally Sponsored Schemes flow almost entirely to the State Government treasuries and a substantial part of the funds under the Central Sector Schemes are also spent in the States through various Central Government agencies.
  • The improvements brought-out in the Management of Public Funds through PFMS, it was stated, will have a cascading beneficial impact on the management of State Government Public Finances as well as efficient delivery of Public Services by the States.
  • PFMS, therefore, reflects the true spirit of Co-Operative Federalism with the Centre and the State Governments combining their efforts to improve Public Finance Management for ultimate public good.
  • The mandatory PFMS on-boarding for the remaining Schemes and Programmes including the Centrally Sponsored Schemes is also targeted to be achieved in a phased manner.

Links to note:

https://www.iasipstnpsc.in/finance-act/

https://pfms.nic.in/static/NewLayoutCommonContent.aspx?RequestPagename=Static/Implementation.aspx

https://pib.gov.in/PressReleseDetail.aspx?PRID=1604784

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