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PFMS or Public Financial Management System is an online platform developed by the Ministry of Finance, Government of India for providing an efficient and transparent system for managing public funds. Designed to streamline the process of financial management, the PFMS is responsible for everything, i.e., from budgeting and accounting to purchases and payments. In this article, we shall know about PFMS full form, objectives, functions, steps for implementation other useful information.
History
The Public Financial Management System (PFMS) initially started as a pilot project named CPSMS under the Planning Commission in 2008-09. The pilot was conducted in four states, namely Madhya Pradesh, Bihar, Punjab, and Mizoram, targeting four flagship schemes: MGNREGS, NRHM, SSA, and PMGSY. After successfully establishing a network across ministries and departments during the initial phase, it was decided to expand the CPSMS (PFMS) nationally. The objective was to connect the financial networks of the central and state governments, as well as the agencies of state governments. This scheme was included in the 12th Plan initiative of the Planning Commission and the Ministry of Finance.
In December 2013, the Union Cabinet approved the national rollout of PFMS for all states and schemes, spanning a four-year period until 2017. The following details were outlined:
- The total outlay for the scheme, to be implemented through the Office of the Controller General of Accounts (CGA), would not exceed Rs. 1080 crore.
- A four-tiered project organization structure was established: I. Project Implementation Committee (PIC) at the apex level II. The Central Project Management Unit (CPMU) at the central level III. State Project Management Unit (SPMU) at the state level IV. District Project Management Unit (DPMU) at the district level, to be staffed through outsourcing.
PFMS Full Form
PFMS stands for Public Financial Management System. It is an online software application developed and implemented by the Controller General of Accounts (CGA), which is a part of the Department of Expenditure under the Ministry of Finance of the Government of India. The primary goal of PFMS was to monitor the allocation and utilization of funds for various government programs and initiatives in India. It enables real-time reporting of expenditure at all stages of program implementation.
Originally, the PFMS focused on tracking funds disbursed for the different Plan schemes of the Government of India. Over time, its scope expanded to include the direct payment of benefits to beneficiaries across all government schemes. The vision behind the PFMS is to digitize the accounting processes, and it has made significant progress in this regard. Starting with Pay & Accounts Offices payments, the CGA’s office has further enhanced the PFMS by incorporating additional financial activities of the Indian government into its framework.
Significance
PFMS is a web-based application that can be accessed by both the public and private sectors. It is designed to support the financial operations of the government and to provide a real-time picture of the government’s financial activities to the beneficiaries. The system is designed to provide a central repository of financial information, including budgeting, accounting, and expenditure tracking. It also provides an integrated platform for the management of government funds and financial resources.
The system is used to monitor government spending and budget allocations to the state governments and agencies of state governments. PFMS is an important tool for the government to ensure that the funds allocated to government projects are used efficiently and effectively. It provides the government with the ability to monitor and control the use of public funds and to ensure that government activities are conducted in a cost-effective manner. This system is also important for the public sector to ensure that the funds are used for the intended purpose.
Direct Benefit Transfer through PFMS
What is the process of Direct Benefit Transfer through PFMS? The implementation of Direct Benefit Transfer (DBT) was introduced by the Central Government for selected Schemes in specific districts across the country starting from January 1, 2013. This system ensures that the due amounts intended for beneficiaries are directly transferred to their Aadhaar-linked bank accounts, eliminating any intermediaries involved.
Role of PFMS:
a. PFMS acts as a unified central platform for the registration of implementing agencies and beneficiaries.
b. E-payments and verification:
· PFMS has an active interface with 90 banks at present, including 26 Public Sector Banks (PSBs), 59 Regional Rural Banks (RRBs), and 5 major Private Sector Banks.
· PFMS verifies the beneficiary’s Bank/Post Office Account details with the corresponding Bank/Post Office, guaranteeing that the money is transferred to a validated account and minimizing the risk of misdirected payments.
· The implementing agency cross-checks the beneficiary’s provided information (such as name and address) with the validated information supplied by the Bank/Post Office.
· Subsequently, the implementing agency can directly make e-payments to the beneficiaries’ validated bank accounts through the PFMS portal, where their details have already been recorded.”
Conclusion
In conclusion, PFMS is an important tool for the government to improve the efficiency and effectiveness of the public finance management. It provides the government with the ability to monitor and control the use of public funds and to ensure that the funds are used for their intended purpose. It also helps to ensure that government activities are conducted in a cost-effective manner.
Other Full Forms
Public Financial Management System Frequently Answered Questions (FAQs)
What is PFMS?
PFMS stands for Public Financial Management System. It is a centralized platform used by the Indian government for managing and monitoring financial transactions related to various government schemes and programs.
What is PFMS full form?
PFMS stands for Public Financial Management System. It is a comprehensive system used by the Indian government to manage and monitor financial transactions related to various government schemes and programs.
What is PFMS code in bank?
PFMS code in a bank refers to the specific identification code assigned to the bank for integration with the Public Financial Management System.
Who are eligible for PFMS?
Individuals who are beneficiaries of various government schemes, programs, or initiatives are eligible for PFMS. These beneficiaries may include recipients of scholarships, subsidies, pensions, and other forms of financial assistance provided by the government.
What is PFMS Know your payment?
PFMS Know Your Payment is a feature within the Public Financial Management System that allows beneficiaries to track and obtain information about their payments made under various government schemes and programs.
What are the objectives of PFMS?
The objectives of PFMS include effective management, monitoring, and transparency of government funds and payments, as well as promoting financial inclusion and reducing leakages in the system.
What was PFMS renamed as?
The Public Financial Management System (PFMS), was earlier known as Central Plan Schemes Monitoring System (CPSMS).
Which scheme is PFMS?
PFMS (Public Financial Management System) is not a specific scheme, but rather a centralized platform used by the Indian government to manage and monitor financial transactions related to various government schemes and programs.
Which state implemented PFMS first in India?
The state of Madhya Pradesh implemented PFMS (Public Financial Management System) first in India.
When was PFMS launched?
PFMS (Public Financial Management System) was launched on 1st January 2009.
What is Direct Benefit Transfer?
Direct Benefit Transfer (DBT) is a government initiative in India that aims to directly transfer financial benefits, subsidies, and welfare payments to the bank accounts of eligible beneficiaries, ensuring transparency and reducing leakages in the system.
What is the benefit of PFMS account?
The benefit of having a PFMS (Public Financial Management System) account is that it enables efficient management, tracking, and direct transfer of government funds and payments to beneficiaries, ensuring transparency and minimizing errors.
Which schemes are routed through PFMS?
Multiple government schemes and programs in India are routed through PFMS (Public Financial Management System), including scholarships, subsidies, pensions, and other financial assistance schemes.
What is PFMS in scholarship?
In the context of scholarships, PFMS (Public Financial Management System) is a platform used by the government to efficiently manage the disbursement and tracking of scholarship payments to eligible beneficiaries.
