Public finance management system will help monitor use of funds: FM

Top Stories

»	Passenger vehicle sales down in Aug as consumers await GST cuts, 2-wheeler sales up: SIAM
»	Nifty, Sensex open flat as investors wait for fresh cues, US Fed meet outcome
»	India’s GDP growth to remain steady at 6.5 pc, another RBI rate cut likely this fiscal
»	Extend ITR, audit deadlines due to portal glitches, compliance overload: Tax associations
»	Centre to help automobile industry expand markets, strengthen supply chains

SME Times News Bureau | 27 Oct, 2017
Finance Minister Arun Jaitley on Friday said the mandatory use of Public Finance Management System (PFMS) for all central sector schemes will help in tracking and monitoring the flow of funds and help in knowing actual status of utilisation by the multiple implementing agencies.

"Due to the monitoring of funds through PFMS, one can know the actual status of utilisation of funds by the multiple implementing agencies of the central and the state governments. The ultimate purpose of implementing any scheme is to ensure that the benefits much reach to the last mile," he said, while addressing senior officers of the Finance and other ministries after launching the mandatory use of the PFMS.

The Finance Minister specifically mentioned about the implementation of various schemes through Direct Benefit Transfer (DBT) mechanism in this regard.

These central sector schemes with a budgetary outlay of Rs 6,66,644 crore covers over 31 per cent of the total central government expenditure during the current financial year.

Jaitley said that PFMS, with the capability of providing real time information on resource availability, flows and actual utilisation has tremendous potential to improve programme/financial management, reduce the float in the financial systems by enabling 'just in time' releases and also the government borrowings with direct impact on interest costs to the government.

The Finance Minister said that with the use of PFMS, there will not be much paperwork and it would go a long way in monitoring and tracking of any unnecessary parking of funds by the implementing agencies and thereby minimise the cases of delay and pending payments to a large extent.

He hoped that soon PFMS will progress towards a government-wide Integrated Financial Management System (GIFMIS) - as a comprehensive payment, receipt and accounting system.

Earlier in his address, Finance Secretary Ashok Lavasa said PFMS would not only help in complete tracking of funds but would also ensure in-time transfer of funds.

He said that 13 central sector schemes were now under PFMS.

"PFMS pickedup great momentum in last two years and all the states are now on board with the central government as far as acceptance of PFMS is concerned. The implementation of schemes through PFMS has brought transparency in system and helped in easy transfer and tracking of funds," Lavasa said.

He said that more than 300 central and state government schemes are now riding on PFMS and payment of more than Rs 2.91 lakh crore relating to various schemes under DBT has been made through PFMS since 2013.

PFMS has enabled the government in taking forward the ground breaking initiative of Direct Benefit Transfers (DBT) with collateral benefits of plugging leakages and eliminating ghost beneficiaries, he added.

Lavasa also mentioned that PFMS is poised to develop as one of the biggest financial management systems of the world, which is critical for bringing about a transformational accountability and transparency in the government and promoting good governance.

He said that as on date, payments to 34.19 crore beneficiaries have been made through PFMS and there are 21.72 lakh programme implementing agencies registered on PFMS. This has been achieved on the strength of PFMS having an interface with 170 banks including the Reserve Bank of India (RBI).

The Finance Secretary also added that for the first time, annual accounts of the central government for 2016-17 have been signed before October 31, 2017. He said that there is an integration of all state government treasuries except that of West Bengal, which is also under process.

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," Finance Ministry said in a statement.

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.