What is PFMS? Significance & Benefits of PFMS in 2020

The Central Plan Scheme Monitoring System which was known as CPSMS and now, it is now well recognized as PFMS, which is a central sector plan scheme of the planning commission. PFMS focuses on establishing a decision support system for the plans scheme of the Government of India.

What is PFMS?

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It is a government of India public financial management reforms initiative which records programs in the social sector, also examines funds payout. However, the main objective of the finance minister of the Government of India who established this scheme was to provide better monitoring, review and decision support system to elevate public accountability and transparency to implement this plan Scheme.

PFMS Development

PFMS ensures that the money which is being  invested in a large number of programs is done for its wilful cause and ultimately  facilitates budget generation utilisation under these schemes at different levels of implementation. These budgets are in terms of the accounting data of the controller general of accounts.

The need for the establishment of PFMS felt high when deficiency was noted in the existing accounting system and was also not strong enough to support budgeting, effective monitoring, consolidated financial information system and planning of these schemes.

As this scheme got its approval, it is available in all states and Central ministries; PFMS has managed to win the Microsoft developer innovation & excellence award in 2009. Moreover, it is regarded as the most effective web-based online transaction system as it has United with CBS, which owns 150 banks all over India  including Public Sector Banks and it serves as the Central MIS for all DBT transactions.

As releases from the government of India and its planning schemes are made through PFMS, it has more than 800,000 agencies (receiving releases) on its portal. The intended outcome was to develop and examine State wise and scheme wise releases for centrally sponsored schemes.

Significance of PFMS

The Central Government of India releases huge funds, programs and invests a lot of capital, so that all the Citizens of India can make the most use of it. But at the same time the government finds it mandatory to keep an eye if the capital is invested accordingly to meet the desired purpose and wants budgeting for this. So, it established PFMS for appointing this task.


As MISs did not give an accurate report about where  the funds were utilised and left the government by giving an incomplete scenario of the unutilized funds. Also by the time the reports reached the central government it was already historical. This made the government felt the lack of a system with immediate fund  transfers, bank balance across districts ,and integrated utilisation details.

This led to the establishment of PFMS meeting the mandatory goals and has become the Backbone of our Nation. Hence, PFMS plays vital role in running the country Which are:-

  • For transparency in accounting it has taken measures where banks will meet the investments of the implementing agencies and then be on the lookout from the Central Government.
  • PFMS Ventures to remove inconsistency, unorganised lags and problems related to accountability and clarity.
  • For the utilisation of funds it has its established agencies at state, district, and lower levels to catch the profitable fund utilisation.
  • It has released funds to grab  releases from all NGOs , autonomous bodies, Central civil ministers etc and also to agencies which get these releases.
  • PFMS has brought improvement in the areas of public financial management by shifting from a system of booking fund releases and going on to a system of booking actual utilisation.
  • It has rectified the areas of public financial management also by minimising float with the banks and hence obtaining improvised financial debt management.
  • It has also made sure to put all the relevant information in the public domain.
  • It has taken a great way in making a better decision support system by providing online status of fund utilisation.
  • It shows all transactions to the ultimate profitability through banking channels.

Benefits of PFMS

PFMS performs benefits at state level, district level and also to the citizens of India on a real time basis.

  • The Draft Sanction Modules are generated through this system which reduces typing work data entry works and errors present in preparation of sanctions.
  • These sanction orders received by PFMS are available at profitable states , implementing agencies , entities and individuals to trace their releases.
  • It provides a relatable statement of releases made in the time span of previous year.
  • All users have reports on pendency, sanctions issued, Sanctions settled and the pending sanctions . Moreover, these tools are used for effective monitoring.
  • All sanctions are shifted to DDO for bill payment from there it is moved to PAO  for payment which further goes to banks with cheque and advise detail.
  • It distinguishes accurately  between transfer of funds , releases and final investment which has occurred.
  • The releases , investment statement, and the percentile utilisation is generated on a daily or monthly basis through BE.
  • It has developed the same platform to provide details of scheme wise, agency wise, State wise , ministry wise sanction issued and releases made through both the special purpose vehicle route and treasury route.
  • PFMS can draw attention to all agencies including NGOs which are withdrawing grants from more than one scheme or department.

It also provides Benefit to Citizen by

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  • Giving alerts to  the registered citizens of all the funds which reach the government facility at their location along with the planned purpose.
  • Citizens can do direct payment under social sector schemes and conditional cash transfers (CCTs) which removes middlemen.
  • Citizens can also get themselves registered on the portal by giving their geographical location.
  • Users can  always do the payment by the means of DD,Cheque, RTGS, ECS, payment using online banking and payment using print advice.

The Citizen Information Portal will have the given information:

  1. State wise releases
  2. District wise releases
  3. Agency wise releases
  4. Scheme wise releases
  5. Information of all agencies registered
  6. Millennium development goals investment
  7. Sector wise investment
  8. Flagship scheme investment

Benefit to State Government

  • It provides the government full details about the plan grant received through the treasury transfers, special purpose vehicles, societies, autonomous bodies, NGOs, individuals etc. registered in the state.
  • PFMS establishes full implementation, monitoring and management  at all levels which is available to inspect the programme accomplishment on an online basis.
  • It gives details about all grants received by the state from central ministries under various schemes.
  • Various implementing agencies, district, state, block level create sanction IDs and component wise investment on the PFMS system and will track on an online real-time basis integrated with banking transactions.

Explore the Official Website to learn more.

This post was originally published on April 2, 2020 at What is PFMS? Significance & Benefits of PFMS in 2020

3 comments add your comment

  1. PFMS scheme kya hai aur iska benefit kaun aur kaise le sakta hai?
    main confused hu kyonki payment kaise hoga sirf itna btaya gya hai lekin mere samjh me ye nahi aa rha ki pfms ke through kisi ke account me maine 800-2200 tak payment aaya hai. kabhi kabhi lagatar do din payment aaya hai kaise? samajhayiye.

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