In this article, you will learn what is PFMS, what are its significances and how PFMS can benefit you in 2022?
What is PFMS? Significance & Benefits of PFMS in 2022
The Central Plan Scheme Monitoring System, CPSMS, is now well recognized as PFMS, which is a central sector plan of the Government of India. PFMS focuses on establishing a decision support system for the plans scheme of the Government of India.
What is PFMS?
It is a government of India public financial management reforms initiative, which records programs in the social sector, and 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 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 utilization 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 the 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.
Why PFMS was formed?
The Central Government of India releases huge funds, and 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 to budget for this. So, it established PFMS for appointing this task.
As MISs did not give an accurate report about where the funds were utilized and left the government 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 feel the lack of a system with immediate fund transfers, bank balances across districts, and integrated utilization details.
This led to the establishment of PFMS meeting the mandatory goals.
Significance of PFMS
PFMS now has become the backbone of our Nation.
PFMS plays a vital role in running the country which is:
- 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, unorganized lags and problems related to accountability and clarity.
- For the utilization of funds, it has established agencies at the state, district, and lower levels to catch the profitable fund utilization.
- It has released funds to grab releases from all NGOs, autonomous bodies, Central civil ministers etc and also to agencies that 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 utilization.
- It has rectified the areas of public financial management also by minimizing 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 for fund utilization.
- It shows all transactions to the ultimate profitability through banking channels.
Benefits of PFMS
PFMS performs benefits at the 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 the 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 the previous year.
- All users can 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 the cheque and advises detail.
- It distinguishes accurately between the transfer of funds, releases and final investment which has occurred.
- The releases, investment statements, and percentile utilization are 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 sanctions 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.
Benefits to Citizens
It also provides Benefits to Citizens by
- 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 payments 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:
- State-wise releases
- District wise releases
- Agency wise releases
- Scheme wise releases
- Information of all agencies registered
- Millennium development goals investment
- Sector-wise investment
- Flagship scheme investment
Benefits to State Governments
- It provides the government with full details about the planning 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 program accomplishment on an online basis.
- It gives details about all grants received by the state from central ministries under various schemes.
- Various implementing agencies, districts, states, 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.