Bharat SainiLast Updated on February 25, 2017 by Bharat Saini
Government of India will roll out Public Financial Management System (PFMS) from the next Financial Year beginning April 01, 2017, with the primary objective to establish an efficient fund flow system and expenditure network. PFMS provides various stakeholders with a reliable and meaningful management information system and an effective decision support system. PFMS platform compiles, collates and makes available in real-time, information regarding all government schemes, and, significantly, provides the government real-time information on resource availability and utilization across schemes. As the projects will be paid for only when payment is needed, they will not need a budget at the beginning of the year, thereby bringing transparency on use of funds and funds will not be lying idle under various heads. This will save significant amount on interest costs as the PFMS platform will allow government expenditure to adopt a Just-in- Time approach, with payments made only when they are needed
The Public Financial Management System (PFMS) is a web-based application for payment, accounting and reconciliation of Government transactions and integrates various existing standalone systems. This is online transaction system for fund management and e-payment to implementing agencies and other beneficiaries The PFMS software application has been programmed in user friendly manner. The user of PFMS will find onscreen information to run various modules.
The new system provides for a financial management platform for all plan schemes, a database of all recipient agencies, and integration with core banking solution of banks handling plan funds, integration with State Treasuries and efficient and effective tracking of fund flow to the lowest level of implementation for Plan schemes of the Government. It will provide information across all plan schemes/implementation agencies in the country on fund utilization leading to better monitoring; review and decision support would enhance public accountability in the implementation of plan schemes.
It will result in effectiveness and economy in public financial management through better cash management for Government transparency in public expenditure and real-time information on resource availability and utilization across schemes. The roll-out will also result in improved programme administration and management, reduction of float in the system, direct payment to beneficiaries and greater transparency and accountability in the use of public funds. The proposed system will be an important tool for improving governance.
Strong and transparent Public Financial Management Systems are essential for effective and sustainable economic management and public service delivery. States are effective and accountable when they are underpinned by efficient pubic financial management and systems and good PFMS are indispensable in ensuring that public resources and aids are being used to achieve developmental goals.
