Public Financial Management System (PFMS)

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What is PFMS?
  • PFMS is an electronic fund tracking mechanism
  • It compiles, collates and makes available in real-time, information regarding all government schemes.
  • Besides, it will significantly provide government real-time information on resource availability and utilisation across schemes.
  • In addition it allow government expenditure to adopt a Just-in- Time (JIT) approach, with payments made only when they are needed.
How will it benefit government?
  • It aims at promoting transparency and bringing about tangible improvements in overall Central Government Financial Management as well as implementation of various Central Government Schemes across the country.
  • The PFMS aims to help in complete tracking and monitoring flow of funds to implementing agencies and ensuring timely transfer of funds.
  • It will help government to ascertain actual status of utilization of funds by multiple implementing agencies of central and the state governments.
  • It will also cut need for paper work and in long way help in monitoring and tracking of any unnecessary parking of funds by implementing agencies, thus minimising cases of delay and pending payments to large extent.
  • It will help to plug leakages in system and help to manage and maintain data that government can use to develop more scientific approach.
  • The Public Financial Management System (PFMS) after implemented on full scale will help Union Government to save a significant amount on interest costs.
  • It will allow the government to monitor and access more than Rs.1 lakh crore of idle funds lying with it under various heads.
  • Once government access these funds through PFMS, it does not need to borrow that amount.
  • It will be integrated with IT network of the GST.
Why in news?
Government has made use of PFMS mandatory for Central Schemes.
NOTE: Mention PFMS while analysing various schemes.