Public Financial Management System (PFMS)

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.