The Centre has made the use of Public Finance Management System (PFMS) mandatory for all central schemes. PFMS mandatorily will go a long way in ensuring that benefits of government schemes reach the last mile.
Launching the mandatory use of the tracking and monitoring system, FM Jaitley expressed hope that that PFMS would progress towards a Government-wide Integrated Financial Management System (GIFMIS) – as a comprehensive payment, receipt and accounting system.
The move would help in track and monitor the flow of funds to the implementing agencies,
The central schemes that are now mandated to use the PFMS have a budgetary outlay of Rs.6, 66,644 crores and cover over 31 percent of the central government’s total expenditure during the current financial year 2017-18.
The move will also cut the need for paperwork and would go a long way in monitoring and tracking of any unnecessary parking of funds by the implementing agencies, thus minimising cases of delay and pending payments to a large extent.
Through PFMS, the government expects not just complete tracking of funds but also ensuring timely transfer of funds.
To ensure that states take to this platform with ease, the Centre decided in favour of a phased and calibrated roll-out for smooth implementation. The ministry said that this was done keeping in mind the enormous amounts of preparation and training that will have to be undertaken.
A total of 613 schemes of the central government will be covered under PFMS. The preparatory work at the ministries which control these schemes has already been completed, the FM said.
The ambit of PFMS coverage includes central sector and centrally sponsored schemes as well as other expenditures including the Finance Commission grants.
Funds under the centrally sponsored schemes flow almost entirely to the state government treasuries and a substantial part of the funds under the central schemes are also spent in the states through various central agencies, the Finance Ministry said in a statement.
The improvements brought-out in the Management of Public Funds through PFMS will have a cascading beneficial impact on the management of state government public finances as well as efficient delivery of public services by the states, it added.