PFMS Full Form: Know All About PFMS Here!
By BYJU'S Exam Prep
Updated on: September 25th, 2023
PFMS Full Form: Formerly known as Central Plan Schemes Monitoring System, the Public Financial Management System (PFMS) is a software application. The Office of Controller General of Accounts developed and implemented it. This software allows the e-payment of subsidies directly to the people through their bank account. The software tracks funds released under all of the Government of India’s plan schemes. PFMS ensures that the money spent by the government is for the intended purpose. The system compiles and makes information available in real-time. Using this system will allow the government to take an approach that is Just-in-Time for its expenditures. Currently, PFMS is made mandatory for Central Schemes.
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History of PFMS
Introduced in 2009 in India, PFMS was responsible for tracking funds that were released under the Plan schemes of the Indian government. It also played a role in reporting the expenditures in real-time at all levels of implementation. PFMS was introduced for the first time as a pilot in Madhya Pradesh, Bihar, Punjab, and Mizoram. It was used for linking the central, state, and agencies of the state government’s financial network.
However, in 2013, its rollout for all states was approved by the Union Cabinet for about four years. PFMS was so efficient that by 2014, this was mandated for all of the government’s major welfare-programmed DBT payments. According to a recent report, in 2018, about Rs. 71,633.45 crores were transacted digitally through this portal. This amount rounded up to about 98,19,026 transactions making a historical record of all digital transactions in a day.
Objectives of PFMS
- To help in making the financial management of India sound and help in an efficient flow system.
- Using a banking channel to make payments to ultimate beneficiaries.
- To enhance transparency in India’s public expenditures.
- Allows real-time information management for stakeholders, thereby affecting India’s decision support system.
- PFMS also plays a role in facilitating better accounting and also financial monitoring.
Benefits of PFMS
PFMS’s historical track record speaks for its efficiency. Introducing PFMS in India has had several track records:
- The introduction of PFMS software by the Government and RBI has made the government more accountable and responsive.
- The implementation of PFMS now helps in visualizing important decisions. They include tracking funds’ flow to the last beneficiary, etc.
- The PFMS system has reduced long data entries manually, which consumes time and will make the data prone to human error.
- Tools such as reports help one visualize sanctions issued, settled, and pending aid in effective monitoring.
- Through this system, one can understand whether the sanctions issued are scheme-wise, agency-wise, state, or ministry-wise.
- It is possible to recognize NGOs and other agencies through PFMS and understand whether they are withdrawing grants from more than one scheme.
- Through PFMS, one can differentiate whether the funds have been transferred, released, or had final investments made.
PFMS is an excellent system that helps in improving India’s Financial Management transparency. It is important to know the full form of PFMS along with its other details. You can use this article to know more about the PFMS system.
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