Introduction to PFMS
The Public Financial Management System (PFMS),earlier known as Central Plan Schemes Monitoring System (CPSMS), is a web-based online software application developed and implemented by the Office of Controller General of Accounts (CGA). It was initially started during 2009 as a Central Sector Scheme of Planning Commission with the objective of tracking funds released under all Plan schemes of GoI, and real time reporting of expenditure at all levels of Programme implementation.
Subsequently in the year 2013, the scope was enlarged to cover direct payment to beneficiaries under both Plan and non-Plan Schemes. The latest enhancement in the functionalities of PFMS commenced in late 2014, wherein it has been envisaged that digitization of accounts shall be achieved through PFMS and the additional functionalities would be built into PFMS in different stages. Beginning with Pay & Accounts Offices payments, the O/o CGA did further value addition by proposing to bring in more financial activities of the Government of India in the ambit of the project.
Objective of PFMS
The primary objective of PFMS today is to facilitate sound Public Financial Management System for Government of India by establishing an efficient fund flow system as well as a payment cum accounting network. It provides various stakeholders with a real time, reliable and meaningful management information system and an effective decision support system, as part of the Digital India initiative of Government of India.
The enhanced application is envisaged to cater to all Plan and Non Plan payments of GoI, all tax and non-Tax receipts and also functions such as a comprehensive HRMIS and self-contained pension as well as GPF modules. Futuristically, all the existing standalone systems currently catering to various functions in Government of India will be subsumed in It.
How PFMS works?
PFMS is integrated with the Core Banking system in the Country, and hence, has the unique capability to first validate the account before pushing online payments to almost every beneficiary/vendor. At present, it has interface with the Core Banking System (CBS) including all Public Sector Banks, all Regional Rural Banks, major private sector banks, Reserve Bank of India, India post and Cooperative Banks. With time, the integration has to become universal, i.e. interface is to be established with all the Banks operating in India. Interface with the National Payments Corporation of India (NPCI) has also been developed that facilitates validation for Aadhaar-linked payments.
PFMS is also the channel for payment, accounting and reporting under Direct Benefit Transfer. As such, every Department/Ministry of Government of India transfers funds electronically to beneficiary (individual or institution) through PFMS. Further, State Governments and the Implementing Agencies transfer the cash components to beneficiaries through PFMS. To facilitate the above, PFMS has interface with over fifty Beneficiary management applications/systems of different Ministries and Departments, such as PM-KISAN, NSAP, MNREGASoft, MCTS, AwasSoft and Kanyashree.