Background
Public Financial Management System (PFMS) initially started as a Plan scheme named CPSMS of the Planning Commission in 2008-09 as a pilot in four States of Madhya Pradesh, Bihar, Punjab and Mizoram for four Flagship schemes e.g. MGNREGS, NRHM, SSA and PMGSY. After the initial phase of establishing a network across Ministries / Departments, it has been decided to undertake National rollout of CPSMS (PFMS) to link the financial networks of Central, State Governments and the agencies of State Governments. The scheme was included in 12th Plan initiative of Planning Commission and Ministry of Finance.
In December, 2013 the Union Cabinet approved the national roll out of PFMS for all States and schemes for a period of four years till 2017 as follows:
(i) Total outlay of the scheme to be implemented through the O/o CGA would be not more than Rs. 1080 crore.
(ii) Four tiered project organization structure viz.
I. Project Implementation Committee (PIC) at apex level
II. The Central Project Management Unit (CPMU) at Centre
III. State Project Management Unit (SPMU) at State level
IV. District Project Management Unit (DPMU) at district level to be manned through outsourcing
In December, 2013 the Union Cabinet approved the national roll out of PFMS for all States and schemes for a period of four years till 2017 as follows:
(i) Total outlay of the scheme to be implemented through the O/o CGA would be not more than Rs. 1080 crore.
(ii) Four tiered project organization structure viz.
I. Project Implementation Committee (PIC) at apex level
II. The Central Project Management Unit (CPMU) at Centre
III. State Project Management Unit (SPMU) at State level
IV. District Project Management Unit (DPMU) at district level to be manned through outsourcing
Mandate
The mandate given to PFMS by Cabinet decision is to provide:
• A financial management platform for all plan schemes, a database of all recipient agencies, integration with core banking solution of banks handling plan funds, integration with State Treasuries and efficient and effective tracking of fund flow to the lowest level of implementation for plan scheme of the Government.
• To provide information across all plan schemes/ implementation agencies in the country on fund utilization leading to better monitoring, review and decision support system to enhance public accountability in the implementation of plan schemes.
• To result in effectiveness and economy in Public Finance Management through better cash management for Government transparency in public expenditure and real-time information on resource availability and utilization across schemes. The roll-out will also result in improved programme administration and management, reduction of float in the system, direct payment to beneficiaries and greater transparency and accountability in the use of public funds. The proposed system will be an important tool for improving governance.
• A financial management platform for all plan schemes, a database of all recipient agencies, integration with core banking solution of banks handling plan funds, integration with State Treasuries and efficient and effective tracking of fund flow to the lowest level of implementation for plan scheme of the Government.
• To provide information across all plan schemes/ implementation agencies in the country on fund utilization leading to better monitoring, review and decision support system to enhance public accountability in the implementation of plan schemes.
• To result in effectiveness and economy in Public Finance Management through better cash management for Government transparency in public expenditure and real-time information on resource availability and utilization across schemes. The roll-out will also result in improved programme administration and management, reduction of float in the system, direct payment to beneficiaries and greater transparency and accountability in the use of public funds. The proposed system will be an important tool for improving governance.
Enhanced Mandate of Ministry of Finance
Ministry of Finance, Dept. of Expenditure OM No 49 (7) /PF- I/ 2014 dated 02.12.2014 directed CGA to proceed with Digitization of Govt. Accounts through PFMS.
Modules to implement the Mandate
Modules developed /under development by PFMS for stakeholders as per the Union Cabinet above mandate are as under:
I. Fund Flow Monitoring
(a) Agency registration
(b) Expenditure management and fund utilisation through PFMS EAT module
(c) Accounting Module for registered agencies
(d) Treasury Interface
(e) PFMS-PRI fund flow and utilization interface
(f) Mechanism for State Governments towards fund tracking for State schemes
(g) Monitoring of Externally Aided Projects (EAP):
II. Direct Benefit Transfer DBT modules
(a) PAO to beneficiaries (b) Agency to beneficiaries (c) State treasuries to beneficiaries
III. Interfaces for Banking
(a) CBS (b) India Post (c) RBI (d) NABARD & Cooperative Banks
I. Fund Flow Monitoring
(a) Agency registration
(b) Expenditure management and fund utilisation through PFMS EAT module
(c) Accounting Module for registered agencies
(d) Treasury Interface
(e) PFMS-PRI fund flow and utilization interface
(f) Mechanism for State Governments towards fund tracking for State schemes
(g) Monitoring of Externally Aided Projects (EAP):
II. Direct Benefit Transfer DBT modules
(a) PAO to beneficiaries (b) Agency to beneficiaries (c) State treasuries to beneficiaries
III. Interfaces for Banking
(a) CBS (b) India Post (c) RBI (d) NABARD & Cooperative Banks
Modules to implement Enhanced mandate:
IV. PAO Computerization-Online payments, receipts and accounting of Govt. of India
(a) Programme Division module (b) DDO module (c) PAO module (d)Pension module (e) GPF & HR module (f) Receipts including GSTN (g) Annual Financial Statements (h) Cash Flow Management (i) interface with non-civil ministries
V. Non – Tax Receipt Portal
(a) Programme Division module (b) DDO module (c) PAO module (d)Pension module (e) GPF & HR module (f) Receipts including GSTN (g) Annual Financial Statements (h) Cash Flow Management (i) interface with non-civil ministries
V. Non – Tax Receipt Portal
Other Departmental Initiatives:
To leverage the capabilities of PFMS, several other departments have approached PFMS for developing utilities for their departmental needs as follows:
VI. Interface for MHA (Foreigners Division) Monitoring of Agencies receiving fund under FCRA
VII. CBDT PAN Validation
VIII. GSTN bank account validation
VI. Interface for MHA (Foreigners Division) Monitoring of Agencies receiving fund under FCRA
VII. CBDT PAN Validation
VIII. GSTN bank account validation
Implementation Strategy
An action Plan has been prepared and approved by Ministry of Finance for phased implementation of Public Financial Management System.
Improved Financial Management through:
• Just in Time (JIT) release of funds
• Monitoring of use of funds including ultimate utilization
Strategy:
• Universal rollout of PFMS which inter alia includes
• Mandatory registration of all Implementing Agencies (IA) on PFMS and
• Mandatory use of Expenditure Advance & Transfer (EAT) Module of PFMS by all IAs
I. Implementation Strategy for Central Sector (CS) schemes/transactions
Activities to be completed
Mandatory registration and use of EAT module by IAs
Mapping of all relevant information of Schemes
Uploading of budget of each scheme on PFMS
Identify implementation hierarchy of each Scheme
Integration of Systems Interface of specific Schemes with PFMS e.g. NREGASoft, AwasSoft
Deployment and Training of Trainers
II. Implementation Strategy for Central Assistance to State Plan (CASP)
Activities to be undertaken by states
State Treasury Integration with PFMS
Registration of all SIAs on PFMS (1st level & below)
Mapping of State Schemes with corresponding central schemes
Configuration of State Schemes on PFMS
• Configuring State Scheme Components
• Identify and configure hierarchy of each state scheme
Integration of PFMS with Scheme specific software application
Deployment and training of Trainers
Continuous support for implementation
Improved Financial Management through:
• Just in Time (JIT) release of funds
• Monitoring of use of funds including ultimate utilization
Strategy:
• Universal rollout of PFMS which inter alia includes
• Mandatory registration of all Implementing Agencies (IA) on PFMS and
• Mandatory use of Expenditure Advance & Transfer (EAT) Module of PFMS by all IAs
I. Implementation Strategy for Central Sector (CS) schemes/transactions
Activities to be completed
Mandatory registration and use of EAT module by IAs
Mapping of all relevant information of Schemes
Uploading of budget of each scheme on PFMS
Identify implementation hierarchy of each Scheme
Integration of Systems Interface of specific Schemes with PFMS e.g. NREGASoft, AwasSoft
Deployment and Training of Trainers
II. Implementation Strategy for Central Assistance to State Plan (CASP)
Activities to be undertaken by states
State Treasury Integration with PFMS
Registration of all SIAs on PFMS (1st level & below)
Mapping of State Schemes with corresponding central schemes
Configuration of State Schemes on PFMS
• Configuring State Scheme Components
• Identify and configure hierarchy of each state scheme
Integration of PFMS with Scheme specific software application
Deployment and training of Trainers
Continuous support for implementation
| Stages | States/UT with legislature | Target Date |
|---|---|---|
| Stage 1 | Assam, Bihar, Jharkhand, Kerala, Madhya Pradesh, Maharashtra, Odisha, Puducherry, Rajasthan, and Uttar Pradesh | 31-08-2016 |
| Stage 2 | Andhra Pradesh,Arunachal Pradesh,Chattisgarh,Goa,Gujarat,Himachal,Haryana,Manipur,Meghalya,Punjab,Sikkhim,Tamil Nadu,Telangana,Uttarakhand,West Bengal | 31-12-2016 |
| Stage 3 | Delhi,Jammu & Kashmir,Karnataka,Mizoram,Nagaland,Tripura | 31-03-2017 |
Achievements:
Basic Statistics
| Total number of schemes: | CS – 679; CASP – 104 |
| Total Implementing Agencies: | 17.88 lakhs |
| Interface with Banks: | PSBs (26), RRBs (50), PrSBs(10),Coop (2) RBI, India Post |
| FY 2015-16 3.02 lakh sanctions: | Rs4.09 lakh crore |
| Rs. 3,196 crore non-tax receipts on NTRP | |
| Payments processed per day 2015-16: | >7 lakh |
| 2016-17: | >15 lakh |
| Average log-in on website – | 20,000 per day |
| Payments are made though following routes: | |
| ABPS & NACH of NPCI for DBT payments | |
| NEFT for PAO payments | |
| RBI route for IGAA/IAAA |
Agency Registration:
Implementing Agencies (e.g. Statutory bodies, Trusts, Registered Societies, Autonomous Bodies, State Govt. Institutions, Local Bodies etc.) are registered on PFMS for monitoring of bank balances and tracking of fund flow. The bank balances of these agencies can be monitored through PFMS after their registration on PFMS. Presently,17.9 lakh agencies are registered with their bank accounts duly validated by PFMS- Core Banking Solution (CBS) Interface and used by stakeholders for monitoring purpose. Details of progress since its inception is as under:
| FY | No of Agencies registered |
|---|---|
| 2009-10 | 17,680 |
| 2010-11 | 51,512 |
| 2011-12 | 3,78,750 |
| 2012-13 | 6,06,905 |
| 2013-14 | 3,69,529 |
| 2014-15 | 2,54,236 |
| 2015-16 | 1,09,324 |
| Total | 17,87,936 |
MIS and DSS output reports are available on PFMS. State wise releases, Ministry wise Scheme wise releases, Implementation level wise bank balances for each scheme is available to the stakeholders on PFMS.
Expenditure management and fund utilisation through PFMS (EAT) module:
After completion of registration process, the Agencies can login to PFMS portal and can create Maker and Checker type users to use Expenditure-Advance-Transfer modules (EAT module) for transferring funds or advances to lower level Agencies and e-payments to vendors, employees and beneficiaries for financial MIS. This is an extremely important functional module of PFMS for monitoring the ultimate utilisation of funds.
So far 26,011 agencies out of 17.9 lakh registered agencies are using the EAT Module. Exhaustive training at state, district and below level is required to be imparted for encouraging registered agencies for usage of PFMS for providing last mile connectivity. Year wise usage of EAT module of PFMS is as under:
So far 26,011 agencies out of 17.9 lakh registered agencies are using the EAT Module. Exhaustive training at state, district and below level is required to be imparted for encouraging registered agencies for usage of PFMS for providing last mile connectivity. Year wise usage of EAT module of PFMS is as under:
| FY | No of Agencies using EAT module |
|---|---|
| 2009-10 | - |
| 2010-11 | - |
| 2011-12 | - |
| 2012-13 | 1,553 |
| 2013-14 | 1,474 |
| 2014-15 | 8,782 |
| 2015-16 | 26,011 |
Treasury Interface
Ministry of Finance, under the Central Scheme for Treasury Modernisation has mandated compulsory interface of State Treasury Systems with PFMS.Consequently, an interface for sharing data with State Treasuries has been developed in PFMS. This aims at tracking of utilization of funds for all Central Schemes in all States which are either transferred through the State Consolidated Fund or Implementing Agency route. Funds transferred from Central Ministries are tracked at each successive stage, starting with the initial release with the help of PFMS – Core Banking Solution (CBS) interface. Presently PFMS has established Treasury interface with 10 States/UT with legislature namely Assam, Bihar, Jharkhand, Kerala, Madhya Pradesh, Maharashtra, Odisha, Puducherry, Rajasthan, and Uttar Pradesh.
Bank Interface
PFMS-Core Banking Solution Interface facilitates online validation of beneficiaries, and Agencies bank account details. Electronic payment files are generated through PFMS for three modes of payments, viz. Print payment Advice (PPA), Digital Signature Certificate (DSC) and Corporate Internet Banking (CINB). At present, PFMS –CBS interface is operational with Public Sector Banks (26), Regional Rural Banks (50), and private sector banks (10). PFMS has interface with India Post and RBI too.
Direct Benefit Transfer (DBT)
The DBT Scheme was announced by the Government of India for implementation w.e.f 01.01.2013. It has been decided that payments (Aadhaar enabled or via NEFT) to ultimate beneficiaries will be processed through PFMS (CPSMS). The erstwhile Planning Commission issued detailed guidelines on 12.4.2013 (OM No 4) regarding use of CPSMS by Ministries /Department/Implementing Agencies for DBT.
Further, the use of PFMS has been made mandatory for payment, accounting and reporting under Direct Benefit Transfer, with effect from 1st April 2015. No payments under the Direct Benefit Transfer schemes (except PAHAL) are to be processed, unless the electronic payment files for such payments are received through the PFMS system developed by the CGA from 1st April, 2015.
As a result, every Department/Ministry will transfer funds electronically to each beneficiary (individual or institution) through PFMS. Further, implementing agencies will transfer the cash components to beneficiaries through PFMS. In case where funds are transferred to State Government/Treasury, each Ministry will coordinate and ensure that the cash component of each scheme is transferred through PFMS. In both the above cases, all Departments/ministries will use the PFMS system of CGA for processing payments which is already linked with NEFT and APB of NPCI for settlement of funds, and can process both type of payments on a single platform.
MGNREGS at Pan India level and Cash-in-lieu-of-food grains PDS subsidy in three UTs i.e. Chandigarh, Puducherry and Dadra and Nagar Haveli are the major Central Schemes taken up for DBT payment implementation in 2015-16.
The status of implementation of Direct Benefit Transfer using PFMS portal both in respect of Central and State level schemes is as under:
Ministry of Finance, under the Central Scheme for Treasury Modernisation has mandated compulsory interface of State Treasury Systems with PFMS.Consequently, an interface for sharing data with State Treasuries has been developed in PFMS. This aims at tracking of utilization of funds for all Central Schemes in all States which are either transferred through the State Consolidated Fund or Implementing Agency route. Funds transferred from Central Ministries are tracked at each successive stage, starting with the initial release with the help of PFMS – Core Banking Solution (CBS) interface. Presently PFMS has established Treasury interface with 10 States/UT with legislature namely Assam, Bihar, Jharkhand, Kerala, Madhya Pradesh, Maharashtra, Odisha, Puducherry, Rajasthan, and Uttar Pradesh.
Bank Interface
PFMS-Core Banking Solution Interface facilitates online validation of beneficiaries, and Agencies bank account details. Electronic payment files are generated through PFMS for three modes of payments, viz. Print payment Advice (PPA), Digital Signature Certificate (DSC) and Corporate Internet Banking (CINB). At present, PFMS –CBS interface is operational with Public Sector Banks (26), Regional Rural Banks (50), and private sector banks (10). PFMS has interface with India Post and RBI too.
Direct Benefit Transfer (DBT)
The DBT Scheme was announced by the Government of India for implementation w.e.f 01.01.2013. It has been decided that payments (Aadhaar enabled or via NEFT) to ultimate beneficiaries will be processed through PFMS (CPSMS). The erstwhile Planning Commission issued detailed guidelines on 12.4.2013 (OM No 4) regarding use of CPSMS by Ministries /Department/Implementing Agencies for DBT.
Further, the use of PFMS has been made mandatory for payment, accounting and reporting under Direct Benefit Transfer, with effect from 1st April 2015. No payments under the Direct Benefit Transfer schemes (except PAHAL) are to be processed, unless the electronic payment files for such payments are received through the PFMS system developed by the CGA from 1st April, 2015.
As a result, every Department/Ministry will transfer funds electronically to each beneficiary (individual or institution) through PFMS. Further, implementing agencies will transfer the cash components to beneficiaries through PFMS. In case where funds are transferred to State Government/Treasury, each Ministry will coordinate and ensure that the cash component of each scheme is transferred through PFMS. In both the above cases, all Departments/ministries will use the PFMS system of CGA for processing payments which is already linked with NEFT and APB of NPCI for settlement of funds, and can process both type of payments on a single platform.
MGNREGS at Pan India level and Cash-in-lieu-of-food grains PDS subsidy in three UTs i.e. Chandigarh, Puducherry and Dadra and Nagar Haveli are the major Central Schemes taken up for DBT payment implementation in 2015-16.
The status of implementation of Direct Benefit Transfer using PFMS portal both in respect of Central and State level schemes is as under:
| FY | No of Schemes | No of DBT credits through PFMS | Amount(in Crore) |
|---|---|---|---|
| 2012-13 | 11 | 16,547 | 1.70 |
| 2013-14 | 19 | 28,02,967 | 444.57 |
| 2014-15 | 24 | 54,10,176 | 2,251.54 |
| 2015-16 | 42 | 27,44,17,000 | 42,811.66 |
DBT for State Govt. Schemes
• Uttar Pradesh State Government Scholarships, Pensions and Social Welfare schemes are being paid through PFMS. Chief Secretary, UP has sent a DO letter to CGA regarding saving of ₹520 crore for Government of UP by using account validation and secure payment features of PFMS DBT process.
• Payments for Odisha Govt. Scheme “BijuPaccaGhar” is being done through PFMS.
• Pilot for DBT payments of Kanyashree scheme of West Bengal Govt. has been done in Nadia district.
• Uttar Pradesh State Government Scholarships, Pensions and Social Welfare schemes are being paid through PFMS. Chief Secretary, UP has sent a DO letter to CGA regarding saving of ₹520 crore for Government of UP by using account validation and secure payment features of PFMS DBT process.
• Payments for Odisha Govt. Scheme “BijuPaccaGhar” is being done through PFMS.
• Pilot for DBT payments of Kanyashree scheme of West Bengal Govt. has been done in Nadia district.
| FY | No of Schemes | No of DBT credits through PFMS | Amount(in Crore) |
|---|---|---|---|
| 2012-13 | 0 | - | - |
| 2013-14 | 0 | - | - |
| 2014-15 | 32 | 1,65,35,840 | 4,716.14 |
| 2015-16 | 50 | 4,62,93,127 | 10,407.52 |
Interfaces for DBT
• Beneficiary management applications of different ministries and departments contain beneficiary list and their details filled by field units. PFMS’ interface with these applications has further enriched the information available to stake holders by prior account validation and credit response information. This helps in detecting fraudulent payments. So far PFMS – Domain Application Interface is operational with external applications like NSAP, MNREGASoft, MCTS, AwasSoft, NeSP, UGC-Canbank application, CAB PDS system and Kanyashree.
Non Tax Receipt Portal (NTRP)
The objective of the Non Tax Receipts Portal (NTRP) is to provide a one stop window to citizens / corporates/ other users for making online deposits of Non-Tax receipts due to Government of India (GoI).
NTRP uses the modality of Payment Gateway Aggregator (PGA). A depositor can therefore make online deposit using Credit Card, Debit Card or through Net Banking of any of the banks integrated with the PGA. At present, SBIePay is the PGA for NTRP.
NTRP is integrated with the accredited banks of different Ministries. Therefore any deposit made through it would also be captured in the accounts of the respective Pay and Accounts office (PAO).
This portal shall serve all those GoI departments/ministries who do not have any existing solution for online collection of their receipts.
• The NTRP Portal has been formally launched by Hon. Finance Minister on 15 Feb’ 2016. So far the NTRP portal is being used by 5 Ministries. In FY 2015-16Rs. 3,176 crore non-tax revenue was collected through NTRP involving 1690 transactions.
PAO computerization-Online Payments, Receipts and Accounting of Govt. of India
In pursuance of the above mandate, a pilot of the online payment functions through PFMS portal was run in 2 Ministries (Heavy Industries, and Power) from 1st April, 2015.
Thereafter the application was expanded to include the following functionalities:
(i) Compilation of accounts.
(ii) Budget module.
(iii) Reconciliation of Accounts
(iv) Authorization of funds to agent Ministries/Departments for the supply of goods and services, execution of works etc. by the latter. Under the phased roll out plan, the expanded PFMS with the above functionalities has so far been implemented in all Civil Ministries/Departments.
• Beneficiary management applications of different ministries and departments contain beneficiary list and their details filled by field units. PFMS’ interface with these applications has further enriched the information available to stake holders by prior account validation and credit response information. This helps in detecting fraudulent payments. So far PFMS – Domain Application Interface is operational with external applications like NSAP, MNREGASoft, MCTS, AwasSoft, NeSP, UGC-Canbank application, CAB PDS system and Kanyashree.
Non Tax Receipt Portal (NTRP)
The objective of the Non Tax Receipts Portal (NTRP) is to provide a one stop window to citizens / corporates/ other users for making online deposits of Non-Tax receipts due to Government of India (GoI).
NTRP uses the modality of Payment Gateway Aggregator (PGA). A depositor can therefore make online deposit using Credit Card, Debit Card or through Net Banking of any of the banks integrated with the PGA. At present, SBIePay is the PGA for NTRP.
NTRP is integrated with the accredited banks of different Ministries. Therefore any deposit made through it would also be captured in the accounts of the respective Pay and Accounts office (PAO).
This portal shall serve all those GoI departments/ministries who do not have any existing solution for online collection of their receipts.
• The NTRP Portal has been formally launched by Hon. Finance Minister on 15 Feb’ 2016. So far the NTRP portal is being used by 5 Ministries. In FY 2015-16Rs. 3,176 crore non-tax revenue was collected through NTRP involving 1690 transactions.
PAO computerization-Online Payments, Receipts and Accounting of Govt. of India
In pursuance of the above mandate, a pilot of the online payment functions through PFMS portal was run in 2 Ministries (Heavy Industries, and Power) from 1st April, 2015.
Thereafter the application was expanded to include the following functionalities:
(i) Compilation of accounts.
(ii) Budget module.
(iii) Reconciliation of Accounts
(iv) Authorization of funds to agent Ministries/Departments for the supply of goods and services, execution of works etc. by the latter. Under the phased roll out plan, the expanded PFMS with the above functionalities has so far been implemented in all Civil Ministries/Departments.
PFMS in Policy Documents:
- Fiscal Policy Strategy Statement 2012, Ministry of Finance
- Approach to the Twelfth Five Year Plan, Planning Commission
- High Level Expert Committee on Efficient Management of Public Expenditure
Source : https://pfms.nic.in/Users/LoginDetails/Login.aspx
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