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PFMS portal

Topics Covered:

  1. Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential; citizens charters, transparency & accountability and institutional and other measures.


PFMS portal


What to study?

For Prelims: What is PFMS?, key features, who are arhatiyas?

For Mains: Significance of PFMS and the need for it.


Context: Under pressure from the Centre, the Punjab Food and Civil Supplies Department has directed all government procurement agencies to link the bank accounts of farmers with the Public Finance Management System (PFMS) portal before the procurement of paddy begins. This has angered the arhatiyas (commission agents), a large number of whom want the government to roll back its decision.


About PFMS:

It is an end-to- end solution for processing payments, tracking, monitoring, accounting, reconciliation and reporting.

Administered by the Department of Expenditure.

It is implemented by the Controller General of Accounts.



  • It provides scheme managers a unified platform for tracking releases and monitoring their last mile utilisation.
  • It provides platform for efficient management of funds through tracking of funds and real time reporting of expenditure and receipts through treasury and bank interface.
  • The line ministries/departments utilise this platform to monitor the utilisation of funds provided to the implementing agencies and state governments.
  • PFMS is also used for DBT payments under MGNREGA and other notified schemes of the Government of India.


Significance of PFMS:

  • Introduction of the PFMS resulted 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 utilisation across schemes.
  • It also resulted 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.


Sources: Indian Express.


Mains Question: What do you understand by Public finance management system & how it has the potential of increasing transparent & accountability? Also elaborate on the challenges of adopting it.