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AboutPFMS

Introduction to Public Financial Management System

The Public Financial Management System (PFMS) is a web-based online software application developed and implemented by
the Controller General of Accounts (CGA), Department of Expenditure, Ministry of Finance, Government of India. PFMS
started during 2009 with the objective of tracking funds released under all Plan schemes of Government of India, and real
time reporting of expenditure at all levels of Programme implementation. Subsequently, the scope was enlarged to cover
direct payment to beneficiaries under all Schemes. Gradually, it has been envisaged that digitization of accounts shall be
achieved through PFMS and beginning with Pay & Accounts Offices payments, the O/o CGA did further value addition by
bringing in more financial activities of the Government of India in the ambit of PFMS. The outputs / deliverables for the
various modes / functions of PFMS include (but are not limited to):

Payment & Exchequer Control

Accounting of Receipts (Tax & Non-Tax)
Compilation of Accounts and Preparation of Fiscal Reports
Integration with Financial Management Systems of States

The primary function 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. PFMS 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.

PFMS has established interface with the treasury systems of all the 28 States and the 2 Union Territories with Legislatures.
This facilitates exchange of data regarding budget, allocation and expenditure against the central transfer of funds for
Centrally Sponsored Schemes of the Government of India.

As the backbone of the payment system of the Government of India, 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, PFMS has interface with the Core Banking System (CBS) of over 300 Banks, 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.

PFMS was developed using an architecture which was envisaged in 2009, and as more functionalities have been added over
the last few years, along with the ever increasing depth and width of its operations, PFMS faces challenges of scalability and
performance.

In this background, the O/o CGA intends to transform the current PFMS system into PFMS 2.0 with dedicated focus on
process and user experience improvements, adding more functionality in core functional areas and drive end to end digital
experience on the platform to serve all the stakeholders scale to tomorrows needs and perform better for peak and non-
peak loads. It is envisaged to address the following major technical areas:

Hyper-stability and scalability and Hybrid Cloud

Sharding based database architecture
A comprehensive datawarehouse and Data cleansing
AI, ML, Deep learning and Predictability framework
Fraud Analytics
High Latency, low bandwidth area operations with offline filing tools and App virtualisation
Mobility platform, bots and blockchain
Single Sign On (SSO) between applications
An open API framework for integration
Comprehensive PKI infrastructure & digital signing solution. Hardware Security Module (HSM) integration for
management of cryptographic keys and data privacy and protection
Comprehensive content management framework to enable paperless office (to store PDF, XML, JPG type content) with
ability to digitize content store in “digitized content”
Comprehensive DR and BCP strategy and drills parts of process
Comprehensive data classification and privacy framework
Comprehensive cyber security framework
Comprehensive testing framework (unit, black box, white box, load and performance)

PFMS 2.0 is envisaged to be an effective, engaging, productive and efficient platform developed through techniques such as
Design Thinking & Persona based user journeys.

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:

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(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.

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. Modules to implement the Mandate:
(a) CBS (b) India Post (c) RBI (d) NABARD & Cooperative Banks

Modules to implement Enhanced mandate:

IV. PAO Computerization
(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

Implementation Strategy
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

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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

Timeline For Treasury Interface

Stages States/UT with legislature Target

Date
Assam, Bihar, Jharkhand, Kerala, Madhya Pradesh, Maharashtra, Odisha, Puducherry, 31-08-
Stage 1
Rajasthan, and Uttar Pradesh 2016
Andhra Pradesh,Arunachal
31-12-
Stage 2 Pradesh,Chattisgarh,Goa,Gujarat,Himachal,Haryana,Manipur,Meghalya,Punjab,Sikkhim,Tamil
2016
Nadu,Telangana,Uttarakhand,West Bengal
31-03-
Stage 3 Delhi,Jammu & Kashmir,Karnataka,Mizoram,Nagaland,Tripura
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:
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
6,06,905 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.

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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:

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.

BankInterface
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:

Status of DBT in Central Schemes

FY No of No of DBT credits Amount(in
Schemes through PFMS Crore)
2012-
11 16,547 1.70
13

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2013-
19 28,02,967 444.57
14
2014-
24 54,10,176 2,251.54
15
2015-
50 4,62,93,127 10,407.52
16

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.

Status of DBT in State Schemes

FY No of No of DBT credits Amount(in
Schemes through PFMS Crore)
2012-
0 - -
13
2013-
0 - -
14
2014-
32 1,65,35,840 4,716.14
15
2015-
50 4,62.93,127 10,407.52
16

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 2015-16 Rs. 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.

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