It is a web-based software application developed and implemented by the Office of Controller General of
Accounts (CGA). Its coverage includes Central Sector and Centrally Sponsored Schemes as well as other expenditures
including the Finance Commission Grants. It acts as a financial management platform for government schemes as well as a payment cum accounting
network. It is further integrated with the core banking system and has an interface with 170 Banks across the
country including the Reserve Bank of India (RBI).
Advantages
Better monitoring of funds and transparency: It establishes a common electronic platform for complete
tracking of funds from central government to various agencies by providing real time information on
resource availability, flows and actual utilization of funds. Better financial management: It has the potential to improve financial management by reducing the float in
the financial systems by enabling ‘just in time’ releases of Funds. It can further reduce Government
borrowings with direct impact on interest costs to the Government. Adoption of e-governance and good governance: It would also reduce the paper work involved, promote
the use of technology in governance and increased accountability of public funds thus promoting good
governance. Address stalling of funds and red-tapism: It would enable better monitoring and tracking of any
unnecessary parked funds by the implementing agencies, minimizing cases of delay and pending payments.Challenges Immense groundwork required: Massive preparatory work is required for achieving full PFMS
implementation including software/hardware up-gradation, training personnel at every level. Skewed nature of ICT infrastructure in richer states also acts as a challenge with regard to less
technologically developed states. Slow pace of adoption of technology in governance.
