How Public financial management system is promoting the financial inclusion and good governance in the country? Explain (200 Words)
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IAS Parliament 4 years
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KEY POINTS
With an objective of bringing in transformational accountability,the Indian government envisioned Public Financial Management System (PFMS).
Promoting financial inclusion
· It has a unique capability to pre-validate the account details before pushing the transactions.
· PFMS can be credited to the transformation of Direct beneficiary transfers space in financial governance in India.
· Through efficient use of technology, PFMS is estimated to have saved Rs 1 lakh crore in direct beneficiary transfers.
· The PFMS is now visualised as a tracker of flow of funds to the last beneficiary or implementation level.
· Just in time transfers and monitoring and control of unutilised fund.
Good governance
· The core IT platform for regular activities of Controller of General Accounts, such as payments, receipts, accounting, expenditure control.
· PFMS is integrated with all major Public sector banks, Private sector banks, Cooperative banks, Regional rural bank, India Post and RBI.
· Performance of these banks integrated with PFMS is a critical requirement for achieving E-governance.
· The performance of banks is regularly monitored against a set of pre-defined key performance indicators like transaction lead time, data updation.
