DMPQ: What is Public financial management system? Discuss its advantages. ( economy)

:  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.

Advantages of PMFS:

 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.

 

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