1100 out of 1200 central and state schemes now under DBT eliminating middleman says FM Nirmala Sitharaman

She highlighted the crucial role of the Public Financial Management System (PFMS) in improving direct benefit transfers (DBT).

Speaking at the the celebrations for the 49th Civil Accounts Day she highlighted the achievements of PFMS, she said that it has significantly helped the government in direct delivery by eliminating middlemen and ensuring that benefits reach the intended beneficiaries.

She said "Everything is going via direct payment, so there are no middlemen, no unborn children getting allowances. Everybody who receives has a biometric verified account into which the money goes. So 1100 of the 1200 central and state schemes are under DBT".

The minister also added that the PFMS currently serves 60 crore beneficiaries, making it the largest such system in the world.

The end-to-end digitalization of PFMS has made financial transactions more efficient and transparent, eliminating irregularities and delays in fund distribution.

The Finance Minister stressed that PFMS interacts with over 250 external systems, such as the Government e-Marketplace (GeM), Goods and Services Tax Network (GSTN), PM Kisan, and the Tax Information Network (TIN 2.0).

This extensive integration ensures smooth and effective financial transactions while supporting the goal of cooperative federalism. By linking various financial systems, the government can monitor fund transfers more efficiently and ensure accountability.

The PFMS has also integrated financial systems across states, engaging with 31 state treasuries and over 40 lakh program implementing agencies.

This ensures a unified financial management system across states, improving coordination between the central and state governments.

Sitharaman highlighted that India, despite being the world's largest democracy with a federal structure, has successfully managed to bring financial reporting under a standardized system.

She said ,"When we talk about PFMS integrating systems. What better example can there be of cooperative federalism if only we recognize, all 31 state treasuries and over 40 lakh programme implementing agencies enabling unified financial management across states. Look at the dimension. A country with over 140 billion populations. A country which is the largest democracy and has provincially elected governments, all their systems are integrated and managed by our friends here".

This integration standardizes financial reporting mechanisms, ensuring that taxpayers' money is accounted for transparently. The system provides a uniform method for tracking fund allocation, utilization, and beneficiary details, thereby enhancing financial discipline.

PFMS is also deeply connected with financial institutions, interfacing with over 650 banks and financial entities, including public and private sector banks, the National Payments Corporation of India (NPCI), and the Reserve Bank of India (RBI).

This "network of networks" ensures seamless financial transactions and enhances overall efficiency in fund management.

Currently, PFMS handles 1 crore transactions daily, making it one of the largest financial management platforms globally.

The implementation of Treasury Single Account (TSA) since 2017 has resulted in substantial savings of Rs 15,000 crore in interest costs alone. Additionally, since 2021-22, PFMS has helped save over Rs 11,000 crore in interest costs. These savings reflect the improved efficiency of government fund management, ensuring better utilization of resources.

The Finance Minister stressed that PFMS has transformed financial governance by improving fund tracking and enhancing fiscal coordination. With all financial data now being reported in a standardized format, there is greater transparency in government spending.

By integrating various financial systems and ensuring the direct transfer of benefits, PFMS has significantly contributed to improving public service delivery. Sitharaman emphasized that with such a vast and well-connected financial management system, India is setting a new benchmark in transparent and efficient governance. (ANI)