Finance Minister Nirmala Sitharaman stated on Saturday that out of 1,200 central and state government schemes, 1,100 are now under DBT, ensuring that money is transferred directly to the beneficiaries' bank accounts. FM Sitharaman highlighted the crucial role of the Public Financial Management System (PFMS) in improving India's direct benefit transfers (DBT).
Speaking at the 49th Civil Accounts Day, she highlighted the achievements of PFMS. FM Sitharaman said it has significantly helped the government in direct delivery by eliminating the middlemen and ensuring that benefits reach the intended beneficiaries. She added that the PFMS currently serves 60 crore beneficiaries, making it the largest such system in the world.
1,100 out of 1,200 govt schemes under DBT: How will this help beneficiaries?
She said, "Everything is going via direct payment, so there are no middlemen, and no unborn children are getting allowances. Everybody who receives has a biometric-verified account into which the money goes. So 1,100 of the 1,200 central and state schemes are under DBT."
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).
According to FM Sitharaman, this extensive integration ensures smooth 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.
She said,"When we talk about PFMS integrating systems. What better example of cooperative federalism would be if we recognized all 31 state treasuries and over 40 lakh programme-implementing agencies enabling unified financial management across states?"
This integration standardizes financial reporting mechanisms, ensuring taxpayers' money is accounted for transparently. According to the FM, the system provides a uniform method for tracking fund allocation, utilization, and beneficiary details, 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.
PFMS handles one crore transactions daily, making it one of the largest financial management platforms globally. Implementing the Treasury Single Account (TSA) in 2017 has resulted in substantial savings of ₹15,000 crore in interest costs. Since 2021-22, PFMS has helped save over ₹11,000 crore in interest costs. These savings reflect improved efficiency of government fund management, ensuring better resource utilization.
FM Sitharaman stressed that PFMS has transformed financial governance by improving fund tracking and fiscal coordination. With all financial data now reported in a standardized format, government spending is more transparent. By integrating various financial systems and ensuring the direct transfer of benefits, PFMS has contributed to improving public service delivery.
