State Financial Management Systems Are Bringing Checks| Qrius

Bornali Bhandari and Pawan Kadyan

The crucial aims of PFM are—“to maintain a sustainable fiscal position, properly allocate sources, and efficiently provide general public products and services” (Cangiano, Curristine and Lazare, 2013).  Diamond and Khemani (2005) define FMIS as a management instrument that delivers a extensive selection of both of those economic and non-economic facts. It consists of the computerisation of community expenditure administration processes which include budgets, monetary management of line ministries and other shelling out businesses.  

The developments of FMISs in the state started in the final ten years, the technological know-how of which was not readily available before that. The NCAER Immediate Gains Transfer Survey performed in 2018 found that States were employing two FMISs – one made by the Centre specifically the General public Monetary Administration Method (PFMS) and their very own State’s in-house FMIS. 

Modern-day PFM comprises a established of advanced processes, procedures and units which are intrinsically linked with just about every other by the architecture of the FMIS. These architectures are being developed by distinct States and the Centre independently in a period-wise fashion. For that reason, these FMISs are at different stages of maturity. The Centre is very well-positioned to contemplate handholding States in creating their FMISs and interlinking the Centre & Point out amount FMISs. Compared with Merchandise & Providers Tax Network (GSTN), this sort of interlinking need to intention to manage purposeful & data autonomy of Point out Governments which be certain their management about the developments in their own FMIS Systems, assure adequate checks & balances to promote fiscal sustainability and minimise ‘float’ in the Methods. Interlinked but independent Techniques would direct to sustained ability growth in States and motivate higher improvements in PFM by balanced competition on a single hand and advertise fiscal federalism on the other. It would decrease the dependence on Financial institution Accounts to control General public Funds. These systems could enhance every other and systematically bolster the trade of learning involving States and Centre.

Amongst the State-amount FMISs, West Bengal (WB) is a single of the a lot more superior ones. It is transferring in the direction of creating all capabilities of an best FMIS as defined in literature (Table 1). The Integrated Economic Administration Method (iFMS) is a website-dependent software for streamlining the monetary & fiscal management of the Point out Government. 

Resource: Authors’ conceptualisation from the literature.

Hashim and Piatti (2016), in their Entire world Bank functioning paper titled, “A Diagnostic Framework to Assess the Potential of a Government’s Fiscal Management Information System as a Finances Management Tool” mentioned that the efficiency of the FMIS as a funds resource will rely on it owning the subsequent five capabilities.

  1. Treasury Solitary Account: It is a software for consolidating and handling federal government resources. The iFMS has a world wide web-based Centralised Treasury Method. All Treasuries and their capabilities are built-in onto a unified architecture which includes Treasury capabilities like receipts, payments, pensions, stamps, PL Functions, Deposit Accounts, Provident Fund, Month-to-month Accounts, etc.  Likewise, the Lender Operations are linked into iFMS via Schematic Bank Account Administration Technique (SBMS) Module.
  2. FMIS coverage: All government transactions are coated by the iFMS (Table 1).
  3. On the net funds device: The Centralised Spending plan Monitoring Technique, a module in the iFMS has been produced for on-line submission of spending plan necessities by administrative departments and its processing at the Finance Office. Besides this, the module has scope for an online integration with the RBI for obtaining the Clearance Memo for resources acquired from the Federal government of India by the Price range Route. The module also has provision for online submission of a request for creation of plan head of accounts to Accountant Typical, West Bengal thus lessening the time needed for opening of any new subhead beneath any Head of Account. Even more, all Centrally Sponsored, Central and Condition Techniques can be monitored on-line and utilisation of resources tracked on a serious-time & true basis.
  4. Ancillary Attributes: It has all features of human source administration from appointment stage to pension phase of an employee’s lifecycle, presents support for a variety of auditing functions, accords administrative approvals and financial sanctions, back links schematic lender accounts, generates all varieties of part-based mostly MIS Stories, etc. The iFMS was also the initial FMIS in the nation to integrate with RBI’s e-Kuber Platform. It is also linked with the GSTN.  A unique platform iBudget exists for the planning of State Funds and funds allotments of respective Departments, which is integrated with the iFMS. Tools for handling set assets are getting prepared next in iFMS 2..
  5. Complex Aspects: The complete IFMS is hosted in the State’s Knowledge Centre (SDC) with its Catastrophe Recovery web-site at NDC. It operates its operations on a secure Multi-Protocol Label Switching network with West Bengal’s Point out Vast Space Network serving as backup. All the Treasuries are linked to the Central Server positioned at the SDC.  

In sum, there are alternate FMISs that exist at the State degree, which can be complementary to the PFMS.  Although the WB FMIS has the desirable properties & options and has proved its mettle for the duration of the pandemic, specific systematic, neutral, unbiased assessment can support States cross-learn from each and every other, improve monetary administration and evaluate their usefulness.


Bornali Bhandari is a Senior Fellow at NCAER and Pawan Kadyan is an IAS Officer belonging to the West Bengal cadre.

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