Written by Talent KAS

Related Topics: Government Schemes & Initiatives, Transparency in Governance


  • Under pressure from the Centre, the Punjab Food and Civil Supplies Department has directed all government procurement agencies to link the bank accounts of farmers with the Public Finance Management System (PFMS) portal before the procurement of paddy begins.
  • This has angered the arhatiyas (commission agents), a large number of whom want the government to roll back its decision.

What is the PFMS portal?

  • It is an online platform developed and implemented by the office of the Controller General of Accounts (CGA) under the Union Ministry of Finance.
  • It is end-to- end solution for processing payments, tracking, monitoring, accounting, reconciliation and reporting.
  • The PFMS portal is used to make direct payments to beneficiaries of government schemes.
  • It provides various stakeholders with a real time, reliable and meaningful Management Information System and an effective Decision Support System (DSS), as part of the Digital India initiative of GoI.
  • It provides platform for efficient management of funds through tracking of funds and real time reporting of expenditure and receipts through Treasury and Bank Interface.
  • The line ministries/ departments utilize this platform to monitor the utilization of funds provided to the implementing agencies and states governments.
  • It is also used for Direct Benefit Transfer (DBT) payments under MGNREGA and other notified schemes of the Government of India.


  • With the use of PFMS, there will not be much paper work and it would go a long way in monitoring and tracking of any unnecessary parking of funds by the implementing agencies
  • It will minimize the cases of delay and pending payments to a large extent.
  • Implementation of Schemes through PFMS has brought transparency in system and helped in easy transfer and tracking of funds.
  • PFMS has enabled the Government in taking forward the ground breaking initiative of Direct Benefit Transfers (DBT) with collateral benefits of plugging leakages and eliminating ghost beneficiaries.

Why arhatiyas are protesting against it?

  • The Food and Civil Supplies Department has announced that if accounts are not linked with the PFMS portal, the arhatiyas’ commission, which is 2.5%, and the administrative charges, would not be released.
  • While government agencies have asked the arhatiyas to provide the account details of farmers, the arhatiyas have claimed that the farmers are not willing to share the details.
  • They also fear that the linking of farmers’ accounts to the PFMS database is only one step short of the government deciding to make payments directly to farmers, cutting the agents out all together.

Practice Question for Mains

“Implementation of Schemes through Public Finance Management System (PFMS) has brought transparency in system and helped in easy transfer and tracking of funds. Discuss”

[Source: Indian Express, Times of India]


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