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Informist, Saturday, Mar. 1, 2025

 

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--Sitharaman: 'Just-in-time' system of accounting bringing dn govt borrowing
--CONTEXT: Finance Minister Nirmala Sitharaman speaks at ministry event 
--Sitharaman: Controller General of Accounts must engage more with states 
--Sitharaman: Urge departments to make public accounts more user friendly 
--Expenditure Secy Govil:Looking to upgrade public fund mgmt system
--CONTEXT: Expenditure Secy Govil speaks at finance ministry event

 

NEW DELHI - The 'just-in-time' system of accounting introduced through the public fund management system has allowed the government to bring down its borrowing targets, Finance Minister Nirmala Sitharaman said. The efficient use of public funds through digitalisation over the last decade has also allowed both the Centre and states to expand their social sector schemes, she said. 

 

In interest expense alone, the single nodal account system introduced in 2021-22 (Apr-Mar) helped save around INR 110 billion in total, the finance minister said at the 49th Civil Accounts Day. The treasury single account system has saved public bodies over INR 150 billion since FY18. These savings have allowed resources to be allocated to other sections of the economy, Sitharaman said.

 

"Just-in-time fund release has helped us to make sure we don't borrow much more than what we need," Sitharaman said. "...I don't need to borrow, and keep borrowing, just to keep them parked somewhere. That's the advantage the (PFMS) public fund management system has given us."

 

The government has set a net market borrowing target of INR 11.54 trillion for FY26, a tad lower than FY25's revised estimate. While it shot up in the years following the COVID-19 pandemic, the net market borrowing declined since FY24 due to the government's fiscal consolidation. Its net short-term borrowings through Treasury bills have also come down, and the revised estimate for FY25 is (-)INR 1.2 trillion.

 

The system has also expanded and allowed for seamless direct benefit transfers around the country, Sitharaman said. The number of transactions through the public fund management system have shot up over hundredfold in the past decade to 2.65 billion in 2024, she said. Around 1,100 of the government's 1,200 centrally sponsored schemes now operate direct benefit transfers through the system. In addition,  Controller General of Accounts Shyam S. Dubey said that the over INR 40 trillion worth of funds being transferred through the system comes at a cost of less than INR 2 billion a year.

 

Sitharaman told the controller general that he should reach out to states and get them to conduct their welfare schemes through the public fund management system that the department operated. The smoothly functioning public fund management system was as big a success as the unified payments interface in India, and the department share its success and experience with other nations as well who could use the technology in order to improve their own systems, the finance minister said.

 

"The compliance with the IMF's (International Monetary Fund's) special data dissemination data standards has quietly brought in greater international credibility on financial reporting," Sitharaman said. "CGA (Controller general of accounts) should handhold states in seamless onboarding and transition...to the SNA-SPARSH and convince them about the benefits of this reform and quick adaptation."

 

The controller general, along with the Comptroller and Auditor General of Accounts, should also make the national accounts more approachable and user friendly for end-users and taxpayers, and the dataset under the public fund management system can be used for reseach. In addition, Sitharaman asked that the civil accounts service to engage more with public institutions such as universities for greater public awareness of its role.  End

 

Reported by Aaryan Khanna

Edited by Akul Nishant Akhoury

 

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