The Ministry of Finance has undertaken a comprehensive reform of the fund release process for Centrally Sponsored Schemes (CSS) through their Office Memorandum No. 1(13) PFMS/FCD/2020 dated 23rd March 2021. As a result of this reform, significant modifications have been made to various modules within the Public Financial Management System (PFMS), including those related to Agency Registration and Expenditure Advance Transfer (EAT) Direct Benefit Transfer (DBT).

One of the key aspects of this implementation has been collaborating closely with State Governments to facilitate the creation of State Linked Schemes (SLS) corresponding to Centrally Sponsored Schemes, designating Single Nodal Agencies for each scheme and opening of Single Nodal Accounts.

Four models were developed for implementation as:

• Model 1 - External system (REAT/DBT Integration) for payments
• Model 2 - External system integration but payment via PFMS
• Model 3 -PFMS Portal (User Interface)
• Model 4 - Using State IFMIS

The Ministry of Finance, Department of Expenditure, introduced a revised fund flow procedure for Central Sector Schemes through Office Memorandum (OM) No. 1(18) PFMS/FCD/2021 dated 9th March 2022. This OM outlines two on boarding models for the updated procedure:

The funds allocated for Centrally Sponsored Schemes (CSS) follow a route through the State Consolidated Fund before being distributed to the relevant agencies responsible for implementing the CSS.

In SNA Model, there is a requirement for State Treasuries to share comprehensive details with PFMS regarding the funds that have been devolved to these implementing agencies. This sharing of information includes explicit breakdowns of both the State's and the Centre's respective contributions.

The existing interface module between PFMS and State treasuries has undergone modifications in order to accommodate this new requirement effectively. This modification allows the IT systems used by State treasuries to transmit data related to agencies receiving CSS funds to PFMS on a daily basis.

Rollout Vertical acts as a liaison between State Treasuries and PFMS technical teams for ensuring effective communication and cooperation.

The amount of Gross Budgetary Support (GBS) of all Schemes of all the Ministries is entered in PFMS at the beginning of F.Y to ensure that the system accurately reflects the budgetary allocations for all Schemes across Ministries, as well as accommodate any adjustments required due to the inclusion of new Schemes during the course of fiscal year.

Roll out vertical facilitates the integration of various external systems of Central Ministries/ State Governments/ Banks with PFMS.