Govt to leverage Digital India databases for improved data collection, processing, says Sitharaman

Finance Minister Nirmala Sitharaman during 49th Civil Accounts Day celebrations in New Delhi on Saturday. (Courtesy: PTI photo)

Highlighting the government's push to strengthen data governance by leveraging sectoral databases established under the Digital India Mission with advanced technology tools, Finance Minister Nirmala Sitharaman on March 1 underscored the potential role of the Controller General of Accounts (CGA) in this initiative, given the vast data sets managed by the Public Financial Management System (PFMS).

"In the July 2024 Budget, I had suggested that for improving data governance, collection, processing and management of data and statistics, different sectoral databases, including those established under the Digital India mission, will be utilised with active use of technology tools.
CGA has the potential to work in this regard, given that PFMS has a huge dataset," Sitharaman said at the 49th Civil Accounts Day celebrations in New Delhi.

The move signals a broader effort to enhance the collection, processing, and management of statistics for improved fiscal transparency and governance.

Sitharaman also stressed the need to simplify annual accounts to make them more accessible to citizens.

"Would like the Department of Expenditure to examine, in consultation with CGA, ways to make annual accounts more approachable, user-friendly, and allow citizens to analyse them with simpler reports," she said.

PFMS Savings

The Finance Minister highlighted how PFMS has played a key role in financial tracking and fund management, helping optimise government expenditure. She noted the savings generated through reforms in fund disbursal and treasury management. The Treasury Single Account (TSA) in public autonomous bodies has saved Rs 15,000 crore in interest costs since 2017-18. The Single Nodal Agency (SNA) system, ensuring just-in-time fund release to states, has saved Rs 11,000 crore since 2021-22. PFMS enables unified payments across 31 state treasuries and 40 lakh programme implementing agencies, supporting cooperative federalism, she said.

"The taxpayers' money needs to be spent judiciously. Accounting has seen a remarkable change, as much as efficiently managing inflation and welfare schemes. Efficient tracking of funds helps reduce advance borrowing," Sitharaman said.

She further pointed out that PFMS facilitates direct benefit transfers (DBT) for 1,200 central and state schemes, benefiting 60 crore citizens. Of these, 1,100 schemes are DBT-enabled, ensuring transparent and efficient fund delivery.

"Being transparent in managing the government’s funds can never be overstated," she added.

PFMS 2.0: The Next Phase

Outlining the government's plans to further enhance PFMS, Expenditure Secretary Manoj Govil confirmed that PFMS 2.0 is in the works to improve its efficiency.

Timely payments remain a cornerstone of government processes, with the Expenditure Secretary stressing that effective monitoring of the payment system optimises cash flows and maintains accountability.

"PFMS ensures there is no undue pendency at any level. The automation of annual accounts is ongoing to ensure financial information is promptly available for policymaking. We are also discussing with the Comptroller and Auditor General (CAG) issues related to the harmonisation of union and state accounting codes and practices. There is a need to harmonise accounts of rural and urban local bodies, and the Finance Commission is also looking into this aspect," Govil said at the event.

"State and central accounts are not fully matched yet. PFMS has helped in reducing idle parking of funds. A lot of money that was otherwise parked in banks is now with the RBI in the Centre’s own account." Govil said.