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Rule 86 - PFMS & DBT | KartavyaDesk

GFR 2017

Original Rule Text

level of implementation on PFMS to track fund flow and unspent balances. (3) All the payment, to the extent possible, shall be released ‘justin-time’ by the Ministries through PFMS. (4) Detailed Demand for Grants (DDG), as approved, must be uploaded on PFMS at the start of each Financial Year. (5) All the re-appropriation orders, surrender order shall be generated through PFMS system. (6) All grantee institutions shall submit Utilisation Certificates on PFMS. Direct Benefit Transfer. (1) Transfer of benefits should be done directly to beneficiaries under various Government Schemes and Programmes using Information and Communication Technology (ICT). Necessary process reengineering to minimise intermediary levels and to reduce delay in payments to intended beneficiaries with the objective of minimising pilferage and duplication should be done for all Government Schemes and Programmes. The process for implementation of DBT as prescribed should be adopted. (2) DBT should include in-kind and cash transfers to beneficiaries as well as transfers/honorariums given to various enablers of government schemes like community workers, etc. for successful implementation of the schemes. (3) Transfer of cash benefits from Ministries/Departments should be done (a) directly to beneficiaries from Ministries/Departments; (b) through State Treasury Account; or (c) through any Implementing Agency as appointed by Central / State Governments. (4) In-kind Transfer to Individual Beneficiary/ Household/Service provider includes schemes or components of schemes where in-kind benefits are given by the Government or through any Implementing Agency as appointed by Centre/State Governments to Individual Beneficiary/ Household/ Service

What This Means

Rule 86 of the General Financial Rules (GFR) 2017 focuses on using the Public Financial Management System (PFMS) for efficient fund management and implementing Direct Benefit Transfer (DBT). Essentially, it mandates that government departments use PFMS to track how funds are being spent and to ensure that payments are made only when needed ('just-in-time'). This helps in minimizing idle funds and improving transparency. The rule also emphasizes the importance of DBT, which means directly transferring benefits (cash or in-kind) to beneficiaries through electronic means, cutting out intermediaries and reducing the risk of corruption or delays. This applies to all government schemes and programs where benefits are provided to individuals or organizations.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Mandatory use of PFMS for tracking fund flow and unspent balances.
  • •Payments should be released 'just-in-time' through PFMS.
  • •Detailed Demand for Grants (DDG) must be uploaded on PFMS at the start of each financial year.
  • •Emphasis on Direct Benefit Transfer (DBT) to beneficiaries using ICT.
  • •DBT includes both cash and in-kind transfers, as well as payments to scheme enablers.

Practical Example

The Ministry of Rural Development is implementing a housing scheme for economically weaker sections. Under Rule 86, the ministry must upload the approved Detailed Demand for Grants (DDG) of ₹500 crore for the scheme onto PFMS at the beginning of the financial year. When a beneficiary, Ms. Lakshmi, is approved for a house, the ₹1 lakh subsidy is directly transferred to her bank account through DBT using PFMS. The ministry also uses PFMS to track the utilization of funds by the implementing agency at the district level, ensuring that payments are released only when construction milestones are achieved, preventing unnecessary accumulation of funds.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What is PFMS and why is it important under Rule 86?▼
PFMS (Public Financial Management System) is a platform used to track fund flow and expenditure. Rule 86 mandates its use to ensure transparency, accountability, and efficient fund management in government schemes.
What does 'just-in-time' payment mean in the context of Rule 86?▼
'Just-in-time' payment means releasing funds only when they are actually needed for expenditure, minimizing the time funds remain idle and reducing the potential for misuse.
What types of benefits are covered under DBT as per Rule 86?▼
DBT covers both cash transfers (e.g., subsidies, pensions) and in-kind transfers (e.g., distribution of goods, services), as well as payments to individuals enabling government schemes (e.g., community health workers).
Who is responsible for ensuring compliance with Rule 86?▼
All Ministries and Departments of the Government of India are responsible for ensuring compliance with Rule 86, including uploading DDGs, using PFMS for payments, and implementing DBT wherever applicable.
What are the benefits of DBT as per Rule 86?▼
DBT reduces intermediary levels, minimizes delays in payments, reduces pilferage, and eliminates duplication, leading to more efficient and transparent delivery of benefits to intended beneficiaries.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Test Your Knowledge

Question 1 of 3

According to Rule 86 of GFR 2017, what is the primary purpose of utilizing the Public Financial Management System (PFMS)?

Related Rules

Rule 271General Financial Rules 2017 (amended July 2024) - Rule 271 - Chapter 10Rule 109General Financial Rules 2017 (amended July 2024) - Rule 109Rule 146General Financial Rules 2017 (amended July 2024) - Rule 146 - Chapter 6Rule 169General Financial Rules 2017 (amended July 2024) - Rule 169 - Chapter 6Rule 215General Financial Rules 2017 (amended July 2024) - Rule 215 - Chapter 6

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