India’s government is in the process of universalizing its Public Financial Management System. The goal of a universal system is an efficient digital system to replace its manual one. This large-scale information system will be run by India’s Department of Expenditure instead of individual states.
The individual states and union territories are hesitant to accept this transition because they view the change as a loss of control and independence. They do not feel that the Department of Expenditure has the right to interfere with the workings of state governments.
Overall, I can understand the states and union territories’ trepidation with the roll-out of a universal financial information system. Joining a larger system increases oversight and scrutiny which may imply that the government doesn’t trust its states. However, I think that the states should embrace this system because it will increase efficiency and transparency.
With India’s twenty-nine states, seven union territories, and over 1.2 billion people, there are vast amounts of financial information to track and manage. State treasury departments must communicate with both Parliament and local ministries. A single, uniform system will allow transaction details to be more accessible and understandable. The increased accessibility can help fraud detection as well.