Q1. Public Financial Management System (PFMS) is primarily an initiative of which of the following?
(a) Ministry of Finance
(b) Ministry of Electronics and Information Technology
(c) Comptroller and Auditor General of India
(d) Reserve Bank of India
Answer: (a)
Explanation: PFMS is a web‑based online software application developed and implemented by the Controller General of Accounts (CGA), Department of Expenditure, Ministry of Finance, Government of India.
Q2. PFMS was launched in which year to track funds released under various Government schemes?
(a) 2009
(b) 2012
(c) 2015
(d) 2018
Answer: (b)
Explanation: PFMS was formally launched in 2012 as a flagship initiative to provide a real‑time picture of fund flow and utilization under Central Government schemes.
Q3. Which of the following is NOT a core function of PFMS?
(a) Fund tracking and reconciliation
(b) Direct Benefit Transfer (DBT) processing
(c) Issuance of currency notes
(d) Accounting and reporting of expenditures
Answer: (c)
Explanation: PFMS handles fund tracking, DBT, accounting, and reporting; issuance of currency notes is the function of the Reserve Bank of India.
Q4. PFMS integrates data from which of the following sources for monitoring scheme expenditures?
(a) Only Central Ministries
(b) Central Ministries, State Governments, and Implementing Agencies
(c) Only Commercial Banks
(d) Only RBI
Answer: (b)
Explanation: PFMS captures transaction data from Central Ministries, State Governments, Union Territories, and various implementing agencies (NGOs, societies, etc.).
Q5. The primary objective of linking PFMS with the Direct Benefit Transfer (DBT) platform is to:
(a) Increase tax collection
(b) Ensure subsidies and benefits reach the intended beneficiaries directly into their bank accounts
(c) Replace the GSTN system
(d) Audit the RBI’s monetary policy
Answer: (b)
Explanation: PFMS‑DBT linkage enables real‑time validation of beneficiary details and direct credit of benefits, reducing leakages and duplication.
Q6. Which authority is responsible for the overall supervision and governance of PFMS at the national level?
(a) Finance Commission
(b) Controller General of Accounts (CGA)
(c) Securities and Exchange Board of India (SEBI)
(d) National Informatics Centre (NIC)
Answer: (b)
Explanation: The CGA, under the Department of Expenditure, Ministry of Finance, oversees the design, implementation, and monitoring of PFMS.
Q7. PFMS provides which of the following reports to scheme managers?
(a) Only cash flow statements
(b) Utilization Certificates, expenditure reports, and fund flow statements
(c) Stock market indices
(d) Weather forecasts
Answer: (b)
Explanation: PFMS generates utilization certificates, scheme-wise expenditure reports, and real‑time fund flow statements for monitoring purposes.
Q8. Which of the following statements about PFMS is correct?
(a) PFMS operates only in offline mode.
(b) PFMS is used exclusively for defense expenditures.
(c) PFMS enables real‑time tracking of funds from release to utilization.
(d) PFMS replaces the need for the Comptroller and Auditor General (CAG).
Answer: (c)
Explanation: PFMS is an online system that tracks fund flow in real time from the moment of sanction to final expenditure.
Q9. In PFMS, the term “Agency Code” refers to:
(a) The code assigned to each commercial bank
(b) A unique identifier given to each implementing agency (e.g., society, NGO, state department)
(c) The RBI’s internal audit code
(d) The GSTIN of a taxpayer
Answer: (b)
Explanation: Each implementing agency receiving funds through PFMS is allotted a unique Agency Code for identification and transaction tracking.
Q10. Which of the following is a key benefit of PFMS for the Government?
(a) Increased cash handling at treasuries
(b) Reduction in delays and leakages in fund flow
(c) Mandatory use of paper vouchers
(d) Elimination of all audits
Answer: (b)
Explanation: By digitizing fund flow and providing real‑time visibility, PFMS helps minimize delays, procedural bottlenecks, and financial leakages.
Q11. PFMS supports which of the following payment modes?
(a) Only cash payments
(b) Only cheque payments
(c) Electronic fund transfers (NEFT/RTGS/IMPS) and Aadhaar Payment Bridge System (APBS)
(d) Barter system
Answer: (c)
Explanation: PFMS enables electronic transfers via NEFT/RTGS/IMPS and also routes DBT payments through the Aadhaar Payment Bridge System.
Q12. The “Public Financial Management System” portal is hosted by which organization?
(a) National Informatics Centre (NIC)
(b) Unique Identification Authority of India (UIDAI)
(c) Reserve Bank of India (RBI)
(d) Securities and Exchange Board of India (SEBI)
Answer: (a)
Explanation: The technical hosting, maintenance, and support of the PFMS portal are provided by the National Informatics Centre (NIC).
Q13. Which of the following schemes was among the first to be integrated with PFMS for fund tracking?
(a) Pradhan Mantri Jan Dhan Yojana
(b) Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
(c) Make in India
(d) Startup India
Answer: (b)
Explanation: MGNREGA was one of the earliest major schemes brought under PFMS to monitor wage payments and material fund flow.
Q14. PFMS helps in preparing which of the following documents required under the General Financial Rules (GFR)?
(a) Annual Confidential Reports
(b) Utilization Certificates (UCs) and Statement of Expenditure
(c) Income Tax Returns
(d) Shareholding patterns
Answer: (b)
Explanation: PFMS automates the generation of Utilization Certificates and Statements of Expenditure, which are mandatory under GFR for grantee agencies.
Q15. The “Zero Balance Account” (ZBA) concept in PFMS is primarily used to:
(a) Keep idle cash in government accounts
(b) Sweep excess funds automatically to a central pool account, minimizing idle balances
(c) Replace all bank accounts with cash drawers
(d) Increase interest earnings on government deposits
Answer: (b)
Explanation: ZBAs in PFMS ensure that funds are transferred only when needed for payment, sweeping any surplus back to a central account, thus reducing idle balances.
Q16. Which of the following is TRUE regarding PFMS and GST?
(a) PFMS is used to file GST returns.
(b) PFMS tracks the flow of GST compensation cess funds released to states.
(c) PFMS replaces the GSTN portal.
(d) PFMS collects GST from taxpayers.
Answer: (b)
Explanation: PFMS monitors the release and utilization of GST compensation cess amounts transferred from the Centre to states, ensuring timely disbursement.
Q17. In PFMS, the “Expenditure Advance” module is used for:
(a) Granting loans to private businesses
(b) Advancing funds to implementing agencies for anticipated expenditures, which are later adjusted against actual bills
(c) Paying salaries of PFMS employees
(d) Investing in mutual funds
Answer: (b)
Explanation: The Expenditure Advance feature allows agencies to receive funds in advance based on estimates, with subsequent adjustment upon submission of actual expenditure documents.
Q18. Which committee recommended the implementation of a comprehensive PFMS-like system for better financial management?
(a) Kelkar Committee
(b) Vijay Kelkar Committee on Tax Reform
(c) Committee on Public Undertakings
(d) Committee on Financial Sector Reforms
Answer: (a)
Explanation: The Kelkar Committee (2002) recommended strengthening public financial management, which later paved the way for PFMS development.
Q19. PFMS data can be accessed by which of the following users?
(a) Only the Finance Minister
(b) Authorized users from Central Ministries, State Governments, implementing agencies, and banks (based on roles)
(c) General public without authentication
(d) Only the Comptroller and Auditor General
Answer: (b)
Explanation: PFMS follows a role‑based access control system, permitting various stakeholders to view relevant data according to their authorization levels.
Q20. Which of the following statements about PFMS is FALSE?
(a) PFMS supports multi‑currency transactions.
(b) PFMS provides real‑time fund flow information.
(c) PFMS aids in reducing procedural delays.
(d) PFMS integrates with the RBI’s Core Banking Solution (CBS) for fund transfers.
Answer: (a)
Explanation: PFMS deals exclusively with Indian Rupee (INR) transactions; it does not support multi‑currency operations.
Q21. The “Scheme Master” in PFMS contains:
(a) List of all commercial banks operating in India
(b) Details of all government schemes, including sanction orders, budget allocations, and implementing agencies
(c) Stock market listings
(d) Details of foreign diplomatic missions
Answer: (b)
Explanation: Scheme Master is a central repository in PFMS that stores scheme‑wise information such as financial sanctions, budget heads, and agency mappings.
Q22. PFMS helps in achieving which objective of the Digital India initiative?
(a) Promoting cash‑based economy
(b) Ensuring transparency and accountability in government financial transactions
(c) Expanding coal mining operations
(d) Reducing the use of Aadhaar
Answer: (b)
Explanation: By digitizing fund flow and enabling real‑time monitoring, PFMS supports Digital India’s goal of transparent, efficient, and accountable governance.
Q23. Which of the following is a key output of PFMS used for audit purposes?
(a) Bank passbooks of individual citizens
(b) Scheme-wise expenditure reports and Utilization Certificates
(c) Meteorological data
(d) Traffic violation records
Answer: (b)
Explanation: Auditors rely on PFMS-generated expenditure reports and Utilization Certificates to verify proper use of government funds.
Q24. PFMS reduces the need for which of the following traditional processes?
(a) Online shopping
(b) Manual preparation of fund release letters and paper-based tracking
(c) Satellite communication
(d) Solar power generation
Answer: (b)
Explanation: By automating sanction, release, and tracking processes, PFMS eliminates much of the manual paperwork and delays associated with traditional fund management.
Q25. The “Budget Availability Check” in PFMS ensures that:
(a) No expenditure exceeds the allocated budget head
(b) All employees receive overtime pay
(c) Foreign exchange reserves are maintained
(d) Stock market prices are stable
Answer: (b) is incorrect; correct answer is (a)
Explanation: Before any payment is processed, PFMS verifies that sufficient budget balance exists under the relevant expenditure head, preventing overspending.
